Ups and downs bolster prospects for real estate market
Phil Castle, The Business Times
Increasing real estate activity and decreasing foreclosure activity bode well for what’s expected to be continued recovery in the Grand Junction market in 2013.
While just two months of statistics on real estate sales and foreclosure filings and sales don’t yet constitute a trend, the numbers offer an encouraging start for the year, said Robert Bray, president of Bray Real Estate in Grand Junction.
“I think we’re sailing through another good year for residential real estate.”
One of the biggest challenges remains inventory, or rather the lack of it, Bray said. But rising prices are expected to bring more homes to market.
Annette Miller, senior vice president of Heritage Title Co. in Grand Junction, said real estate and foreclosure numbers continue to reflect improving conditions. “This is all good news of a normalizing market.”
According to numbers compiled by Miller for February, 207 real estate transactions worth a combined $39.6 million were reported in Mesa County. There was just one more transaction in February 2012, while the dollar volume of those was 2.3 percent lower at $38.7 million.
For the first two months of 2013, 445 transactions worth a collective $86.05 million were reported in Mesa County, Miller said. Compared to the first two months of 2012, transactions increased 5.5 percent and the dollar volume climbed 13.1 percent.
Real estate sales have been trending upward in Mesa County since 2009, when just 2,737 transactions were recorded.
For 2012, 3,444 transactions worth a combined $681.2 million were reported, up 12.7 percent and 16.3 percent, respectively, over 2011.
The year-end totals for 2012 were the highest since 2008, albeit far lower than that year.
Miller said she expects real estate activity to continue to increase in 2013. “I hope we’ll just see more of the same that we saw in 2012.”
Bray said he expects historically low interest rates and comparably lower prices to attract buyers. “It’s trending toward another good year for real estate.”
Those prospects depend in part, though, on available inventory. Like most other areas of the United States, the inventory of homes on the market in Grand Junction has dropped significantly, Bray said.
Homeowners who owe more on their mortgages than their houses are worth are understandably reluctant to sell them, Bray said. But as rising prices change that calculation, more homes should come on the market, he added.
The construction of new homes in Mesa County has increased as well, he said.
Recent trends in property foreclosure activity, which in turn affect the real estate market, also are encouraging, Miller and Bray said.
For February, 53 foreclosure filings and 50 foreclosure sales were reported for Mesa County, Miller said. Compared to February 2012, filings dropped more than 50 percent and sales declined more than 25 percent.
For the first two months of the year, 113 foreclosure filings and 105 sales were reported, decreases of 43.5 percent and 26.6 percent compared to the first two months of 2011, Miller said.
So far in 2013, the resale of foreclosed properties accounts for 25.6 percent of all transactions. During the same span in 2012, that proportion was higher at 33.4 percent, Miller said.
Since foreclosed properties tend to sell for less that comparable properties on the market, foreclosure activity pulls down real estate prices. But as foreclosure activity decreases, it will have less effect, Bray said. “I just think that number is going to start to become less of an influence on the real estate market.”