Real estate update: Rebound in 2012 expected to continue in 2013.
Phil Castle, The Business Times
Michael Burkhard expects the increase in real estate activity that occurred in Mesa County in 2012 to continue in 2013.
“I think it’s going to move up in 2013. I’m excited for it anyway,” said Burkhard, a real estate agent with RE/MAX 4000 and chairman of the Grand Junction Area Realtors Association.
But even as historically low interest rates continue to attract buyers, shrinking inventory could present problems. Federal policies could affect the local market as well, Burkhard said.
Counting year-over-year gains in December, real estate transactions and the combined dollar volume of those sales both climbed to their highest levels since 2008, according to figures reported by Annette Miller, senior vice president of Heritage Title Co. in Grand Junction.
Miller said 279 sales worth a collective $63.9 million were reported in Mesa County in December. Compared to the same month last year, sales increased 5.2 percent and the dollar volume of those sales jumped 16.2 percent.
The dollar volume during December 2012 was bolstered by seven transactions over $1 million that accounted for a total of $13.6 million in sales. For December 2012, two transactions over $1 million resulted in a total of $5.2 million in sales.
The latest gain brings the total number of real estate transactions in Mesa County during 2012 to 3,444, Miller said. The combined dollar volume of those transactions totaled $681.2 million. Compared to 2011, the number of sales increased 12.7 percent and dollar volume rose 16.3 percent.
The year-end totals for 2012 were the highest for Mesa County since 2008, when 4,459 sales worth a combined $1.3 billion were reported.
Burkhard said the real estate market has yet to return to pre-recession levels, but has improved nonetheless. “We’re seeing really encouraging signs that we’re in the mode of recovery.”
Low interest rates have helped in attracting buyers and making monthly mortgage payments more affordable, he said. Until Congress passed last-minute legislation, the threat of the so-called fiscal cliff of higher taxes and automatic government spending cuts prompted some buyers to close on deals before the end of the year, he added.
But even as interest rates have dropped to historically low levels, so has the inventory of houses on the market, Burkhard said, with less than 800 active listings. Homes priced at under $200,000 have sold particularly quickly.
Burkhard said he hopes rising prices will bring more sellers to the market and increase inventory. “I’m hoping we see more of it come on.”
While new home construction has increased, it will take local builders a while to catch up to growing demand, he added.
On a larger scale, federal policies also could affect the local real estate market, Burkhard said. While Congress avoided the fiscal cliff, other problems remain.
Property foreclosure activity affects the real estate market as well.
For December, 66 foreclosure filings and 62 foreclosure sales were reported in Mesa County, Miller said. Compared to the same month last year, dropped more than 38 percent and sales fell 22.5 percent. Because of the time between filings and sales, the two don’t occur for an individual property in the same month.
For all of 2012, 1,251 foreclosure filings and 843 sales were reported, Miller said. Compared to 2011, filings increased 3 percent and sales decreased 9.5 percent.
The sales of foreclosed properties represented 23.3 percent of all transactions during 2012, down from almost 32 percent of transactions during 2011, Miller said.
In a good real estate market, the proportion of foreclosure sales to overall transactions remains below 10 percent, Miller said.