With the uncertainty surrounding the COVID crisis, economic downturn, and the upcoming election, you would think that potential homebuyers that did not have to buy this year would stay on the “sidelines” until things became more certain. In some sections of the country, including the Durango and surrounding area, there has been a sharp increase in demand. This has resulted in multiple offers, depleted inventories of available homes, and changed the market from a buyer’s market to a seller’s market.
There are several theories of why demand has surged amid the high levels of uncertainty. Historically low interest rates have induced some buyers to buy now rather than wait. The rioting and unrest in some large cities have caused people who were already thinking about relocation to accelerate their plans. Investors are thinking the run-up in stock prices may be reaching the peak and want to allocate a larger percentage of their portfolio into real estate.
The Durango Mountain/ Purgatory area has experienced a sharp increase in sales and the inventory has dropped to very low levels. The demand and appreciation rate in the mountain area have lagged the Durango in-town and rural areas for a considerable amount of time. I believe buyers started to move into the market late last year realizing that there was tremendous value in these homes. The Chinese Virus temporarily paused the increasing demand in the second quarter; but it surged again starting in the third quarter. Lower priced homes currently are very scarce; historically, there has been ten or more homes available for sale in the “affordable” Tamarron and Cascade Village communities, the very few currently available are priced considerably over the market value.
It will be interesting to see how the market reacts to the election, Chinese Virus, and the direction of the economy over the next six months into the traditional start of the home-buying season next spring.