November 2024 Real Estate Recap: Southwest Colorado & Beyond
As we close out November, the Southwest Colorado real estate market presents some fascinating trends, with clear opportunities and challenges for both buyers and sellers. By examining key metrics—sold listings, average days on market, active listings, and average sale prices—we can see how the market has shifted compared to previous years, offering valuable insights into the current landscape. Southwest Colorado Regional Overview Sold Listings: This November, 194 properties were sold, marking a rebound from 173 transactions in 2023. This increase demonstrates renewed buyer activity, supported by recent declines in mortgage rates. However, the slightly lower figure compared to 2022’s 206 sales reflects ongoing affordability challenges. Sellers can take confidence in the steady demand, which persists despite broader economic uncertainties. Average Days on Market: With an average of 112 days on the market, properties are selling faster than in 2023 (116 days) and significantly quicker than the 162-day average in 2014. This trend signals that well-priced properties continue to attract buyers efficiently, but sellers should remain realistic with pricing to maintain momentum. Active Listings: Inventory levels at 1,038 remain constrained compared to historical norms like 2014’s 2,062 listings. However, the 13% increase from 2023 shows some improvement, offering buyers a slightly broader selection. The 33% rise compared to 2022 indicates more confidence among sellers entering the market. Average Sale Price: In 2024, the average sale price settled at $877,717, a decrease from the peak of $1,234,871 in 2023, largely due to fewer high-end transactions. This figure is also lower than 2022’s $1,001,513 but remains a testament to the market's overall stability. Looking back to 2014, when the average was just $260,133, the long-term growth underscores the impressive resilience and strength of the Southwest Colorado market. Durango Sold Listings: With 56 transactions in November 2024, Durango’s market shows resilience, outperforming the 44 sales in 2023 and the 48 in 2022. This sustained activity, despite affordability challenges and a tighter inventory, reflects a consistent demand for Durango’s unique appeal. Sellers can capitalize on this demand by positioning their properties strategically to appeal to these motivated buyers. Average Days on Market: Homes spent an average of 113 days on the market in 2024, significantly longer than 2023’s 74 days and also slower than the 93-day average in 2022. This increase indicates that buyers are taking more time to evaluate their options, though desirable properties still tend to move quickly once listed. Active Listings: The 216 active listings in November represent an increase from 194 in 2023 and 151 in 2022, giving buyers more options. However, inventory remains well below 2014’s 456 listings, keeping competition high for quality properties. Average Sale Price: At $1,007,693, the average sale price in 2024 underscores Durango’s enduring appeal. While it has decreased from 2023’s $1,138,361, it represents a significant increase compared to 2022’s $774,178 and far exceeds 2014’s $438,752, showcasing substantial long-term growth and value. Pagosa Springs Sold Listings: Pagosa Springs saw 22 transactions in November 2024, holding steady with 2023 and slightly below 2022’s 24 sales. This stability underscores the town’s consistent appeal to buyers seeking both primary and vacation properties. Average Days on Market: The average of 134 days marks an increase from 124 in 2023 and 111 in 2022, suggesting buyers may be negotiating more carefully. However, this is still an improvement over 2014’s 154-day average. Active Listings: Inventory increased to 198 listings in 2024, up from 173 in 2023 and 151 in 2022, offering more opportunities for buyers. The contrast with 2014’s 353 listings shows how inventory remains tight over the long term. Average Sale Price: At $650,745, the 2024 average sale price reflects steady growth from $573,467 in 2023 and is nearly identical to 2022’s $644,847. Compared to 2014’s $303,122, the appreciation demonstrates Pagosa Springs’ sustained market strength. Bayfield Sold Listings: Bayfield’s 17 sales in November 2024 marked an increase from 11 in 2023 and 9 in 2022, indicating rising interest in this smaller market. Sellers here may find increased demand working in their favor. Average Days on Market: Properties in Bayfield averaged 125 days on the market in 2024, significantly longer than 68 days in 2023 and 81 days in 2022. This could reflect buyers taking more time to evaluate properties, creating opportunities for negotiation. Active Listings: The 52 active listings in 2024 represent an increase from 41 in 2023 and 40 in 2022 but remain well below 2014’s 92 listings, keeping inventory competitive. Average Sale Price: At $574,853, the 2024 average sale price is nearly unchanged from $575,355 in 2023 and above 2022’s $522,778. The significant appreciation from 2014’s $328,027 reflects Bayfield’s growing appeal to buyers seeking value and potential. How National Trends Are Shaping Southwest Colorado On the national stage, November 2024 has been characterized by a notable "Santa Claus rally" in mortgage rates, with rates dropping into the 5.75%-6.25% range. This decline has reinvigorated buyer demand across the country, leading to double-digit growth in pending home sales compared to the previous year. Meanwhile, job creation and wage growth of 4% annually have boosted consumer confidence, further fueling housing activity. In contrast, Southwest Colorado’s market exhibits resilience and some unique dynamics: Demand Stability: While the national market is experiencing a resurgence in activity, Southwest Colorado’s demand has remained relatively steady over recent years. The 12% increase in sold listings from 2023 to 2024 mirrors national trends but is tempered by the region’s constrained inventory and affordability challenges. Inventory Pressure: Nationally, housing supply remains tight, but Southwest Colorado faces even more significant inventory constraints. With 1,038 active listings in November 2024 compared to over 2,000 in 2014, local buyers are navigating a highly competitive environment, which aligns with national trends of limited inventory. Price Adjustments: Average sale prices nationally have started stabilizing or increasing slightly due to improved affordability from lower rates. In Southwest Colorado, however, the average sale price has decreased from 2023, reflecting shifts in the local high-end market. Despite this, long-term appreciation remains robust. These comparisons highlight Southwest Colorado’s unique position: while benefiting from national tailwinds like lower mortgage rates, the region’s persistent inventory challenges and distinct buyer preferences create a market that marches to its own beat. Buyers and sellers should consider both local and national trends when making decisions. Key Takeaways Inventory constraints continue to shape the Southwest Colorado market, driving competition and keeping prices elevated in most areas. Long-term price appreciation highlights the region’s enduring appeal, with significant gains since 2014 across all markets. Durango remains the standout in terms of both transaction volume and price, but Pagosa Springs and Bayfield offer opportunities for buyers and sellers in niche segments. Sellers should focus on pricing competitively to capture demand quickly, while buyers should be prepared to act decisively in this dynamic market. As the year draws to a close, Southwest Colorado’s real estate market showcases its resilience and potential. Whether you’re looking to buy, sell, or invest, understanding these trends is crucial for making informed decisions. Contact us for tailored advice and insights to help you navigate this exciting market. For further details on market trends and to explore opportunities in Southwest Colorado, feel free to contact me. Let’s navigate these changing times together and find the best deals tailored to your needs. Stay informed! Fill out the form below to SUBSCRIBE to our weekly newsletter!
NAR’s Scandals and the Systemic Failures of a Nonprofit Trade Association
In a previous article, Is the Real Estate Industry on the Brink of a Major Shift?, we explored how the American Real Estate Association (AREA) is emerging as a promising alternative to the National Association of Realtors (NAR). While AREA emphasizes transparency and accountability, NAR has found itself in the spotlight for all the wrong reasons—embroiled in scandal and facing one of the largest legal challenges in real estate history. The Sitzer/Burnett lawsuit and recent DOJ involvement have magnified the systemic issues within NAR, showing how a lack of ethical leadership in a nonprofit trade organization can destabilize an entire industry. The Role of the DOJ in the Sitzer/Burnett Settlement As we stand one day away from a decision on the landmark Sitzer/Burnett settlement, the Department of Justice (DOJ) has made its stance known. Although not officially part of the case, the DOJ filed a statement of interest with two critical points for the judge to consider: No Shield from Future Antitrust Lawsuits: The DOJ strongly advised that NAR should not be shielded from future antitrust cases. This signals a broader intent to continue addressing systemic issues in the real estate industry. Concerns About Buyer Agreements: The DOJ criticized current buyer agreements, arguing they are not in the best interest of consumers. For years, real estate professionals have echoed these sentiments, calling these agreements outdated and ineffective. This intervention by the DOJ highlights the depth of systemic problems at NAR. As one commentator put it, forcing buyers to sign agreements without a prior relationship is like walking into a bar and proposing marriage—an approach that serves neither agents nor consumers effectively. The Fallout of NAR’s Leadership Failures NAR’s ethical lapses, as detailed in The New York Times exposé, have created a domino effect, culminating in cases like Sitzer/Burnett. A nonprofit trade organization, NAR is supposed to act in the best interest of its members and the industry at large. Instead, the organization has: Spent member dues on excessive executive perks, such as a $10 million travel budget and lavish compensation packages. Fostered a toxic culture, including allegations of harassment and intimidation. Failed to address systemic issues, leaving the industry vulnerable to legal challenges and ongoing scrutiny. The $1.8 billion verdict in the Sitzer/Burnett case is a direct consequence of these failings. The DOJ’s involvement only underscores the need for reform, not just within NAR, but across the entire real estate industry. A Litigated Industry Is Not the Answer While the DOJ’s concerns are valid, a fully litigated real estate industry is not sustainable. Clarity, reform, and ethical leadership are needed to move forward. Lawsuits like Sitzer/Burnett create uncertainty, making it difficult for agents and consumers to navigate the market effectively. As the judge prepares to rule on the settlement, one thing is clear: This case is just the beginning. More lawsuits are likely, but the real challenge lies in addressing the root causes of these issues. A Path Toward Transparency and Reform For NAR to fulfill its role as a nonprofit trade organization, it must take meaningful steps toward reform. This includes: Rebuilding Trust: Eliminating extravagant spending and prioritizing member needs. Aligning with Industry Needs: Creating fairer, more transparent buyer agreements. Promoting Ethical Leadership: Fostering a culture that values accountability and transparency. Organizations like AREA provide a model for what the future of real estate associations could look like transparent, member-focused, and adaptable to the needs of modern industry. The challenges facing NAR highlight the consequences of misaligned leadership in a nonprofit organization. As the industry awaits the judge’s decision on the Sitzer/Burnett settlement, it’s clear that systemic reform is not just necessary—it’s inevitable. For agents and consumers, this moment is a reminder to demand better practices and leadership that puts their interests first. If you’re navigating these changes or curious about how they affect the Southwest Colorado market, let’s connect. For more on how AREA and other innovations are reshaping real estate, revisit our blog: Is the Real Estate Industry on the Brink of a Major Shift? Let’s navigate these changing times together and find the best deals tailored to your needs. Stay informed! Fill out the form below to SUBSCRIBE to our weekly newsletter!
Today's Housing Market: Understanding Credit, Stress, and Mortgage Rates
As a seasoned real estate professional, I often hear concerns from clients about the housing market. Questions about housing credit, market stress, and fluctuating mortgage rates are top of mind for many. With memories of the 2008 housing crisis still fresh for some, it's natural to wonder if we're heading down a similar path. However, as lead housing analyst for Housing Wire, Logan Mohtashami eloquently highlighted in a recent podcast, the current market is built on fundamentally different foundations. Let's delve into the latest insights to understand where we stand today. Updated Housing Credit Data: A Strong Foundation The Federal Reserve Bank of New York recently released updated housing credit data, shedding light on the current state of the housing market. The key takeaway? We're not witnessing a replay of 2008. Here's why: Robust Credit Standards: Over the past 14 years, credit standards have remained consistently strong. Unlike the pre-2008 era, lenders have maintained stringent requirements, ensuring that borrowers are well-qualified. Healthy FICO Scores: Borrowers' credit scores have been impressively high. This trend reflects responsible lending practices and financially stable borrowers who are less likely to default on their mortgages. Low Delinquency Rates: Delinquencies across 30, 60, and 90-day periods have not returned to pre-pandemic levels as some expected—they're actually better. This indicates that homeowners are keeping up with their mortgage payments. Minimal Underwater Mortgages: Only about 1.7% of homes are currently underwater, meaning the homeowner owes more on the mortgage than the home's current value. This is the lowest level ever recorded, a stark contrast to the 23% seen in 2010. Debunking the 2008 Comparison The 2008 housing crisis was fueled by lax lending standards, high-risk mortgage products, and an abundance of speculative buying. Today's market is fundamentally different: Loan-to-Value Ratios (LTVs): The average LTV ratio now is under 50%, compared to around 85% in 2008. Homeowners have more equity in their homes, providing a cushion against market fluctuations. Fixed-Rate Mortgages Dominate: The majority of homeowners have 30-year fixed-rate mortgages. This shields them from payment shocks due to interest rate changes, unlike the adjustable-rate mortgages (ARMs) that were prevalent before the crash. Stable Homeownership Behavior: Most Americans view their homes as long-term investments and places to live, not speculative assets. This stability reduces the likelihood of mass sell-offs that can destabilize the market. Understanding Housing Stress in Specific Markets While the national housing market remains strong, certain local markets are experiencing stress due to unique factors. Florida: Insurance Challenges Florida homeowners are grappling with rising property insurance costs and, in some cases, difficulty obtaining insurance at all. Factors contributing to this include: Natural Disasters: Frequent hurricanes and flooding increase insurance risks. Insurance Market Turmoil: Some insurers have pulled out of the market or increased premiums significantly. These challenges can strain homeowners financially but aren't indicative of systemic credit issues like those seen in 2008. Austin, Texas: Affordability Pressures Austin has seen significant home price appreciation—up to 76.5% over two and a half years. This rapid increase has led to affordability issues: Elevated Home Prices: High prices make it difficult for local buyers to enter the market. Reduced Migration: Austin relies on inbound migration for housing demand, particularly from higher-income areas like California. A slowdown in migration affects demand. Increased Inventory: With fewer buyers, homes stay on the market longer, increasing inventory levels. However, these conditions stem from local market dynamics rather than national credit stress. Mortgage Rates and Economic Indicators Mortgage rates have been a hot topic, especially as they remain higher than many would like. Understanding what influences these rates can provide clarity. Economic Strength Keeps Rates Elevated Strong Economic Data: Robust retail sales and positive revisions in economic reports signal a strong economy. Federal Reserve Actions: While the Federal Reserve has hinted at not raising rates further, they are also cautious about lowering them too quickly. The Role of the 10-Year Treasury Yield Key Indicator: The 10-year Treasury yield is closely tied to mortgage rates. Currently, there's a "tug-of-war" at key yield levels. Market Sentiment: As long as economic indicators remain strong, the 10-year yield—and by extension, mortgage rates—may stay elevated. Looking Ahead: Data Over Doom In times of uncertainty, it's easy to be swayed by doom-and-gloom predictions. However, making informed decisions based on data is crucial. Avoid Ideological Takes: Focus on factual data rather than speculative forecasts rooted in fear or bias. Monitor Economic Indicators: Keep an eye on employment figures, consumer spending, and inflation rates, as these will influence mortgage rates and housing demand. Stay Informed: Work with professionals who rely on comprehensive data analysis to guide their insights. Advice for Buyers and Sellers For Buyers: Assess Affordability: Higher mortgage rates impact purchasing power. Calculate what you can comfortably afford, considering potential rate changes. Consider Long-Term Value: Real estate remains a sound long-term investment. If you're financially ready, market timing is less critical. For Sellers: Price Realistically: Be mindful of local market conditions. Overpricing can lead to longer listing times. Highlight Value: In markets with increased inventory, showcasing the unique value of your property becomes even more important. Logan Mohtashami’s insights remind us that real estate is a long-term game rooted in fundamentals, not fear. By understanding the data and ignoring sensationalist narratives, buyers and sellers can make informed decisions that align with their goals. As Logan would say, “Focus on the charts, not the chaos.” In today’s market, knowledge is power. Work with a trusted professional who can guide you through the complexities and help you navigate your next move confidently. If you’re ready to explore your options in Southwest Colorado or want personalized advice, feel free to reach out—I’m here to help. Let’s navigate these changing times together and find the best deals tailored to your needs. Stay informed! Fill out the form below to SUBSCRIBE to our weekly newsletter!
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