Real estate update: Latest figures reflect continued slowing in Mesa County sales
Joe Tripoli considers himself an optimist. So the Grand Junction real estate agent continues to look for opportunities in a market that, were it a glass, would be unequivocally half empty.
Tripoli, a broker associate with RE/Max 4000 who serves as the new chairman of the Grand Junction Area Realtors Association, expects what he describes as a “sawtooth” recovery with lots of ups and downs in the Mesa County market rather than a more straightforward V-shaped rebound. But he also insists that hard work still pays off, both now and in the future. “You’ve got to be planting seeds, working hard and networking,” he says. “It’s definitely work hard.”
But even hard-working agents face a challenge in market where the latest statistics reflect declining sales. According to figures compiled by Annette Miller, senior vice president of Heritage Title Co. in Grand Junction, real estate transactions in Mesa County declined 23 percent during the third quarter of 2010 compared to the same quarter in 2009. Through nine months of 2010, sales now lag 5 percent behind the pace set last year.
Like Tripoli, Miller doesn’t expect the trend to significantly change anytime soon. “It’s going to be this way for a while,” Miller says.
According to Miller, 602 real estate transactions were reported in Mesa County during the third quarter, down 23 percent from the 772 sales reported in the same quarter last year.
The combined dollar volume of real estate sales totaled $143.4 million in the third quarter of 2010, down 22 percent from the $182.7 million in sales in the third quarter of 2009.
Eight transactions over $1 million helped bolster the dollar volume for the third quarter of 2010. The large deals included the sale of more than 300 acres of industrial vacant lots to CAM-Colorado LLC for $4.5 million, the sale of an office building to C. Sanchez II LLC for $4 million and the conveyance of industrial property to Wells Fargo Bank for $3.51 million.
Through nine months of 2010, a total of 1,897 real estate transactions were reported in Mesa County, a 5 percent decline from the 1,998 sales reported in the same span in 2009.
If the current pace of real estate sales continues through the end of the year, about 2,530 transactions will completed. That’s the lowest level in more than 20 years.
In contrast, the annual number of real estate transactions in Mesa County peaked at 7,198 in 2005 and was only lightly lower at 7,179 in 2006.
The combined dollar volume for real estate transactions through nine months of 2010 totaled $447.5 million, a decrease of 6 percent from the $478.6 million in sales reported for the same span in 2009.
Through the third quarter of 2010, about half of transactions occurred in the price range between $120,000 and $200,000.
Miller says an income tax credit of up to $8,000 for qualified homebuyers helped bolster real estate sales early in 2010. Real estate activity increased in the first quarter compared to the same span last year — the first such increase since 2006.
Sales and dollar volume continued to track ahead of last year through the second quarter. But the third-quarter decline pulled real estate activity back below levels of a year ago.
The growing number of foreclosed properties continues to add inventory to the market and bring down home prices. Miller says 1,126 foreclosure filings were reported in Mesa County through the first nine months of the year, a 34 percent increase over the same span last year. Through the third quarter, 760 foreclosures had been completed.
Miller says 26 percent of real estate transactions during the first nine months of 2010 involved bank- and lender-owned properties.
It’s too early to tell whether or not a freeze on foreclosures by lending mortgage lenders will have an effect on the Mesa County market — or to what extent — Miller says. A delay could slow further additions to the housing inventory and help the market clear some of that inventory. But there also are concerns that buyers could have misgivings about the legitimacy of the foreclosure process.
Meanwhile, financing activity for real estate continues to decline in Mesa County.
According to Miller, a total of 1,953 real estate-secure loans were reported for the third quarter, down 16 percent from the 2,334 loans reported for the same quarter last year. Through nine months of 2010, 5,279 real estate-secured loans were reported, a 43 percent drop from the 9,212 loans reported in the same span in 2009.
Residential construction activity also has slowed. Miller says 84 building permits were issued for single-family homes in Mesa County in the third quarter, a 21 percent decrease from the 107 permits issued in the same quarter last year. Year to date, 283 permits were issued, a decrease of 9 percent from the 310 permits issued in the same span in 2009.
Miller says uncertainty continues to hamper the real estate market — uncertainty over jobs, the economy and the outcome of the upcoming election.
Tripoli says he doesn’t expect a substantial increase in real estate activity until unemployment rates drop and more people feel secure in making a large investment in a home. “I think it’s jobs. People have got to feel confident to where their income is coming from.”
Even in the midst of slowing real estate activity, though, Tripoli looks for opportunities. Given the increased inventory, reduced prices and historically low mortgage rates, he says buyers have a lot more choices and will pay less both in terms of prices and financing costs.
Tripoli also believes that hard work continues to pay off in the real estate business — if not immediately, then in positioning agents to enjoy a larger market share when conditions improve.