Real estate outlook: Market has hit bottom
Annette Miller believes the real estate market in Mesa County has hit bottom, but a substantial rebound depends on improving labor conditions.
Miller, senior vice president of Heritage Title Co. in Grand Junction, monitors the real estate market in the county and said sales continue to track ahead of last year. That’s an indication the worst of the downturn likely is over, she added. “We really have found a foundation to start building from.”
While declining prices and record-low interest rates have created a strong buyers market, a turnaround also depends on strong labor demand, Miller said. “You’ve got to have a job to qualify for a loan.”
Miller said a total of 752 real estate sales were reported in Mesa County during the second quarter of this year, up
4.9 percent from the 717 sales during the second quarter last year. For the first half of 2010, a total of 1,295 sales were reported. That’s a 5.6 percent increase over the 1,226 sales reported in the first half of 2009.
Even if the current pace of real estate activity continues, though, a total of 2,600 sales in 2010 would rank lower than all but one of the previous 20 years. In contrast, annual sales topped 7,000 during the boom years of 2005 and 2006.
For 2010, the dollar volume of real estates sales increased slightly — up about 1 percent to $168.7 million in the second quarter and up 2.7 percent to $304.1 million for the first half over the same periods last year.
Six transactions over $1 million each bolstered second-quarter dollar volume. Those deals included the purchase by Laramie Energy II of more than 1,500 acres east of Collbran for $12.65 million, the purchase of a lot in a Grand Junction subdivision for $2.3 million and the purchase by Oldcastle SW Group doing business as United Companies of Mesa County of property along River Road in Grand Junction for nearly $1.5 million.
Most single-family home sales during the first half of 2010 — 335 — occurred in the price range of $200,000 to $300,000. Another 315 homes sales were reported in the range between $150,000 and $200,000.
According to statistics from the Grand Junction Area Realtor Association, the average sales price of a three-bedroom, single family home fell nearly 11 percent in the first half to $199,411 compared to the first half of 2009. The median sales price for those properties fell 10 percent to $185,300.
Increasing foreclosure activity in Mesa County has played a role in depressing prices, Miller said.
A total of 751 foreclosure filings were reported in Mesa County during the first half of 2010, up 71 percent from the 439 filings reported in the first half of 2009. Meanwhile, 483 foreclosure sales were reported in the first half of 2010, a nearly six-fold increase over the 85 sales during the first half of 2009.
In May, the foreclosure rate in Mesa County was the highest among the 12 most populous counties in Colorado.
Construction activity remains slow in Mesa County, although only slightly behind last year.
A total of 121 building permits for single-family homes were issued in Mesa County during the second quarter, bringing the total during the first half to 199. A total of 203 permits were issued during the first of 2009.
Just 13 commercial building permits were issued during the first half of 2010, half of the 26 permits issued during the same span last year.
Looking ahead to the remainder of 2010, Miller said declining prices and record-low interest rates have created a buyers market that’s likely to sustain sales and attract more bargain hunters.
But a significant rebound in the real estate market still depends on labor conditions, she added.
In June, the latest month for which estimates are available, the unemployment rate in Mesa County jumped eight-tenths to 9.7 percent. The latest jobless rate is the highest since peaking at 10.3 percent in March, but remains below the 10.2 percent posted at this time last year.
Over the past year, the number of people counted among the employed in Mesa County has dropped 3,237 to 71,022. But the number of people counted among those unsuccessfully looking for work also has decreased – 827 to 7,592.