The Trend Of Rising Median Prices

Check out the recent article in CNN Money at the link below that emphasizes soaring home sales and prices in the Denver and Dallas markets.  This is interesting for our La Plata County market because historically we have lagged one to two years behind market "happenings" in those larger markets.  For La Plata county sellers, this upward trend in the larger markets is good news as it forecasts that median prices will be rising here as well.  For the six month period ending July 31, 2013, the median price in La Plata county was $315,000.00.  In 2006, the high point of the market, the median price in La Plata county was $340,000.00.  We are still 7.4% below that high in 2006, but statistics and the trends in larger markets indicate that our prices here will continue to inch back up. 

There are, of course, trends that might counter a fast return to the market highs of 2006.  The record low mortgage rates have risen this year crimping the purchasing power of potential home buyers.  And, some experts are saying that the rapid price gains in some markets cannot be sustained and might even be unhealthy for the market, raising the risk of a new housing bubble.  But we tend to agree with the experts that say that prices have room for further increases and that affordability remains near historic highs.  Further, the increase in home prices might encourage lenders to ease lending standards since the underlying loans should appreciate in value.   http://money.cnn.com/2013/07/30/news/economy/home-prices/index.html?hpt=hp_t2

We hope you have a great weekend planned as we go into this last month of summer.  Take care and, as always, please call any of us on the Ricedorff Team with your questions or concerns.

The Latest Area Real Estate Statistics

Today the Colorado Association of Realtors released the 2nd Quarter statistics for the Durango Area.  As you can see by the chart below, the Durango Area Real Estate market is very healthy.

The Durango Area Association of Realtors also released their statistics for the first half of 2013.  Those are included below.

Is Now Still The Time To Buy Durango Real Estate?

An improving real estate market is now old news!  Durango, Colorado real estate has seen steady improvement in sales since 2009, and the prices of homes have started a very modest increase since the third quarter of 2012.  In some areas of the County, we have very tight inventories, especially in the lower and mid-price ranges, and those in close proximity to Durango.  These segments of the market are experiencing a sellers market; or, depending on inventory levels, a balanced market.  The National Association of Realtors describes a sellers market has an inventory level below five months, a balanced market is a five to seven month inventory, and a buyers market is described as more than seven months of inventory.  In our upper price ranges there is significant inventory, and thus a buyers market.  As inventories of homes on the market continues to reduce, it will continue to push prices upward.  It is very important to look at each segment of the market to predict the potential for changes in prices, based on the effects of supply (homes on the market) versus the demand (number of homes selling).

The big news in the last 45 days was the rates on mortgages, as they have increased about 1% in that time period.  Higher mortgage rates lower the affordability of homes, and limit the number of buyers that may qualify.  Should savvy home buyers wait for interest rates to go back down?  Maybe, but it is a risky proposition.  It appears the rates will stabilize for awhile in this range, but as the economy improves, both Doug Duncan, Chief Economist for Fannie Mae, and Frank Nothaft, chief economist for Freddie Mac have suggested the rates will continue upward movement, perhaps to 6.5%-7%.  If these rate hikes happen in the future, a home buyer would benefit from purchasing sooner rather than later.  The combination of the median price increasing and a tighter inventory of homes on the market further supports this decision

The Latest Market Statistics

Hello, Friends.

The Wells Group recently compiled the statistics for La Plata County residential sales.  Below are the results...which as you can see, are very positive.

Wishing You A Safe & Happy 4th!

Tomorrow is Independence Day, a day to celebrate our nation's freedoms.   It is also a day that showcases the finest aspects of the communities that we call home.

From the parade in downtown Bayfield, to the street dance and fireworks in Durango - and all activities in between - the 4th of July brings our communities together.  If you're in the area, take this opportunity to get out and join in the celebration with your neighbors, friends, and families.

Below are complete lists of the activities that are available.  We wish you a very safe and happy 4th of July.

The Pulse Of The Real Estate Market

Friends,

We have discussed in past communication that June activity has been a little slower than the active spring market, but we continue to outpace the previous year in the number of properties sold.  Year to date through June 28th, there have been 456 residential properties sold in La Plata County as compared to 349 last year, a 30% increase.  The median price for this year's properties is $315,000 versus $289,500 for last year, an 8.8% increase.

As of this moment there are 179 properties that are under contract with a median price of $309,000 in La Plata County.  It looks like the initial burst of higher prices may have plateaued, as the median price for properties that will sell in the next 30-60 days appears to be a little lower than those that have closed in the first half.

As of today, there are 827 active listings in La Plata County that are not under contract.  This still makes the entire County a "buyers market" based on the amount of inventory.  Of course, in the neighborhoods in the lower price ranges close to Durango, we are in a balanced market and in some cases, a sellers market.

There are a couple of concerns for our summer market:

This morning, Durango is full of smoke.  The fires through the region may have an impact on visitors to the area, and of course, we continue to pray for rain and that we won't have the destructive fires in our area.  You can imagine the economic  impact that has affected South Fork.

Second, interest rates are up more than 1%.  This is a huge change for a buyer, as it has a 10% change in their affordability on an 80% loan to value.  For example, if a buyer could afford a median priced home of $315,500 one month ago, they can now only afford a home priced at $283,950.

Have a great 4th of July!

Don

Don Ricedorff, Broker Associate, GRI, CRS, CCIM, ABR, RSPS, CDPE

The Wells Group Real Estate Brokerage

E-Mail:  don@durangorealproperty.com

Direct:  970-375-7014

Fax:  970-259-5007

Web:  www.DurangoRealProperty.com

Welcoming The Summer Season

Well we are officially in SUMMER with this hot, hot weather!  We are also seeing again this year something we have historically seen every year in early June for the past 10 or more years: these first few weeks after school is out there seems to be a let down in real estate activity.  It always catches us by surprise and there is no concrete explanation that we can think of, except that we know it happens year after year and may be due to pre-occupation with graduations, weddings and family vacations.  We have just come off of a good spring buying market and we don't see this June slow down as any kind of projection for the year to come.  We just think people are taking a breather right now and we predict we will see a continuation of the good activity seen earlier this year as the summer progresses.  We have had several calls this week from some of the Sellers we represent asking why showing activity has seemed to decrease lately.  Hopefully the weeks ahead will see a return of activity by buyers searching for real estate.

I also wanted to give you a general statistical update of the overall market.  As of yesterday there were 940 total residential solds over the last 12 months in La Plata County which represents very strong activity for 2013 to date.  Of those sales, 83.8% were in the price category of $0-499,999; 14.3% were in the price category of $500,000-999,999; and 1.9% where in the price category of $1,000,000 and up.  We have seen an uptick in mortgage rates to around 4.5% but we still believe that real estate sales will continue to be strong through the rest of 2013.