Fast start could mean busy year for real estate
Phil Castle, The Business Times
The busy season hasn’t yet started in earnest, but the new year is off to a fast start for the Mesa County real estate market.
Increasing transactions and dollar volume through the first two months of 2017 could serve as a leading indicator for what follows.
“We’ve got to get ready. It’s going to be a busy year,” said Kevin Bray, development coordinator at Bray Real Estate in Grand Junction.
Annette Miller, senior vice president at Heritage Title Co. in Grand Junction, doesn’t expect gains to necessarily continue at the same pace, but does anticipate another year of growth for the market.
Miller said 265 real estate transactions worth a total of $61.3 million were reported in Mesa County during February. Compared to the same month last year, transactions rose 13.7 percent and dollar volume rose 3.9 percent.
Three large transactions accounted for a collective $11.3 million, Miller said, including the sales of a campground and RV park near Fruita for $4.7 million, the property where the American Furniture Warehouse outlet is located for $3.6 million and a former Subaru dealership for nearly $3 million.
The large transactions didn’t skew the overall number for dollar volume, though, because six sales worth a total of $14.6 million were reported in February 2016, Miller said.
Taking million-dollar deals out of the equation, dollar volume increased 12.6 percent.
For January and February, 543 transactions worth a combined $129.8 million were reported. Compared to the same two months in 2016, transactions increased 19.6 percent and dollar volume jumped 24.2 percent, Miller said.
Given those kind of gains, a good portion of the year-end increases for 2017 might come from the beginning of the year, she said.
For all of 2016, 4,592 transactions worth a total of more than $1 billion were reported. Compared to 2015, transactions increased 13.1 percent and dollar volume climbed 10.1 percent to pass the $1 billion milestone for the first time in eight years.
Annual real estate sales volume peaked in Mesa County in 2006 at $1.72 billion, bottomed out in 2011 at $585 million and has increased every year since then.
Bray said the busy season for real estate sales in Mesa County typically doesn’t start until March, making the gains in January and February a leading indicator of what could follow.
Bray said he’s especially encouraged by yet another increase — in new home construction.
Since the construction of one new home requires the equivalent of three full-time positions, increased residential construction brings jobs as well as economic stimulus to Mesa County, Bray said. “It’s certainly putting money back into the economy.”
The inventory of existing homes isn’t sufficient to keep pace with sales. But rising prices will bring more sellers and their homes to market, he said.
The median price of residential properties sold in Mesa County has increased 13 percent over the past year, Bray said. Still, prices haven’t returned to peak levels, leaving room for additional gains, he said.
Miller said low inventory levels could present a tail wind slowing market growth in part because sellers could encounter difficulty as buyers. The situation could require more creative planning, she said, such as buying a new home before selling the old one or renting an old home from new buyers until a new home can be purchased
Meanwhile, property foreclosure activity remains low in Mesa County.
Miller said 24 foreclosure filings and 36 foreclosure sales were reported in February. Compared to the same month last year, filings dropped 40 percent, although sales rose 24.1 percent in part because of additional homes sold by the Department of Housing and Urban Development.
For January and February, 59 filings and 63 sales were reported. Compared to the same two months last year, filings fell 36.6 percent and sales held steady.
The 50 resales of foreclosed properties so far in 2017 represented only 9.2 percent of all transactions, still below the
10 percent threshold Miller considers indicative of a healthy market.