Phil Castle, Business Times

Real estate activity continues to slow in Mesa County as a combination of rising mortgage interest rates and home prices affect affordability

Robert Bray, chief executive officer of Bray & Co. Real Estate in Grand Junction,  described the change as a shift from a hot seller’s market to more of a lukewarm seller’s market. “It’s moving back to more balance in the marketplace.”

The overall market remains healthy, Bray said.

Annette Young, administrative coordinator at Heritage Title Co. in Grand Junction, said the outlook depends in part on the possibility of recession. But unlike typical recessions, the labor market remains strong and property values keep rising, Young said. “Those two things are a little different this go around.”

Young said 371 real estate transactions worth a total of $164.9 million were reported in Mesa County in September. Compared to the same month last year, transactions declined 27.2 percent and dollar volume fell 19.6 percent.

Ten large transactions accounted for a total of $24.2 million, Young said, including the sales of the building housing Tractor Supply for nearly $5.9 million, a medical facility for $3.4 million and an industrial shop and office for more than $2 million.

Through the first three quarters of 2022, 3,856 transactions worth a total of nearly $1.7 billion were reported. Compared to the same span in 2021, transactions fell 18.1 percent and dollar volume decreased 2.7 percent.

The comparison isn’t entirely fair given the record-setting pace in 2021. But the latest numbers also reflect the effects of higher interest rates and prices, Young said. “It’s just kind of a sign of the times.”

According to numbers Bray & Co. tracks for the residential market in Mesa County, 279 transactions worth a total of more than $123.5 million were reported in September. Compared to the same month last year, transactions fell 25.6 percent and dollar volume decreased 12.8 percent.

Through the first three quarters of 2022, 2,628 transactions worth a total of more than $1.1 billion were reported. Compared to the same span in 2021, transactions decreased 16.6 percent and dollar volume retreated 1.9 percent.

Bray said the market is moving toward an equilibrium and a more even playing field for buyers and sellers.

The slower pace of sales has bolstered residential inventories. As of the end of September, there were 594 active listings in Mesa County. That’s an increase of 35.6 percent from a year ago and what Bray said was a return to levels last seen in early 2020 before the onset of the COVID-19 pandemic.

New home construction continues to lag, Bray said, as builders face economic uncertainty, higher materials costs and fewer lots upon which to build. Through the first three quarters of 2022, 608 building permits were issued for single family homes in Mesa County. That’s down 16.4 percent from the same span in 2021.

Home prices keep increasing, though. The median price of homes sold during the first three quarters of 2022 climbed on a year-over-year basis 19.3 percent to $389,000. 

Bray said he expects the pace of appreciation to slow to low double digits by the end of the year and some asking prices will come down. Overall, though, prices will continue going up.

Property foreclosure activity continues to increase. Through the first three quarters of 2022, 188 foreclosure filings and 39 sales were reported. That contrasts with 21 filings and 15 sales for the same period in 2021.

Young said foreclosure activity hasn’t yet reached a worrisome level, but could. Bray agreed. “That’s something to keep an eye on.”