Trends point to real estate rebound in 2012
Phil Castle, The Business Times:
Annette Miller believes 2012 could be the year the inventory of foreclosed properties shrinks to the point real estate prices finally rebound in Mesa County.
“I don’t know if 2012 is going to be the magic year, but we’ll continue to watch it closely,” said Miller, senior vice president of Heritage Title Co. in Grand Junction and a long-time observer of the local real estate market.
Through one month of the new year, real estate transactions in Mesa County held steady compared to the same month in 2011 even as the sale of foreclosed properties at lower prices pushed down dollar volume.
Property foreclosure filings dropped, but foreclosure sales increased.
According to numbers compiled by Miller, 214 real estate transactions worth a collective $37.4 million were reported in Mesa County in January. Compared to the same month last year, transactions edged up nearly 2 percent, but the dollar volume dropped almost 16 percent.
Miller expects the trend to continue. “I think we’ll just see a continuation of that.”
The sale of foreclosed properties owned by the government and banks tend to pull down prices because foreclosed properties typically sell for less than comparable properties on the market.
According to the Grand Junction Area Realtors Association, the median price of a residential property fell to just under $160,000 in 2011, down 15 percent from the year before.
During January, 62 transactions involved foreclosed properties, 29 percent of overall sales, Miller said. In a good real estate market, the proportion of foreclosed properties to overall sales remains under 10 percent, she added.
Miller views the sale of foreclosed properties as a good thing, though, because it’s necessary to reduce the inventory of such properties to stabilize prices.
Moreover, there are signs foreclosure activity is slowing in Mesa County. For January, 93 foreclosure filings and 76 sales were reported, Miller said. Compared to the same month last year, filings declined more than
21 percent, while sales increased more than 15 percent. Because of the time that elapses in between, both a filing and sale for a given property don’t occur in the same month.
For all of 2011, 1,215 filings and 933 sales were reported. Filings dropped more than 23 percent from 2010. Sales held steady.
Since filings constitute a leading indicator of foreclosure activity, Miller sees the downward trend as a sign of fewer foreclosures in 2012.
Miller also sees a measure of encouragement in proposed federal policies that would make it easier for homeowners to refinance their mortgages to take advantage of historically low interest rates and, consequently, lower their monthly payments. Lower home values and tighter lending standards have made it more difficult for homeowners to refinance their mortgages. Efforts to make the process easier could help curb foreclosures, she said.