VALUES: House prices, slumping after a five year boom, are projected to decline in half of the nation's metropolitan areas, with the Northeast, Florida and California among the areas hardest hit. This forecast is made by Moody'sEconomy.com, a private research firm. Moody's projects that the median sales price for an existing home will decline in 2007 by 3.6%, which would be the first decline for an entire year since the 1930's.
The report projects that 133 of the nation's 279 metropolitan areas would sustain price declines. This is quite a contrast from the last five years when low mortgage rates pushed sales to five consecutive annual records and prices in the hottest sales areas skyrocketed.
How does this affect our Durango market? As we've previously posted, much of our real estate economy is driven by 2nd home buyers, retirees and/or investors; a significant percentage coming from California, Arizona, Florida and Las Vegas. The areas have already experienced sales volume and price declines. As these markets slow and turn down the number of potential buyers of Durango properties will decline. Our market will slow (as we're already seeing.) Will our home prices decline? We think not significantly but we certainly will not see the value escalations as in recent years.
Look back at our October 2 post. Many consumers are migrating from the metropolitan areas to smaller communities and Durango is America's #3 "dreamtown."
http://HomesInDurango.com / http://DurangoRealEstate.biz
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