Mesa County real estate outlook remains upbeat
Phil Castle, The Business Times
Despite some slowing in June, real estate activity in Mesa County during the first half of 2012 outpaced last year with increased sales and dollar volume.
With a few caveats, continued improvement is expected for the remainder of the year.
“We’re seeing definite improvement — not total recovery by any means, but definite improvement,” said Kevin Borman, managing broker of Keller Williams Colorado West Realty and chairman of the Grand Junction Area Realtors Association.
Robert Bray, president of Bray Real Estate in Grand Junction, agreed.
“I’m still optimistic for the latter half of the year.”
Annette Miller, senior vice president at Heritage Title Co. in Grand Junction and a long-time observer of the local real estate industry, concurred as well. “I’m hoping to see the continued trend.”
Bad economic news could affect the market, as could uncertainty associated with the upcoming presidential election. High unemployment rates and low wages also pose obstacles to a more robust real estate market. And a growing number of property foreclosure filings constitutes a leading indicator of what could be more foreclosure sales.
Overall, though, the outlook remains upbeat. Said Borman: “We’re definitely seeing improvement in just about every category.”
For June, Miller said 309 real estate transactions worth a combined $59.25 million were reported in Mesa County. Compared to the same month last year, transactions slipped 2.5 percent and dollar volume slid 9.7 percent.
Miller said the small difference in transactions — just eight — was inconsequential. “”There are so close in there I don’t see any concern.”
She attributed the difference in dollar volume in part to four large transactions reported in June 2011 worth a total of $11.59 million.
Three transactions involving more than $1 million were reported in June 2012 and were worth a total of $6.52 million.
Despite slowing in June, real estate transactions and dollar volume were up for the first half of 2012, Miller said, with 1,635 sales worth a combined $317.8 million.
Compared to the same span in 2011, sales increased 11 percent and dollar volume grew 8.1 percent.
“That is very good activity,” Miller said.
At the current rate, 2012 remains on pace for 3,270 real estate transactions worth a total of nearly $636 million. If realized, those numbers would be the highest since 2008, yet only about half of those in 2007.
Borman and Bray both said they expect year-over-year gains in real estate sales and dollar volume to continue through 2012, although problems still could arise.
Lenders and appraisers remain conservative in extending credit and pricing property, Borman said, which in turn affects potential buyers.
Bray said bad economic news could affect sales. And the presidential election could serve as a distraction that prompts some people to postpone a purchase.
High unemployment rates and low wages continue to affect the ability of some people to buy homes, Bray added.
At the same time, though, mortgage interest rates likely will remain near historic lows, making homes more affordable and stimulating sales, Borman and Bray said.
Demand and selling prices have increased, particularly on the lower end of the market. Borman said homes priced below $150,000 often draw multiple offers for more than the list price. The shrinking inventory of houses priced at that level has created a seller’s market, he added.
Meanwhile, property foreclosure filings continue to increase in Mesa County.
For June, 140 filings were reported, Miller said, nearly double the 74 filings reported in the same month last year.
However, the 46 foreclosure sales reported in June 2012 constituted a nearly 37 percent drop from June 2011, she said.
What’s more, 67 foreclosure filings were withdrawn in June 2012, a reflection in part of so-called short sales and loan modifications, she added.
Through the first half of the year, 686 foreclosure filings and 400 sales were reported in Mesa County. Compared to the same span last year, filings increased nearly 31 percent even as sales decreased almost 17 percent.
The ratio of resales of foreclosed properties to overall real estate transactions continues to drop, Miller said. Since foreclosed properties typically sell for less than other, comparable properties on the market, fewer foreclosure sales exert less downward pressure on prices.
The increase in filings portends more property moving through the foreclosure process, although it’s uncertain how much of that property will actually be sold or exactly when, she said.
As for the overall outlook for real estate in Mesa County, Borman said it’s clear the market has rebounded from the bottom in 2009. What’s less clear going forward is how much conditions will improve and how quickly as increases in sales and dollar volume continue to trend upward, he said. “I hope it’s not a long shelf.”