Mesa County real estate market expected to stabilize in 2012
Phil Castle, The Business Times:
Based on the statistics and trends she observed in 2011, Annette Miller expects the Mesa County real estate market to stabilize in 2012.
As the inventory of foreclosed properties shrinks and accounts for a smaller proportion of overall sales, what’s been a decline in prices should stop. Historically low interest rates should spur sales as well, said Miller, senior vice president of Heritage Title Co. in Grand Junction.
Miller reported that 266 real estate transactions worth a combined $52.1 million were recorded in Mesa County in December. Compared to same month last year, transactions were up 11.3 percent, but the dollar volume of those transactions slipped 2.2 percent.
The December figures bring total real estate statistics for 2011 to 3,066 transactions worth a collective $541.8 million.
Compared to 2010, transactions increased nearly 15.4 percent, ending a downward trend going back to 2006. Still, 2011 transactions remain less than half the nearly 7,200 sales reported in the peak year of 2005.
The dollar volume of transactions continued to decline on a year-over-year basis in 2011, falling 6.6 percent.
Miller attributed part of the difference in dollar volume to the sale of 422 properties owned by the Department of Housing and Urban Development in 2011 for which prices weren’t disclosed on recorded deeds. There were 144 HUD sales in 2010.
Moreover, an increase in the number of foreclosed properties sold by banks and the government was a factor. Those transactions tend to pull down overall prices because foreclosed properties typically sell for less than comparable properties on the market. A total of 969 sales involved bank- and government-owned properties in 2011, nearly 37 percent of all transactions. Last year, 555 bank- and government-owned properties were sold, 22 percent of all transactions.
At the same time, though, foreclosure activity is slowing in Mesa County, Miller said.
For December, 106 foreclosure filings and 80 sales were reported.
Filings fell 17 percent compared to the same month last year, although sales rose 23 percent.
Filings constitute the beginning of the foreclosure process, while sales come at the end. Because of the time in between, both a filing and sale for a given property doesn’t occur in the same month.
For all of 2011, 1,215 filings and 933 sales were reported. Filings dropped more than 23 percent from 2010, a peak year in Mesa County over the past decade. Sales held steady.
Since filings constitute a leading indicator of foreclosure activity, Miller sees the downward trend as a promising sign of fewer sales in 2012 and a more stable real estate market.
As fewer real estate sales involve foreclosed property, more sales will involve transactions between private sellers and buyers, she said. And that’s good for the economy in stabilizing prices and involving more local real estate agents and title companies in the process, she added.
Historically low interest rates are expected to continue through 2012 and further bolster the real estate market, Miller said.