Trends continue to point to improving real estate conditions
Phil Castle, The Business Times
Increasing real estate activity and decreasing property foreclosure activity continue to point to improving conditions in Mesa County.
“We keep trudging that way, and it’s really great to see,” said Annette Miller, vice president of Heritage Title Co. in Grand Junction.
Michael Burkhard, a real estate agent with RE/MAX 4000 and chairman of the Grand Junction Area Realtors Association, remains upbeat overall.
But he’s also worried regulatory changes and rising interest rates could curb the buying power of some people shopping for homes.
Miller said 360 real estate transactions worth a combined $72.4 million were reported in Mesa County in May. Compared to the same month last year, transactions increased 6.8 percent and dollar volume increased 8.9 percent.
Four large transactions worth a total of almost $5.4 million accounted for some of the increase in the dollar volume, but so did rising prices, Miller said.
The May numbers bring total real estate activity in Mesa County through the first five months of the year to 1,377 transactions worth a collective $274.2 million.
Compared to the same span in 2012, transactions increased 3.8 percent and dollar volume rose 6 percent.
Miller said she expects slow, but steady, growth in the real estate market to continue through this year as historically low interest rates continue to drive demand.
Burkhard said he expects modest increases in sales and dollar volume as low inventory levels push up prices, particularly in the lower ranges.
According to the latest results of monthly analysis by CoreLogic, homes prices in Grand Junction increased between 5.5 percent and 14.9 percent from April 2012 to April 2013.
Including foreclosure sales, short sales and other distressed sales that typically bring lower prices, home prices increased 5.5 percent. Excluding distressed sales, prices increased 14.9 percent, the California-based research firm reported.
Burkhard agreed prices are “starting to creep up,” but questioned the 14.9 percent figure.
Even as real estate activity has increased in Mesa County, property foreclosure activity has decreased, Miller said.
For May, 73 foreclosure filings and 68 foreclosure sales were reported, she said. Compared to the same moth last year, filings dropped 31.1 percent and sales held steady. Because of the time between filings and sales, the two don’t occur for an individual property in the same month.
For the first five months of the year, a total of 314 filings and 304 sales were reported. Compared to the same span in 2012, filings fell 42.5 percent and sales decreased 19.4 percent.
Sales of foreclosed properties represented 22.2 percent of all real estate transactions through the first five months of 2013, down from 25.1 percent for the same period in 2012, Miller said Miller said she expects foreclosure activity to continue to trend downward, although Burkhard said he’s concerned the full inventory of foreclosed properties hasn’t yet been depleted.
Burkhard said he’s also worried about the effects of new regulations requiring mortgage insurance for the life of loans without a 20 percent down payment as well the potential for rising mortgage interest rates that could climb to 5 percent on 30-year loans by the end of the year.
The combination could reduce the purchasing power of some potential homebuyers.
Rising prices and the threat of rising interest rates have prompted some people to search for new homes more actively, he said.