Residential Sales Dominate The Real Estate Market

Per the pie chart below, note the difference in residential sales as compared to land and commercial.  Residential sales in La Plata county account for 82.1% of all transactions, up from 71.1% in 2005.  The trend that is even more amazing is in 1994, the residential percentage of market was 43% and land sales were 53.8%!  This is a huge change of market, reflecting differences in consumer behavior.

Land sales have been depressed by the great recession, and dropped to a low of 13.2% of overall sales, and at current level of about 15%.   Again, this is from the highs in the market in 1994 of 53.8%.  Currently, we are experiencing growth in land sales as there is higher demand for new housing, spurred by low inventory levels of homes on the market.

Commercial transaction have dropped to 3% of sales in 2013, from 3.7% in 2005, but it has stayed consistent with 1994, when 3% of the market was commercial.  Commerial sales will increase with population growth, economic vitality, and the need for new and additional services.

Bob Allen of Allen and Associates is a highly respected real estate consultant and appraiser in the Durango area, and he has studied the real estate market in La Plata County for decades, and has provided the 1990's data for this article.  The pie chart data is from CREN, the regional MLS provider in our area.

According to Bob, his perspective is: “In the 90’s, many folks came here to live this lifestyle, were willing to sacrifice much to live this lifestyle, and they were idealistic.  They wanted to build their idea of a dream home on dream property. Today, many folks come here to live this lifestyle but they want to do it NOW rather than wasting time buying land, designing a home, building a home, etc. – they don’t have that much time – they’ve spent the last 30-40 years of their life in urban America and now realize that may not have been the right choice so they don’t want to waste any more time with superfluous dream stuff. These folks are willing to buy homes that may not fit them perfectly.  They’ll remodel but they want to start to play NOW!  They don’t have much time left.”

Durango Diner Receives National Attention

We came across this article recently and posted it on our Twitter account, but thought it worthwhile to note in our blog this week. Every Day with Rachel Ray magazine featured the Durango Diner as one of the top 51 breakfast spots in the United States. We love celebrating Durango, and the nuances within our town.

The Durango Diner is one of those places that most of us have visited. In fact, we all probably have memories with our families or friends at the Diner. It’s on the same block of Main Street as the Wells Group, the perfect location for breakfast.

For my family (Don), I will never forget taking my oldest daughter, Kelly, out to breakfast when she was about 8 years old. The menu had “hot cakes” and she asked me if she could order them for breakfast. She was so excited that I said yes—until they came on the plate. As she looked at the plate of pancakes, her face was disappointed. It was then that she explained she thought she ordered hot chocolate cake for breakfast. That joke has stayed in our family for the last twenty years.

The food at the Diner is delicious, and the experience classic.

We are happy to see the Diner receive this national attention. I am looking forward to taking my family out for hot cakes when they visit town next.

Check out the article:  http://bit.ly/1drB88H

Real Estate And The Millennial Generation

We have had the opportunity to work with many of the Millenials in the last few years, typically finding them their first home.  In the Durango Area, they want in-town homes with close proximity for walking and riding their bikes to the amenities that we have in town.  The size of the home is not as important as the location, and the ability to experience life.  They tend to want a greater degree of cultural and ethnic diversity.

One of the things we have found noteworthy concerning the Millenial generation is the size of it.  There are nearly 83 million Millenials, which is greater than the number of baby boomers, which is now 77 million, and at the peak it was a population of 80 million.  The Millennial generation has received a lot of attention in the past handful of years. From the workforce to marketing strategies, much may be said about this generation. Typically, the term refers to those born between 1977 and 1995. This “Gen Y” generation ranges between ages 19 and 37.

In order to understand the context in real estate, we must first understand the characteristics typical of the Millennials. As a broad generalization, the Millennials view work and life differently than previous generations. They seek an overarching purpose in their lives, and will typically work for different companies throughout their careers as opposed to working for one company for 30 years.

Additionally, Millennials focus on a work/life balance. They are also dependent on technology. This combination creates an ability to work from any location. With internet and cell phone capabilities, Millennials must be responsive at all times. This creates both autonomy and connection to employers.

So how do these characteristics of Millennials impact real estate? The influx of Millennial buyers creates a need for sellers to market and stage homes with this demographic in mind.

According to a study conducted for Better Homes and Gardens Real Estate, the Millennials focus on technology in homes, as is demonstrated by the tendency to want custom homes and home theaters, as well as security systems. Millennials seek homes compatible with the ability to work from home, and find great value in home offices.

The Millennials prioritize socialization. As such, the location of homes remains very key for them. They tend to want to be near the experiences they enjoy, and want their homes to reflect the emphasis they place on their social lives. They like the ability to walk to necessities and entertainment—not the need to drive into the suburbs to retreat. Even if a home’s location is further from the center of a city, noting walkable features in the area can assist in appealing to this generation.

Millennials also seek custom homes. Instead of the “cookie cutter” models sought by previous generations, this generation wants unique homes. This may be found by incorporating hardwood floors, or adding one bold painted wall in a room. They also seek homes that are energy efficient and green.  These modifications are oftentimes inexpensive and create substantial impact.

These concepts apply to sellers, as many Baby Boomers will be selling their homes to a younger generation. While changing a home’s characteristics completely will be impossible, small enhancements could be considered. As the market shifts and the Millennials maintain a larger presence seeking home ownership, we will be strategic to consider their tendencies as we market homes and assist them in purchasing their dream homes.

Please refer to the below links as sources for further information:

http://www.forbes.com/sites/nextavenue/2013/05/01/how-boomer-home-sellers-can-hook-millennials/3/

http://realestate.msn.com/article.aspx?cp-documentid=13107891

http://finance.yahoo.com/news/the-next-real-estate-boom--get-ready-for-housing--gen-y-style-141521310.html

http://www.newgeography.com/content/003685-millennial-lifestyles-will-remake-american-homes

http://jasondorsey.com/millennials/the-top-gen-y-questions-answered/

The Perfect Day

In other parts of the country, people have described the “perfect day” as the ability to ski and surf in the same day. So how does the “perfect day” look in Durango?

Arguably, this is the time of the year that leads to the perfect Durango day. As the temperatures start to warm up, we see a phenomenal contrast between in-town Durango and the higher mountains. In our opinion, the perfect day combines a snow activity with a “warm weather” activity.

Whether downhill skiing, cross-country skiing or snowshoeing, this time of the year is perfect. The snow is great in the mountains and the days are nice in town.

In town, the mid-fifties temperatures allow games of golf or tennis, or an outdoor bike ride.

Our friend Ken Bates has recently taken advantage of these Durango perfect days. He goes to Durango Mountain Resort in the morning, skis until around 2:30, and then comes into town to play tennis. In his words, it’s a great workout day.

Also, Hillcrest Golf Course opened early. For those who look forward to Durango summers, this symbolizes the start of summer. Another friend, Andrew Crowell, already took advantage of golfing. He says it’s the first time he can remember playing golf in February in Durango.

I even played tennis this past weekend. It’s always a great feeling to be back on the court after the winter.

Without a doubt, this time of the year offers the perfect day in this area. Whether you like to ski or snowshoe, golf or play tennis, bike or hike, we hope you are enjoying the fact that these are all accessible mid-February in Durango. As Ken Bates said, we are blessed to live in this place with these opportunities.  

 ~ Don

Smaller Homes with Upgraded Interiors Trending U.S.

A recent Wall Street Journal article discusses a current real estate trend—homeowners seeking high-end, but not necessarily large, homes. 

Many real estate markets throughout the country see homeowners who desire homes with nicer amenities, but remain moderate in size. These up-scale homes oftentimes include elaborate appliances and upgrades.

Some of these homeowners even invest a substantial amount into landscaping, as they note how much time they spend outside. They prefer to enjoy the home and where they spend their time, as opposed to follow the mindset that more space equals a greater home.  These homes are more focused on the livable space, and utilizing all of the space in the home. Sometimes large homes contain substantial amounts of unused space.

Energy-efficient homes also rank amongst many homeowners as an important trait, and as noted in the Durango Herald in the last week, many homeowners are adding solar.  In Skyridge, a couple of the homes have combined solar with geo-thermal.  In Three Springs and Edgemont Highlands, most of the homes being built have high energy efficiency. 

We believe the recession served as a reminder for many consumers that bigger is not always better. Rather, cutting back in size more adequately meets the needs of these consumers. The Baby Boomer generation tends to comprise the majority of these buyers, as they are typically at the point where they are ready to downsize (children have moved out, and they are also are considering retirement).  Many of them are starting to realize they do not need the larger homes.  

In the Durango area we see this trend, as well. We also have a few neighborhoods that cater to these concepts. In town, La Questa and the Skyridge view lots contain beautiful homes that are not designed primarily for size. In La Questa, the developer has changed the minimum square footage to  2,500 sq. ft. for a new home, from the original plan of 3,000 sq. ft. to adjust to this new trend. The Edgemont Highlands area also promotes this lifestyle, as does Durango Mountain Resort and the Glacier Club.  

It is an exciting time in our area to consider this type of transition. With the offering of inventory and the variety in locations available, buyers may feel confident they are purchasing space they need, and also enjoy the finer features within these homes.  

Here is the Wall Street Journal Real Estate article:

http://online.wsj.com/news/article_email/SB10001424052702303973704579353263994062996-lMyQjAxMTA0MDAwNzEwNDcyWj

Silverton Skijoring Sure To Be a Spectacular Time

Looking for an interesting way to spend President’s Day Weekend? Visit the fifth Annual Silverton Skijoring event—a growing spectator sport in Southwest Colorado. 

Skijoring, which means “ski driving,” is an adventurous sport where a horse pulls a skier while the skier navigates an obstacle course of ramps and rings to gather. These winners are determined based on speed and points gathered through the obstacle course. The sport started in Scandinavia, and was featured in the 1928 Olympics. In the United States, Whitefish, Montana has hosted the World Skijoring Championships since 2009. Leadville hosts a competition based more on speed, and it has been a featured event in Silverton since 2010.

Silverton’s Blair Street hosts the races, and riders compete for cash prizes. The combination of the horse’s speed, rider’s agility, and technique needed to complete the obstacles will make this event one entertaining weekend. Last year over 1,000 spectators visited Silverton for the event.

The contest begins February 15 around 11-11:30 am, and registration begins at 8:30. Prize money will be approximately $5,000. They expect more participants than ever this year. Check www.skijoringsilverton.com  for more information.