As we close out 2025, the Southwest Colorado real estate market has delivered one final twist.
Typically, December is a quiet month where activity hibernates. However, this year told a different story. Inventory surged to new highs, and while the regional average price dipped, buyer activity actually increased compared to last year.
The data reveals a market that finished the year with momentum, but also with distinct "micro-climates." While Durango saw prices climb despite slowing sales, Pagosa Springs pulled off a rare double-feat: rising prices and rising sales volume.
Market Snapshot: A Look Across the Region
Last month’s data highlights a region defined by increased choice for buyers. La Plata County remained the volume leader, commanding an average price of roughly $909,000 with over 300 active listings. Archuleta County (Pagosa Springs) had a particularly strong showing, with prices rebounding to $575,000 and a healthy flow of transactions.
For those seeking efficiency, Montezuma County continued to be the speedster of the region, boasting the quickest sales pace at just 108 days on average, coupled with the most accessible price point of $385,694. Meanwhile, the high-altitude luxury markets of San Miguel and Ouray remain exclusive enclaves; San Miguel averaged nearly $2.84 million per sale, while Ouray stayed comfortably above the $1.1 million mark. San Miguel County data may not reflect the full market, as Telluride operates within a separate local MLS and not all activity may be captured in national reporting systems. Across the board, inventory levels are robust, giving buyers more leverage than they typically see at this time of year.
The Big Picture: Prices Soften, Choices Expand
When we zoom out to look at all seven counties combined, the trend of "normalization" is clear.
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Prices Adjusted Downward: The average regional sale price settled at $1,059,850, an 8.6% decrease from December 2024. This suggests that the high-end frenzy has cooled slightly on a regional scale.
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Inventory is the Story: The number of homes for sale jumped 15.9% year-over-year, ending with 1,077 active listings. This is a significant supply cushion heading into 2026.
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Sales are UP: Despite the price dip—or perhaps because of it—sales volume actually ticked up 2.4% compared to last year. Buyers are active, and they are taking advantage of the improved selection.
City Spotlights: Diverging Paths
The regional averages hide the fascinating splits happening in our local towns.
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Durango
Durango is testing the upper limits of pricing. The average sale price climbed 12.7% to $1,052,700. However, the market pushed back: sold listings dropped significantly by 23.5%. With inventory up a massive 30.6%, Durango sellers are facing a classic bottleneck—prices are high, but competition is fierce, and fewer deals are crossing the finish line. -
Pagosa Springs
Last month, Pagosa made headlines with lower prices driving volume. This month, it flipped the script. Average prices jumped 27.5% to $740,368, yet buyers didn't blink. Sold listings still surged 29.2% year-over-year. This indicates strong demand for quality inventory in Pagosa, regardless of the price hike. -
Bayfield
Bayfield ended the year on a high note. Sales volume exploded, up 57.1% compared to last December (though on smaller volume), while prices saw a healthy, sustainable increase of 7.8% to roughly $543,000. This suggests Bayfield remains a "sweet spot" for local buyers seeking value and stability.
What This Means for Buyers and Sellers
For Buyers:
The "wait and see" strategy has paid off. You are entering 2026 with 15.9% more inventory to choose from than you had a year ago. In markets like Durango, where inventory is up 30% and sales are slowing, you have significant negotiating power. Don't be intimidated by the list price; the data shows sellers are competing for your attention.
For Sellers:
The December data is a reality check. In Durango, higher prices coincided with a 23% drop in sales. In Pagosa, higher prices were absorbed by the market. The difference? Likely the specific inventory mix and value proposition. As we start this new year, "aspirational pricing" is risky. With over 1,000 competitors on the market region-wide, your home must be priced to stand out immediately.
The Bottom Line
December proved that the Southwest Colorado market is resilient but fractured. We are seeing a "multi-speed" market where some towns are accelerating while others are hitting resistance. The unifying theme is inventory. Supply is back, and that means the balance of power is steadily shifting toward the buyer as we open the chapter on 2026.
Thinking about your goals for 2026?
Whether you're looking to buy in a cooling market or sell in a hot one, you need a strategy tailored to your specific neighborhood. Book your FREE Consultation today to start your 2026 plan.
