Real estate update: Sales up, but so are foreclosure filings
Phil Castle, The Business Times
Annette Miller sees signs of both encouragement and concern in the latest real estate statistics for Mesa County.
The number and dollar volume of real estates transactions continue to outpace last year. But property foreclosure filings have increased on a year-over-year basis for two straight months, jumping nearly 90 percent in March.
Even as real estate activity increases, sales of foreclosed properties delay the return to a more stable market and rising prices, said Miller, senior vice president of Heritage Title Co. in Grand Junction.
Kevin Borman, managing broker of Keller Williams Colorado West Realty and chairman of
the Grand Junction Area Realtors Association, agreed. He said demand has increased, especially for homes priced under $150,000, as the combination of lower prices and historically low interest rates strengthens buying power. But it still could be several years before home prices begin appreciating again.
Still, 2012 is off to a good start, Miller and Borman said. “It’s good to see we’re continuing to outpace last year,” Miller said. Added Borman: “It’s been a pretty good year. We’re seeing a lot of improvement.”
Miller said both real estate transactions and dollar volume increased in Mesa County in March compared to the same month last year. The 274 transactions constituted a more than 13 percent increase, while the nearly $55.6 million in dollar volume constituted a nearly 6.9 percent increase. Four transactions worth a collective $7.35 million bolstered dollar volume.
The March figures bring the total number of real estate transactions for the first quarter to 696, a 12.6 percent increase over the first quarter of 2011. The dollar volume of first-quarter real estate transactions totaled more than $132.8 million, a nearly 4.9 percent increase over last year, Miller said.
Borman said separate statistics compiled by the Grand Junction Area Realtors Association (GJARA) indicate there were a total of 377 sales in January and February, an increase of almost 32 percent over the same two months in 2011.
Borman said homes priced at below $150,000 have been “flying off the shelves.” Demand has been even stronger for homes priced at below $100,000, which have received offers above the listing prices, he said.
While homebuyers have led the surge, there’s been increasing interest from investors as well, he added.
The sale of foreclosed properties owned by the government and banks continues to constitute a large portion of overall transactions in Mesa County. Miller said there were 59 sales of foreclosed properties in March, almost 22 percent of the total.
Those transactions tend to pull down overall prices because foreclosed properties typically sell for less than comparable properties on the market.
According to GJARA statistics, though, the median sold price of residential property increased from $148,600 in January to $160,900 in February.
Miller said it’s necessary to work through the inventory of foreclosed properties before the real estate market fully recovers. The only question is how long that will take.
Foreclosure activity in Mesa County increased in March with 144 filings reported, an increase of 87 percent over the same month last year, Miller said. Another 87 foreclosure sales were reported in March 2011, down slightly from the 92 sales reported for the same month last year.
Foreclosure filings also increased on a year-over-year basis in February as Mesa County experienced the highest foreclosure rate among 12 metropolitan counties in Colorado.
For the first quarter, a total of 344 foreclosure filings were reported, an increase of almost 25 percent over the same span last year. Meanwhile, 230 foreclosure sales were reported, a decline of about 4 percent.
Miller said the increase in foreclosure filings over the past two months is likely a combination of foreclosures that had been delayed in processing and new defaults.
What’s less certain is whether the increase represents a short-term spike or longer-term trend, she said. “We’ve got to see how high that hump is going to get.”
Given declining unemployment rates and increasing labor demand in Mesa County, Miller said she’s hopeful the encouraging signs she sees in the real estate market continue even as the concerns diminish. “I would hope for more of the same, but watching the foreclosures trend back down.”