Phil Castle, The Business Times
With nearly two months still left to go, the dollar volume of real estate sales in Mesa County in 2018 already has exceeded 2017. The question is whether 2019 will top 2018.
While industry observers expect the real estate market to remain strong, rising interest rates and residential prices could slow the pace of growth next year.
“I think we could see a little bit of flattening of activity,” said Robert Bray, chief executive officer of Bray Real estate in Grand Junction. “It’ll be healthy, but flattening.”
Annette Miller, senior vice president of Heritage Title Co. in Grand Junction, said it’s unlikely 2019 will match 2018 for its fast start in real estate activity and that could result in more modest numbers. “I guess we’ll find out.”
Miller said 490 real estate transactions worth a combined $119 million were reported in Mesa County in October. Compared to the same month last year, transactions increased 1.6 percent and dollar volume rose 2.6 percent.
Two large transactions were reported, Miller said: the sale of property along U.S. Highway 50 in Grand Junction for nearly
$2.1 million and the sale of a 24-acre agricultural plot on E Road in Palisade for $1 million.
The latest numbers bring total real estate transactions in Mesa County through the first 10 months of 2018 to 4,938 worth a total of more than $1.32 billion. Compared to the same span in 2017, transactions rose 8.9 percent and dollar volume jumped 21.8 percent.
The year-to-date dollar volume for 2018 has surpassed 2017, when 5,331 transactions worth a total of more than $1.28 billion were reported.
Miller said large transactions have bolstered dollar volume for 2018 with 55 transactions worth more than $1 million each accounting for a total of $143 million so far. That’s nearly double the collective dollar volume of large transactions in 2017.
At the current pace of sales, 2018 would end with 5,926 transactions worth a total of almost $1.6 billion.
The Mesa County real estate market peaked in 2005 in terms of 7,198 transactions and in 2006 in terms of $1.7 billion in dollar volume.
Bray said 3,427 residential real estate transactions worth a combined $900 million were reported in Mesa County through the first 10 months of 2018. Compared to the same span in 2017, transactions increased 4.4 percent and dollar volume rose 12.9 percent.
With the October numbers, year-to-date real estate sales for 2018 approach those for 2017, when 3,796 transactions worth a total of almost $922 million were reported. That was the best year since 2006.
Bray said the pace of sales has slowed in recent months as interest rates and median prices keep rising.
Interest rates on 30-year mortgages have increased almost a point over the past year to nearly 5 percent, he said. The median price of homes sold in Mesa County through the first 10 months of 2018 has increased almost 7.6 percent to $235,000.
Higher interest rates affect how much some homebuyers can borrow and limit their choices in a market with rising prices, Bray said.
The inventory of existing homes on the market remains lower than last year, but has become less of a factor with slowing sales, he said. Residential construction continues to increase, but most new homes are priced at more than $270,000.
Bray said he expects 2019 will be another good year for real estate in Mesa County, but one with slower growth.
Meanwhile, property foreclosure activity continues to decline in Mesa County.
Miller said 22 foreclosure filings and seven foreclosure sales were reported in Mesa County in October — down 12 percent and 50 percent, respectively, from the same month last year.
Through the first 10 months of 2018, 224 filings and 140 sales were reported. Compared to the same span in 2017, filings dropped 30.9 percent and sales retreated 39.9 percent.
The 86 resales of foreclosure properties through the first 10 months of 2018 constituted less than 2 percent of all transactions, only a fraction of the 10 percent threshold Miller considers indicative of a healthy real estate market.