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Rick’s Thoughts On
The Current State Of The Real Estate Market In Durango
Single Family Detached Homes
There is still plenty of demand for detached housing. In the city limits of Durango, it seems like all the city council is approving is either condominiums or residential/commercial mixed use projects. Other than a few homes being built in Skyridge and the Southern Ute Tribe’s project at Three Springs, there is very little new to choose from. In-town Bayfield, which currently has a new sewer tap moratorium, and Forest Lakes (about 6 miles north of Bayfield) both have an inventory of brand new detached homes. Due to lower land costs, these homes are priced about $50,000 to $75,000 less than a comparable Durango home.
Condominiums & Townhomes
The last several years has seen a substantial increase in the number of condominiums built and sold. That trend even extended into Bayfield, where two condo projects were constructed, where none had ever been before. Prices have ranged from the high $100’s to $700,000. Condos at The Glacier Club (Tamarron) have been selling for over a million dollars. The sales in almost every price range have been very strong. However, I see a change coming in 2007. I see the $450,000 and under Durango condo market slowing. Three reasons: (1) I’m not sure our market of buyers wants condos, right now. Those who could make a condo work bought in the last several years. I think more prefer detached housing. (2) With mortgage interest rates coming back down and rents going up, renters can once again qualify for a home mortgage that may be quite similar to their rental payment. (3) We are overbuilt, at least for the next year, in that market segment.
Current Mortgage Rates
We have 30 year fixed rate loans, with no loan origination fees and no points, hovering in the 6% range. For someone like me who has the perspective of having been doing this for over 30 years, that is a great rate. Many of you will remember when it took loans of 12, 14, and even 18% interest to buy a home. Many people are foolishly waiting for the “rates to come back down.” When you consider the fact that the average price of a Durango home rose by 19% last year, you quickly realize that the money saved by a hoped-for lower rate is more than offset by the higher price that has to be paid.
Three
Springs Effects
This is the 20 year project being built by
the Southern Ute Tribe south and east of Durango. It is not on
reservation grounds. Over the life of the project, they intend to build
a community with baseball and soccer fields, school(s), commercial
properties, etc. The new $82 million Mercy Medical Center has already
been completed and opened last July. It serves as a regional hospital
and certainly is a major anchor for the project. Three Springs has
been annexed into the City limits. They currently have about 20
detached homes nearing completion and they will be coming on the market
beginning at $340k and going to about $500k. They are also building
condos. New detached housing so close to town will have some effect on
the older, less well cared for homes in the Crestview, Riverview, Animas
City and Folsom areas. That effect, I would think, would be to
stabilize prices in the above mentioned areas since that is the very
price range those houses would be selling for.
Wrap Up
There is a lot going on in the Durango real
estate market. While many people have to buy to suit their specific
needs “We have to have 4 bedrooms and 3 bathrooms and a large fenced
yard for Fido,” others buy because they are investing in their future.
“Get me a clean rental that will have good appreciation. In 20 years
that free and clear house will be a good part of my retirement.”
Whether you are a buyer or seller, our team of 7 real estate
professionals is here to help guide you through that decision making
process. Please give us a call.
My more nationally oriented electronic newsletter is now on-line and here is a link directly to it:
Your Durango Realtor,
Rick
Lorenz
Team Lorenz @
The Wells Group Real Estate Brokerage
1-800-955-0259 Ext. 145
Direct 970-375-7007
E-Mail Rick@BuyDurango.com
BLOG:
http://durangorealestate.blogspot.com/