Third Quarter Stats, Durango Colorado and La Plata County

The latest statistics of the Durango Area Association of REALTORS® were released for third quarter 2011.  Because our county has too few sales to draw conclusions from for each quarter we published the nine month period (YTD), January -September 2011, as compared to the same period for the previous three years on the first page.

As an overview, the La Plata County residential real estate market has continued to recover from the bottom of the market, which was September 2009. The residential real estate sales for the nine months thru 2011 totaled 528 transactions with a median price of $308,000 compared to the same period in 2009, which was 386 transactions and a median price of $292,500. As compared to the same period last year, the La Plata County residential transactions were up 10.46%, with the median price up .67%, the Durango In Town residential transactions were up 9.88%, with a 4.13% increase in the median price, and total Bayfield residential transactions were up 27.9%, but the median price fell 5.46%. The number of land sales improved 45.2% over last year, with a 21.7% increase in median price, and the commercial transactions increased 45.4%, with a median price increase of 20.4%.

Although this is encouraging news on the market, the number of transactions is still approximately 1/2 of the number of sales in the top of the market, which was 2005, and still lower than the numbers for 2008 (same nine months). Prices continue to be challenged in the market place due to the excessive inventory of properties for sale, and by distressed properties that are offered below market value.  In October I calculated 10% of all La Plata County sales were bank owned.  This is WAY better than what appears in the National Association of Realtors November confidence survey which the advance report released this morning-across the US Realtor sales were 19% foreclosed.

I like to flip past the quarter statistics to p 19-YTD comparisons and then the graphs past that-they show a truer picture of our market.  Most categories have increases in number of sales.  That is about what I expected to see.  We are on our way out of the housing slowdown, but it will be a very slow recovery.  I still expect each year, save a major new disastrous policy change in Congress, to be about 10% increase in # sales.  This recovery is not being seen in the condo market yet.  There is still difficulty with financing loans on condos, there are many distressed properties in this category, and the matter could potentially be made worse depending on the next year’s actions by Congress.

Two pending national issues are the Mortgage Interest Deduction, which has been a cornerstone of US code for almost 100 years and which there is a strong fight to take away, plus a push for upping the down payment from 3.5% to 20% for FHA loans.  The down payment issue would be devastating in our county and both issues are being fought hard on both sides-my trade association NAR is in the thick of it fighting to protect home buyers and sellers across the US .  I’d be happy to explain further to you if you want to call.

As always, I look forward to hearing from you and feel free to comment here.    If you would like any further explanation of the statistics or the market I can always be reached at (970) 946-0740.

Click HERE for the statistics.

Durango #1 Again

I wanted to share something in the downtown newsletter:  POLICOM Corporation has released its 2011 Economic Strength Rankings and of the 576 “Micropolitan” statistical areas (populations of less than 50,000) in the U.S., Durango was at the top. The rankings reflect the areas that have the best economic foundation. According to POLICOM, while many communities have slowed or declined during this recession, the strongest areas, like Durango, have been able to weather the storm. The POLICOM study measured 23 economic factors over 20 years to create the rankings.  The full POLICOM report can be found on their website

Now let’s add more green jobs to the mix for long term diversity!

What is a Feed-In-Tariff? /The Path to Ending Nuclear Power in Germany

Last Sunday I had dinner with Christine Kamm, a member of the Bavarian Parliament from Augsburg who is the speaker on European issues for the Green Party State Parliament faction in the region Schwabia.  She works on energy and transportation policy and you can tell in conversation she’s very anti-nuclear.  She told me about the recent decision in Germany to shut down the last of their nuclear plants.

Germany itself is pretty anti-nuclear.  To the already aware public Fukushima was the last straw.  Even the conservative German Christian party realized it was unrealistic politically to continue a pro-nuclear stance because of the amount of votes that would be lost.  Germany made a decision to stop with nuclear altogether-they’ve already shut down eight plants, and the rest will be shut off by 2022.  It’s a very ambitious goal.

Germany does strongly support renewable power.  There is a feed-in tariff (FIT) there which rewards homeowners and companies for becoming their own power makers in renewable energy-whether wind, water, solar, biomass, or biogas.  Because it covers all renewables, the base load created comes from a variety of sources.  Germany makes the incentive high enough to actually incentivize getting to the goals in renewable they want to achieve. The incentives provide a predictable stream of income to the project – this future income can be used to get investment money for the project-from banks, farmers, or whoever makes up the money and product source. The German Development Bank also offer low-interest loans. The larger the system you install with the feed-in-tariff the less you get from the government because you make it up in the size of your system.

To give some background, after WWII Germany rebuilt their industries and the utilities grew to be extremely centralized into the four major utilities that exist.  The reason and goal for the FIT  was to decentralize electricity production.  All four of the big utility companies own some nuclear and other energy to sell, so mandating a closure on nuclear will not close any of the companies down.

Getting back to how Germany’s FIT works, the actual electric grids are owned by separate companies than the utilities.  If a homeowner puts up PV (photovoltaic) on their roof or a company builds a wind farm, the grid operators are required to hook you to the grid.

Renewable energy also receives dispatch priority. Some people argue that in a FIT the little guy pays for inefficient plants because the cost to consumers goes up, but if the power source isn’t delivering what it is supposed to it’s not rewarded. The funds for the FIT payments are distributed among all electricity consumers. With a FIT you are getting money for every watt you produce-not just the excess so in a small system you’d use it for your home and you get money for that too.  There are isolated FITS in America like in Gainsville, FL, as well as movements across the country to see if the idea can take hold here.

What are the goals Germany has set for renewables? There was a Renewable Energy Law passed in the EU which requires at least 20% of electric to come from renewable sources by 2020.  Germany’s version is called the EEG, and its renewable electricity goal for 2020 is 35%.  Germany already gets over 17% of its electricity from renewables; their 2050 goal is 80% renewables.  Non-renewables will not be replaced by wind and solar alone-it wouldn’t be practical to think it would in Germany; biomass and biogas and geothermal need to be part of the mix to reach the targets.

The ambitious targets were set before Fukushima and Germany’s ending nuclear all together.  So far they haven’t replaced the targets.  Unless they are changed to lower numbers, replacing all the nuclear power quickly will be hard while still trying for the 35%/80% renewable goals.  There are a lot of unknowns and a lot of moving parts.  Is nuclear to be replaced by non-renewables?

To give you an idea of costs, in the EU solar per kw hour is the same price as wind off-shore-the biggest of the facilities-and some of these will definitely help replace nuclear.  8.5% electric power in Bavaria is biomass and 10% in Germany overall.

One thing is for sure, as I rode around Bavaria and saw rooftop solar on almost every other home-renewable energy is here to stay in Germany.

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