Are High Prices Here to Stay?

7/15/2021

Dan Korman, owner of Alpenglow Properties, compares real estate prices for the first half of the year with last year and speculates that the hot market is setting a new normal. Sponsored by Alpenglow Properties

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I am super excited to dig into the second quarter statistics with you this month, as some of the numbers are extraordinarily deviant. Welcome to the Durango Real Estate Update. It is the middle of summer. I'm Dan Korman, broker owner of Alpenglow Properties, a full-time real estate professional since 2004. We're going to nerd out a little bit today, so to make digesting the numbers as easy as possible, all the stats and graphs we'll be showing today are based off of a six month rolling average. Or in other words, we'll be looking at market statistics from the first half of the year in 2021, compared to the same time of 2020. As you know, record sales volume in every sector, along with some of the highest pricing in history have pervaded every conversation you're trying to have these days. I would like to point out one of the biggest outliers of the year so far, that's attached units in the Durango Mountain area, also known as North County. When grouped together, the condo and town home market in Durango Mountain area has gone crazy. The median price of buyer paid in 2021 has doubled year over year jumping from two 30 after two quarters in 2020 to a whopping $485,000 at the end of June this year. This number in conjunction with the sales volume of attached units in North County, increasing 150% year over year as well, that's three X the same time as last year. This is a trajectory that will seemingly go to the moon unless something drastic happens, like increased interest rates or a fallout we couldn't anticipate. While the mountain area stats are definitely the standout data points so far, the fact that every sector in every area has shown an increase, is an affirmation of the insane market we're experiencing right here in Southwest Colorado this year. Take a look at this table, along with the associated graphs. As you can see, active listings are down across the board with the only increase in inventory year over year, showing up in the new condo and townhouse listings. So, that's good, I guess. But ultimately for all of the catching up the market did over the pandemic with new listings, the units are getting snapped up just as soon as they hit the market, which does little to help our month's supply. Maybe a big snow will scare up some listings this winter, but not really holding my breath for that. Jokes aside, what does it all mean? Well, my crystal ball is saying that we are setting new levels of normalcy within our market, as high as they may be. Some of the extreme listing prices will indeed fail to sell, and you'll see a few of the overpriced homes reduce as days on market increase. But, from what all of the data is saying so far, and pending no major shifts in interest rates or inflation, Durango will continue to see a high demand with little relief in housing inventory. If you, or someone you know, is thinking about buying or selling a home in the next couple of months, I'd love to hear from you so we can talk through all of the nuanced information associated with evaluating stats in order to best navigate today's market. I thank you for watching the real estate updates. As always, you can reach me directly at dan@alpenglowproperties.com, or on any of our social media handles @DurangoBrokers. Be kind to your neighbors, and have a wonderful summer; be safe, no fires, no fireworks, and we'll see you next month.

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