With a cooling of the air comes a cooling of the real estate market, but that’s not all bad as we’ll discuss more in depth in this episode. Interest rates reached the highest they've been in 20 years and the month’s supply of homes has more than doubled. This story is sponsored by Alpenglow Properties LLC and the Local News Network
Hi, and welcome to the 4th Quarter everybody. My name is Dan Korman, owner/broker of Alpenglow Properties, and it's the most wonderful time of the year, flannel season. So, with the cooling of the air comes the cooling of the real estate market. But that's not all bad as we'll discuss a little bit more in depth in this episode. Interest rates are the highest they've been in 20 years and the month's supply of homes has more than doubled. So a little bit of a contrast. Welcome to the Durango Real Estate Update. There's nothing worse than knowing that you're paying 200 to 500,000 more than you would on the same home you would've bought last year, right? But hindsight is literally 2020. So all we can do is try to achieve our goals in the landscape of the present. While every single headline is stating doom and gloom for the real estate market, Durango and the greater La Plata region is resilient. It's important to understand some of the bright points as there are many factors that have contributed to where we are today. And most of it, such as the global pandemic and the Ukraine War are factors that you and I have no control over. So, the last two years will be studied for years to come, but statistically things are starting to normalize a little bit. Take new listings for example. Durango In-Town Homes saw a 19% bump in inventory for Q3 compared to the same timeframe in 2021. A welcome reprieve on inventory, which we'll discuss in a moment. The number of new listings added in the third quarter of 2022 are still only about half of what was added in the third quarter of 2019. So there's a long way to get back to a balanced market. Active listing inventory showed a huge gain compared to last year, but like new listing data, we are still a ways off from a balanced market. La Plata County saw an increase in the number of active single family homes for sale by 32%, and Durango's active inventory at the end of Q3 increased by 55% year over year, but we're still short 300 homes when compared to how many active listings existed at the end of September in 2019. The winter market cycle is gearing up, and it will be exacerbated by the increased mortgage rates and other socioeconomic factors. I foresee this graph edging up over the next two years with both the troughs and the crest rising up to new normals. Bright spot in all of the data is with the month's supply of homes. The month's supply is one of the best indicators of whether or not a market is balanced. And when the month supply is six, or when the average home takes about six months for a home to move through the entire market from list to close, that means it is neither a buyers' or a seller's market and kumbaya, drum circles persist. Pre-pandemic, Durango is in a buyer's market, and in September of 2019, the county had over eight months of housing stock available at that time. Today we have a three month supply of homes, which is a very welcome 130% increase for In-town Durango year over year, and almost double what it was for the entire county in Q3 of 2021. At this point, buyers are at a pretty pricey crossroads. On one hand, sellers are still pricing homes at all time highs, and this is due to a rear view mirror effect that has them looking back at the last two years of activity, hard to ignore that. In addition, money has gotten more expensive than it has been in a long time. So this coupling of factors leads me to believe that a softening is not only imminent, but is already kind of happening right now. And for those buyers looking to enter the market, just be patient because patience will be your most lucrative virtue over time. My prediction is that rates will get worse before they get better, but if the Fed can reign in inflation soon, then we can see rates finally rest in the high fives to low sixes, which you know, could lead to an actual balanced market in 2023. Who knows? And only time will tell. So, thank you for watching and please feel free to reach out anytime with your thoughts on how this market might fare through the winter. And we'll see you next time.