2026 is underway, and we are looking forward to another strong and normalizing year in the Southwest Colorado real estate market. Looking back at 2025, we can analyze key performance metrics such as prices, inventory, and sales, all of which are influenced by a range of local, national, and global factors. By examining this data, we are better able to understand local market trends and develop informed expectations for the coming year. Although the La Plata County, Southwest Colorado, national, and global real estate markets are constantly evolving, having this data provides valuable insight that allows us to guide clients thoughtfully and strategically through each transaction.
2025 In Review
The 2025 La Plata County residential real estate market experienced a healthy mix of continued growth and increasing stabilization.
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Total residential sales closely mirrored 2023 and 2024. 2025 ended with 880 total residential sales, representing less than a 1% change from the prior two years. While this remains below pre-2022 levels, when annual sales neared 1,400, several market and external factors continue to influence activity.
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Inventory continued to trend upward year-over-year. Beginning 2025 with approximately 300 active listings, which is 50+ more than the start of 2024. This steady increase in supply is an important step toward a more sustainable market environment.
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Year-over-year average and median sale prices increased, as expected. The average sale price in La Plata County is now $884,633, reflecting a 10% annual increase and largely influenced by high-end, luxury sales. The median sale price increased to $682,500, which more accurately reflects the broader market. This was a 3.4% increase compared to December 2024 - a healthy and anticipated level of appreciation.
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Days on market also increased compared to last year. This gave buyers more time to preview and evaluate homes. However, properties are still moving at a relatively brisk pace, especially when compared to pre-Covid norms. An average of 104 days on market and a median of 74 days shows demand is still high, even as the heightened buyer activity of recent years has settled.
2025 Prediction Review
At the beginning of 2025, we analyzed 2024 market data to form predictions for what we expected to see in 2025, which included modest growth in inventory and sales, along with minimal changes in median home prices and days on market. These projections proved largely accurate, with the primary exception being a nearly 25% growth in inventory - that was a welcome surprise! The most significant variable was mortgage rates; had rates dropped below 6%, market activity would have shifted more dramatically. Since that did not occur, the overall market remained very similar to the prior year.
Our 2026 Predictions
Moving into 2026, we anticipate continued increases in both inventory and sales activity as supply continues to rebuild. While rising inventory can place downward pressure on pricing, La Plata County remains a high-demand market and we expect to see a more typical 4-6% annual increase in median sales price. Time on market is expected to stay consistent with 2025, with the average hovering around 120 days, longer than the record lows from 2021 - 2023, but still faster than the pre-pandemic norms.
La Plata County Market Behavior to Watch in 2026:
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Mortgage rates will remain around 6%. We are beginning 2026 at approximately 6.16% versus 6.91% in January 2025. While this number did drop over half a percent over the course of last year, we don’t anticipate rates over 6.5% this year; and ideally, we’ll see them move closer to 5.75% which would initiate more movement and allow buyers to enter the market with a more attainable monthly payment. Even with the current rates, there are many creative financing strategies such as rate buy-downs and seller concessions that are becoming commonplace; 62% of 2025 transactions involved seller concessions, on average in the amount $11,000. If a sustained drop in mortgage rates does occur (which we welcome with open arms!) time on market will speed up as more buyers enter or re-enter the market.
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Inventory will continue to increase. While a huge growth is not expected, we do think that many sellers will put their homes on the market despite being on the fence for the last couple of years. We’ve talked with many homeowners who want to sell for one reason or another, but trading in their sub-3% interest rate for 7% has kept them in place. We believe this year we will see some of those sellers putting their homes on the market as owners are accepting these conditions as the “new normal”. This, coupled with some new construction inventory hitting the market, will contribute to more options for buyers. For 2026, we hope to see this grow even more, with another 25-30% increase year-over-year.
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The market will stay strong under $1 million. With increased inventory, which will be absorbed quickly, we expect to see about 5% appreciation in that sector. The $1 million to $1.5 million should also perform well, though with added inventory we will likely see a little bit less appreciation (3%) and more days on the market. Properties above $1.5 million are likely to experience higher inventory levels, leading to longer market times, increased price competition, and therefore minimal appreciation in the 1-2% range.
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The resort market will be slow this year. This is due to the extremely mild winter so far, hopefully we will see it rebound in Q3 and Q4.
In summary, we anticipate total market sales will increase to 900 sales, appreciation will be 4-5%, and average days on market will hold steady around 120 days.
Our goal at The Durango Team at The Wells Group is to provide steady, knowledgeable, and experience-based real estate services for our buyers and sellers. It is our privilege to continue serving Southwest Colorado and beyond in all real estate sectors including residential, commercial, land, resort-area and farm and ranch properties. Please do not hesitate to contact us for more market data, area information, and trusted real estate guidance.
