In Durango, we’re seeing prices start to crawl back up to sustainable levels and interest rates stay historically low. Properties – vacant land and homes – aren’t moving as fast as they did at the height of the housing boom, but they are moving faster than just after the bust.
Havard finance lecturer, Nicholas P. Retsinas, suggests three reasons for acceleration in the national recovery.
- The improvement of the national economy, as a whole,
- Changes in household formation (such as adult children finally able to leave the parental home due to stronger job market), and
- Abnormally low interest rates.
In the interview, from the Harvard Business School “Working Knowledge” newsletter, Retsinas dives minimally into the regions most hard hit in the downturn, too. For instance, in Southern California and Las Vegas, institutional buying of properties is bolstering those markets. Corporations buy much of the inventory to rent to individuals, until prices come up to effective levels to consider selling.
Retsinas points to discussion of the mortgage interest tax deduction as potentially one of the biggest influences on full housing recovery. It is a marked fiscal benefit to buying and owning a home, especially to the less affluent.
How does this apply to Southwest Colorado? Well, first, I’m not an economist – so I’ll keep my observations to what seems to be happening right now. The strengthening economy helps all of us, obviously. Land and properties are still plentiful, but the market is not as flooded as it once was. Interest rates are possibly the strongest reason to buy right now. If you’re in a position to buy, it would be a shame to not lock in at these rates.
The ultimate good news, in my opinion, is that Southwest Colorado – while not immune to the larger market trends – is slightly more insulated. We remain an area that people want to live and own second homes. It is a lifestyle choice to live here and as such, our steadfast population tends to weather the spikes and drops in the market with slightly less drama. Bottom line: Southwest Colorado is and continues to be a wonderful place to live and a solid investment for the future.