<\/p>\n
A recent decline in real estate transactions has some La Plata County brokers questioning whether the residential sales slump in October has anything to do with the mine spill that occurred north of the city this past summer, polluting multiple regional watersheds.<\/p>\n
\u201cI guarantee there is something to be said for that,\u201d said Jerome Bleger, board president of the Durango Area Association of Realtors.<\/p>\n
On Aug. 5, a breach at the portal of the abandoned, Silverton-based mine sent about 3 million gallons of heavy metal-laden sludge into the Animas River. The vibrant orange coloring didn\u2019t last, but the implications did, which spelled disaster mainly for farmers afraid to irrigate with the water and those in the rafting and water sports industry. However, local real estate agents weren\u2019t worried when contacted by The Durango Herald in the weeks after the spill. Few expected any long-term effects from the incident and reported buyer interest was as strong as ever.<\/p>\n
But last week, the Herald published a column by The Wells Group broker Don Ricedorff, who speculated about connections between the spill and comparatively low residential sales in October.<\/p>\n
The month of October took La Plata County\u2019s residential sales off its nine-month track for best year since 2006. The month\u2019s transactions lag behind those reported in October 2014 and declined by 42.7 percent for homes less than $500,000. Due to the 45-60 day duration of contracts, October was the indicative month in relation to spill impacts, Ricedorff argued.<\/p>\n
In October 2015 compared to October 2014, sales in Denver were down three percent and 11.5 percent in Grand Junction.<\/p>\n
\u201cThat\u2019s a significant mark, but when we look at the Durango area, I think it still makes the case that it was beyond what was happening in other markets,\u201d Ricedorff said.<\/p>\n
If, in fact, there is some correlation, it\u2019s too early to tell, but the anecdotal evidence suggests the blowout is a potential and at least partial explanation. A broker employed with Coldwell Banker reportedly encountered some interested buyers this past summer, agent Gina Piccoli said. After the spill, they said \u201cno thanks\u201d to Durango.<\/p>\n
But the waters become muddled when factoring in the stock market plunge, paired with the natural gas industry\u2019s decline and other components. Fort Lewis College Professor of Economics Tino Sonora believes the macroeconomic elements are far more significant than the Gold King incident alone.<\/p>\n
\u201c(The spill) got some bad press, and the people on the ground have a better sense, but I don\u2019t know,\u201d Sonora said. \u201cThe spill itself might not be a big factor, but what might play into the market more is the potential for other spills. There are many more mines around (Silverton) that are so much more questionable. I think this particular episode has zero impact.\u201d<\/p>\n
A downturn in transactions as the year ends is typical for the area, and the Durango Area Association of Realtors actually reports sales trending upward for the year to date.<\/p>\n
\u201cI suspect part of it is the seasonal fluctuation,\u201d Sonora said. \u201cBut until we have more data, I don\u2019t think you can make an inference.\u201d<\/p>\n
Heather Erb, who heads the sales team at Durango Mountain Realty, said most of the company\u2019s business is with second-home buyers from out-of-state, many from Arizona and Texas.<\/p>\n
\u201cI thought that might be the case, but we\u2019re not hearing about it up in the resort area,\u201d Erb said. Durango Mountain Realty is down only five sales in October compared to last year, she said.<\/p>\n
\u201cIn the whole office with all our business, we had a couple people call and ask questions. They were more curious than anything. The stock market probably has more to do with it.\u201d<\/p>\n
Still, transaction numbers cannot account for all the potential buyers who might have crossed Durango off their list after the river temporarily flowed orange. And if past environmental mishaps are any indication, the spill, or at least the stigma attached to it, could certainly have impacted sales. The catastrophic Missionary Ridge fire of 2002, for example, shook the market that summer.<\/p>\n
The chances of long-term market impacts are very slim, industry officials agreed, but questions linger around Gold King nevertheless. \u201cOnce the spring runoff happens and (the sediment) gets stirred up again \u2026 this topic is not going away,\u201d Bleger said. \u201cWe haven\u2019t heard the last of it.\u201d<\/p>\n