Most businesses relished seeing 2020, the year of COVID-19, fade into the rearview mirror, but there was one big exception: Real estate was hot on the Western Slope, and La Plata County and Durango were no exceptions.
The median price for a home in the county jumped 15.8% to $449,000 in 2020, up from $387,750 for 2019.
All signs point to a continued strong rise in housing prices.
If you look at only the fourth quarter of 2020, from October to December, the median price for a home in La Plata County rose more than 40%, to $631,807 from $450,277, in the fourth quarter of 2019.
“Last year, we sold about 100 homes over a million dollars. We’ve just never sold even half this quantity on the higher end,” said Christine Serwe, president of the Durango Area Association of Realtors board of directors and a broker with the Wells Group.
“I sold three homes over a million, and those are typically harder to sell. Because your pool of buyers is so much smaller,” she said. “What we saw this year was so many people with the means to do so are looking in our market. It is something a lot of Western Slope markets are seeing.”
In Durango, the median home price in 2020 jumped 13.5%, to $575,000 from $506,625, in 2019. In the fourth quarter, the in-town median price in Durango was $610,000, up from $523,750 in 2019.
Rick Lorenz, who compiles his own real estate statistics for Team Lorenz, said strong demand in the high end is driving median and average prices up. At the same time, limited supply of new housing is helping to fuel higher prices.
“I don’t think a lot of families with a single income are moving here in that higher-end category. With BP gone – which was the oil and gas industry, those were the guys making the big bucks – who is coming in to replace them? I think that’s where COVID comes in,” Lorenz said.
According to statistics compiled by Lorenz, the value of total residential sales in La Plata County hit $243 million for 2020, a 46.8% increase from 2019.
“People are fleeing bigger cities, and I think the outdoor recreation we can offer is an attraction to a good segment of those people,” he said.
Lorenz said a good deal of the home sales came from the upper end.
A total of 100 homes sold in prices ranging from $800,000 to $1 million, which compares with 34 homes sold in that price range in 2019. A total of 98 homes sold were valued $1 million and up, compared with 49 in that price range in 2019.
Of the 98 home sales for $1 million or more, 52% of the sales were cash sales, compared with 57% of cash sales in that price category for 2019, he said.
“You see it year after year with sales worth a million or more – 50% or more are cash sales. It’s been that way for years and years,” Lorenz said.
He also noted that 60% of buyers purchasing homes worth $1 million or more have more than one home, and are dividing time between Southwest Colorado and other homes.
The workplace movement to telecommuting also is bringing people in, Lorenz said.
He cited his daughter as an example: She works and lives in Seattle and was allowed to telecommute as long as she remained in the Seattle area. But with the advent of COVID-19, her company has dropped the requirement that workers remain in the area.
“Things are changing. You don’t have to live within a mile of Microsoft headquarters, or within a mile of Amazon headquarters. You could live 1,000 miles away. And that’s a major change. It is going to place a premium on high-speed internet,” Lorenz said. “One of the first questions you’re going to hear is: What’s the download speed in the subdivision?”
Serwe said Durango’s traditional feeder markets – the Front Range, Texas, Arizona and New Mexico – are still the largest source of new buyers, but more people across the country are discovering Durango, something she thinks is related to COVID-19.
She said a client’s friend decided to move from New Jersey without visiting Southwest Colorado.
“They’re putting up their house for sale, and they’re coming, site unseen. They plan to rent, and then look for a house to buy. It’s fascinating to me that people are making those kinds of moves,” she said. “I think there have been people coming here who wouldn’t have if it wasn’t for COVID. They just wouldn’t have heard of Durango.”
The strong year would have been difficult to predict in March, when showings were halted by public health rules to slow spread of the novel coronavirus.
“I think we were all surprised,” she said. “Veterans of this business were surprised.”
The market has slowed in the past couple of months, which is typical of the winter season.
Now, real estate observers are looking to spring, when the kickoff of the selling season will coincide with an expected widespread availability of the COVID-19 vaccine.
“It will be interesting to see what happens,” she said. “I don’t want to say there’s been an exodus from the cities, but you know people have been seeking to come here, and it’s seemed to slow down in winter. It will be interesting to see if it picks up again in spring.”