In the real estate market, the basic economic rules of supply and demand play a significant role. However, depending on which way the market is leaning, it is defined as a buyer’s market or a seller’s market. Below is an explanation of each type of market and how they affect both buyers and sellers.
Buyer’s Market
An ideal buyer’s market is created when supply (the housing inventory) is high and interest rates are low, making purchasing more attainable and offering more choices. When there are more homes on the market, it tends to lower prices or at least create more negotiating power for buyers. Although a buyer’s market can pull more buyers off of the sidelines, ultimately creating more competition, it is primarily influenced by the amount of properties available.
Tips for Buyers
In a buyer’s market, buyers have the upper hand. However, strategy matters when submitting offers as there is still competition between buyers. Being clear about your wants and needs, and staying in close communication with your lender, will help you submit a confident and competitive offer.
Tips for Sellers
Accurate pricing of your home based on a comparative market analysis and professional marketing can make a big difference in attracting buyers to your home. When there is substantial competition between active listings, having a competitive pricing strategy and marketing plan in place is crucial. Setting realistic expectations for both selling price and time on market is also important.
Seller’s Market
A seller’s market happens when demand outweighs supply. In real estate, this occurs when there are more active buyers than there are active listings (or sellers). This gives sellers the upper hand because they typically see increased offer prices due to limited options for buyers. However, just like in a buyer’s market, lower interest rates benefit sellers too, as they expand buyers’ purchasing power.
Tips for Sellers
Although sellers have the advantage in this scenario, proper pricing and marketing still play a key role. In a sellers’ market, you may receive multiple offers or encounter appraisal challenges, so it is important to work with a real estate professional who can guide you through the process- from accepting the best offer to successfully negotiating due diligence, inspections, and closing.
Tips for Buyers
In a strong seller’s market, homes can go under contract within 24 hours of listing. Buyers may submit full price (or higher) offers without touring the property, waive home inspections (NOT recommended!), or close quickly leaving little time for due diligence. While this describes a more extreme market, being prepared, crafting an appealing initial offer, and knowing your must-haves in a home are key. Having a RealtorⓇ on your team who understands these market conditions can help expedite the contract process when a home becomes available.
Balanced Market
A balanced market occurs when inventory meets the demand of active buyers. Experts say that nationally, six months of inventory is this magic number - anything higher signals a buyer’s market, while anything lower leans towards a seller’s market. A month’s inventory is calculated by the number of active listings divided by the prior year’s average number of homes sold per month.
Tips for Buyers
Staying in touch with your home buying team - both lender and RealtorⓇ - is essential so that you stay informed on new listings and interest rate fluctuations. This ensures you’re prepared to view any homes that come on the market within a more specific budget.
Tips for Sellers
For sellers, accurate pricing is imperative because buyers aren’t pressured to offer over fair market value. Getting a pre-inspection can help mitigate buyer hesitations and reduce the risk of contract terminations due to inspection concerns. The upfront transparency benefits both parties and contributes to a higher likelihood of a successful closing. However, be prepared to negotiate as buyers have more flexibility and choices in a balanced market.
La Plata County Real Estate Market
Looking back at the Covid years (2020 - 2023) in the La Plata County real estate market and beyond, it was a significant seller’s market. Demand was high due to an influx of people relocating due to remote work and incentivizing 2% mortgage rates. This unexpected surge sent home prices soaring compared to 2019. Even though mortgage rates have since climbed to 7%+ prices have remained at elevated levels.
As of early 2025, while La Plata County’s housing inventory has rebuilt to about 50% of pre-Covid times, it remains under the six month’s threshold, leaning towards a seller’s market. By the current numbers, this holds true, but external factors, such as high 6% +/- interest rates and an election year, have reduced the number of active buyers. While data suggests a seller’s market, we’re still experiencing price reductions and extended days on market for some properties. High interest rates have caused a chain reaction - buyers can afford less, and potential sellers hesitate to give up their existing 2-3% mortgage rates.
For both buyers and sellers, working with a professional RealtorⓇ is a valuable investment. Our full-time agents, Max Hutcheson and Deven Meininger, closely monitor our local market and provide up to date knowledge and top-tier service for our clients. Please do not hesitate to contact The Durango Team at The Wells Group for further information on the Southwest Colorado real estate market.
