Last week was our annual Wells Group Forecast, and in case you missed it, we wanted to share a few of the highlights. First, below are some of the predictions heading into the 2019 La Plata County real estate year.
We predict it will be a similar real estate market in 2019 that we saw in 2018. Interest rates may affect affordability for some buyers, and as we’ve mentioned in the last few weeks, the year has had a slower start due to a heavy snowfall this winter (which is great for the water situation in La Plata County!) In addition, construction costs will continue to rise and impact housing costs. Material and labor costs have increased, which makes it difficult for builders to supply in the below-$500,000 market. Air service continues to bolster the real estate market. As air service expands, this allows more second-home, commuter, and retiree buyers to consider Durango for real estate purchases. We also expect to see second home, vacation home, and retirement buyers increase as the Southwest Colorado lifestyle is a draw. There will also be increased demand for homes for seniors. Lack of supply below $500,000 presents both a threat and an opportunity. 71 % of homebuyers in La Plata County purchase a property under $500,000, but increasing costs make this market more difficult for builders.
For a look back at 2018, here is what we saw:
- Total sale transactions stable in 2018
- Total sale $ volume up in 2018
- Strong home builder interest in improved vacant residential lots (Edgemont and Three Springs)
- Higher mortgage rates leads to less affordability
- Homeowners may be less willing to move
- Low unemployment rate makes it hard to hire workers
- Despite decline in residential units permitted, total construction stable (still far less than 1990’s and early 2000s)
- Slowing population growth due to decline in net migration
- Lack of inventory and new construction leads to decline in Bayfield home sale activity
- 2018 drought – 416 Fire
- City sales tax up 1.9%, Airport up 2% despite decline in tourist visitors
These are just some of the highlights from the presentation. There is a significant amount of data and charts to get a true scope of La Plata County and the economy as a whole. They cover population growth, the labor force, tourism, and more. Here’s a link to the presentation for the details: https://wellsgroupdurango.com/forecast/2019-durango-real-estate-forecast/. As always, we would love to discuss La Plata County real estate and the economy, do not hesitate to contact us.