Real estate update: Sales steady, dollar volume down
Robert Bray considers himself “cautiously optimistic” about the Mesa County real estate market.
By one measure, the number of residential real estate transactions reported in the county during the first half of 2011 was up 28 percent compared to the first half of 2010.
“Most of the low-end stuff is seeing tremendous activity,” said Bray, president of Bray Real Estate in Grand Junction.
But at the same time, the dollar volume of real estate transactions decreased during the first half of 2011 compared to 2010 as foreclosure activity continued to drive down prices.
While foreclosure activity is slowing, high unemployment rates remain a concern, Bray said. “I’m cautiously optimistic about the remaining half of the year, but our economy still needs jobs for our housing market to stabilize.”
Annette Miller, senior vice president of Heritage Title Co. in Grand Junction and a long-time observer of the industry, said she expects little significant change in the market until the inventory of foreclosed properties shrinks and jobless rates retreat.
According to statistics compiled by Miller, a total of 1,283 residential and commercial real estate transactions worth a combined $270.3 million were reported in Mesa County during the first half of 2011.
The overall number of sales was down only about 1 percent from the 1,295 sales reported during the first half of 2010. Dollar volume, however, was down 11 percent from the $304.1 million in sales in the first half of last year.
Bray Real Estate tracks a slightly different measure of the market — residential properties included on the Grand Junction Area Realtor Association (GJARA) multiple listing service.
According to those figures, 1,100 residential properties were sold in Mesa County during the first half of 2011, up
28 percent from the 861 properties sold during the first half of 2010.
The inventory of 1,378 current active listings on June 30 is down 28 percent from the 1,906 listings reported at the end of the first half of 2010. At the pace of 255 home sales in June 2011, the inventory would last only about 5.4 months, compared to 14 months at this time last year, Bray said.
Real estate sales volume continues to drop, however.
Miller attributed said the overall drop in dollar volume in part to the effects of large real estate transactions. The first half of 2010 included the purchase by Laramie Energy II of more than 1,500 acres east of Collbran for $12.65 million. The largest deal during the first half of 2011 was the purchase by Summit Materials of various assets of Grand Junction Pipe & Supply for $6.4 million.
There were 16 sales for more than $1 million each during the first half of 2011 compared to 20 such transactions during the same span last year.
At the same time, though, residential home prices also have dropped. According to statistics from GJARA, the average sales price of a residential property in Mesa County during the first half of 2011 fell to $187,229, down 11.8 percent from the first half of 2011. The median sales price for residential property dropped 14.4 percent to $162,500.
For the first half of 2011, most single-family home sales — 323 — occurred in the price range of $150,000 to $200,000. Another 269 sales were reported in the range between $200,000 and $300,000, Miller said.
Bray said 67 percent of residential sales during the first half of 2011 involved homes priced under $200,000, while fully 89 percent involved homes priced under $300,000.
With long-term interest rates still below 5 percent, it’s a great time to buy, Bray said, but a challenging time for sellers unwilling to lower prices. Some sellers are pulling their properties off the market and renting them instead.
Property foreclosure activity has played a role in depressing prices since foreclosed properties tend to sell for less than comparable properties on the market. Foreclosure activity in Mesa County is slowing, though.
Miller said 561 foreclosure filings were reported during the first half of 2011, down about 25 percent from filings reported during the first half of 2010. At the same time, though, 499 confirmation deeds were recorded at the completion of foreclosures during the first half of 2011, up 3 percent from last year. Filings constitute the beginning of the foreclosure process and a leading indicator of subsequent foreclosure sales.
Residential construction activity in Mesa County continues to slow as well. A total of 143 building permits for single-family homes was issued during the first half of 2011, down about 28 percent from the 199 permits issued during the same span last year. Just 14 commercial building permits were issued during the first six months of 2011, one more than last year.
The volume of real estate-secured loans issued in Mesa County held steady during the first half of 2011 at 3,312, two more than the same span last year.
Looking ahead to the remainder of 2011, Miller said she doesn’t expect any substantial changes in real estate activity until the inventory of foreclosed properties is exhausted and labor conditions improve.
In June, the latest month for which estimates are available, the unemployment rate in Mesa County edged up a tenth to 9.9 percent.