Mesa County real estate activity rises, but outlook uncertain
Phil Castle, The Business Times
Michael Burkhard feels encouraged by increasing real estate activity in Mesa County through the first half of 2013, yet remains apprehensive about what could happen during the second half. He’s worried rising interest rates and regulatory changes could slow what’s been steady improvement in the local market.
“There’s still a lot of variables out there that are unknown,” said Burkhard, a real estate agent with RE/MAX 4000 and chairman of the Grand Junction Area Realtors Association.
Annette Miller, senior vice president of Heritage Title Co. in Grand Junction and a long-time observer of real estate trends, agrees. “There are obvious things that could affect the market right now.”
For now, however, the news is decidedly upbeat.
Large year-over-year gains in real estate transactions and dollar volume in June bolstered first half numbers. Year-to-date drops in filings and sales continue to reflect declining foreclosure activity.
Miller said 348 real estate transactions worth a combined $73.3 million were reported in Mesa County in June. Compared to the same month last year, transactions jumped 12.6 percent and dollar volume climbed 23.7 percent. On a proportional basis, those gains are the largest for a single month since November.
While two transactions accounted for a total of $5.39 million in June, sales of higher-priced homes also bolstered dollar volume, Miller said.
The median sales price of homes listed on the Multiple Listing Service for June was $180,000, she said The June numbers bring total real estate activity in Mesa County through the first half to 2013 to 1,725 transactions worth a collective $347.2 million. Compared to the first half of 2012, transactions increased 5.5 percent and dollar volume increased 9.3 percent.
If the current pace of real estate activity were to continue through the second half of the year, 2013 would end with 3,450 transactions worth a total of $694.4 million. If realized, those annual numbers would be the highest for Mesa County since 2008.
It’s uncertain, though, whether or not the current pace of real estate activity will continue through the second half of 2013.
“I think we’ll hold steady depending on where the interest rates are going to go,” Burkhard said.
Rising mortgage interest rates and new regulations requiring mortgage insurance for the life of loans without a 20 percent downpayment could reduce the buying power of potential homeowners and in turn, real estate activity, he said.
Miller said regulations also impose increased scrutiny on the ability of borrowers to repay their mortgages. And labor conditions constitute yet another factor affecting the real estate market, she added.
The exact extent of foreclosed properties that have yet to come on the market remains uncertain as well, Burkhard and Miller said.
It’s clear, however, that foreclosure activity continues to slow in Mesa County.
Miller said 61 foreclosure filings and 50 foreclosure sales were reported in June. Compared to the same month last year, filings dropped 56.4 percent, although sales edged up 8.7 percent. Because of the time between filings and sales, the two don’t occur for an individual property in the same month.
For the first half of 2013, 375 foreclosure filings and 354 sales were reported. Compared to the first half of 2012, filings tumbled 45.3 percent and sales retreated 16.3 percent.
Through the first half of 2013, sales of foreclosed properties constituted 21 percent of all real estate transactions, down from 25.6 percent during the first half of 2012, Miller said.