Phil Castle, Business Times

Real estate activity continues to slow in Mesa County even as interest rates rise and uncertainty mounts over a midterm election and possible recession.

Annette Young, the administrative coordinator at Heritage Title Co. who’s long tracked the market, said local trends are similar to what’s happening elsewhere. “I think it’s kind of expected when you see what’s going on at a national level.”

Although the number of transactions and combined dollar volume in Mesa County have dropped compared to a record breaking 2021, the market also shows some signs of resiliency, said Robert Bray, chief executive officer of Bray & Co. Real Estate in Grand Junction. “The strength of the market is still surprising.”

Young said 339 transactions worth a total of $144.3 million were reported in Mesa County in October. Compared to the same month last year, transactions decreased 29.4 percent and dollar volume dropped 29.3 percent. While nine large transactions worth a collective $24.5 million bolstered dollar volume in October 2022, 18 transactions accounted for a total of $50 million a year ago.

Through the first 10 months of 2022, 4,195 transactions worth a total of nearly $1.83 billion were reported. Compared to the same span in 2021, transactions decreased 19.2 percent and dollar volume fell 5.5 percent.

Young and Bray said the trends reflect the rising interest rates on mortgages that have followed government efforts to curb inflation. Bray said the “trifecta” of factors affecting real estate activity also includes expectations of recession and the uncertainty that comes with an election.

According to numbers Bray & Co. tracks for the residential market in Mesa County, 249 transactions worth a total of more than $99.5 million were reported in October. Compared to the same month last year, transactions fell 21 percent and dollar volume declined 13.6 percent.

Through the first 10 months of 2022, 2,883 residential transactions worth a total of nearly $1.23 billion were reported. Compared to the same span in 2021, transactions fell 16.8 percent and dollar volume decreased 2.8 percent.

The good news, Bray said, is the slower pace of sales has bolstered inventory and in turn selection for buyers. At of the end of October, there were 602 active listings in Mesa County. That’s up 53.6 percent from the 392 listings a year ago.

New home construction continues to lag behind last year, however, as higher interest rates and the costs of labor and materials slow building, he said. Through the first 10 months of 2022, 645 building permits for single-family homes were issued in Mesa County. That’s down 18.7 percent from the same span in 2021.

Despite the slowdown in sales, home prices continue to rise. The median price of homes sold through the first 10 months of 2022  rose 18 percent on a year-over-year basis to $385,900.

It’s a seller’s market, Bray said, with more than 98 percent of homes sold receiving list price.

Looking ahead, Bray said he expects real estate activity to continue to trend down and end the year below 2021. Prices could continue to rise, but at a slower pace.

But the downturn is different than past shifts, he said. There’s still a shortage of housing and the labor market remains strong.

Property foreclosure activity continues to increase in Mesa County, Young said. Through the first 10 months of 2022, 208 foreclosure filings and 41 sales were reported. That contrasts with 22 filings and 18 sales for the same period in 2021.

Foreclosure activity has increased in part because forbearance measures are no longer in place. But activity hasn’t yet reached a worrisome level, she said.