The real estate landscape in La Plata County witnessed a downturn in 2023, with home sales showing a decline of nearly 21% compared to the previous year, according to data from the Durango Area Association of Realtors. The figures indicate 842 home sales in the county during 2023, coupled with a continued increase in property prices, with the median home price reaching $660,450.
Various regions across La Plata County experienced a consistent double-digit decrease in the number of homes sold, notably in Bayfield, where both in-town and rural home sales saw substantial reductions. However, rural homes in Bayfield did experience a modest median price decrease of 2.6%, offering potential relief for homebuyers facing affordability challenges.
The persistently low residential housing inventory, combined with rising mortgage interest rates and construction costs, remains a significant challenge impacting the local residential real estate market. Bob Allen of Allen & Associates highlighted the broader consequences, emphasizing the difficulty faced by government agencies, healthcare providers, and other enterprises in hiring and retaining employees due to high housing costs.
DAAR President Kayden Hyson recommended exploring areas east of Durango along U.S. Highway 160, considering promising options in terms of infrastructure and water projects. Despite this, challenges persist due to decreasing inventory and rising interest rates, which may take around 10 years for the housing market to fully recover from pre-COVID-19 conditions.
Looking ahead to 2024, DAAR foresees ongoing inventory challenges as interest rates gradually decrease. The industry expects interest rates to reach around 6.5%, potentially attracting a larger pool of buyers waiting for favorable pricing and increased inventory. While there is optimism about interest rates lowering, the high demand for housing and limited supply could extend the timeline for a full market recovery.