Every year, The Wells Group presents a recap of the prior year’s real estate activity in La Plata County along with a forecast about where the local market may be headed. John Wells, Broker Owner, is joined by Bob Allen, Appraiser and Consultant with Allen and Associates, and Jack Llewellyn, Director of the Durango Chamber of Commerce as the moderator.
This year, the main topic was the interest rates jump from just over 2%, an all-time low during the Covid-19 pandemic, to over 6% by the end of 2022, and continuing through the beginning of 2023. The impact on the real estate market most certainly did not go unnoticed, however, there was still a large percentage of all-cash buyers. Because of increased interest rates and a slowdown in buyer activity, supply has started to rebuild but demand remains high, keeping the average and median prices elevated.
Another discussion point was the lack of construction in our area which also keeps inventory from growing, especially for multi-family units. Not only did high overall construction costs due to lumber and other building materials inhibit the addition of new units, but also labor shortages and the implications of the construction defect laws.
These factors play into the rental market as fewer homebuyers can afford to purchase a home which keeps rental rates high and vacancy rates low. Lisa Bloomquist, Executive Director of HomesFund, also joined the conversation about affordable housing opportunities in the works and their lending programs, specifically for first-time homebuyers.
John ended by adding some insight into what the rest of 2023 may look like in the industry. He predicted that rental demand would remain strong, interest rates will “normalize”, home sales prices will stabilize even with the low supply and relatively high demand, and most importantly there will not be a housing crash.
For more information or to view the presentation, please visit The Wells Group Annual Forecast website page. We would love to answer any questions you have or discuss the La Plata County real estate market with you.