Phil Castle, The Business Times

The Mesa County real estate market began 2024 nearly the same way it ended 2023 — with more of a fizzle than a bang.

But a January of declining transactions caused in part by higher interest rates and lower residential inventories doesn’t necessarily indicate what will follow the remainder of the year, industry executives said.

Robert Bray, chief executive officer of Bray & Co. Real Estate in Grand Junction, said he’s still optimistic interest rates will relent and real estate activity will increase. “Going forward, I think we’ll see a better year.”

Annette Young, the administrative coordinator at Heritage Title Co. in Grand Junction, said 208 real estate were reported in Mesa County in January. For January 2023, 214 transactions were reported.

“It looks like we’re kind of following last year’s pattern,” Young said.

Dollar volume increased 13.7 percent year over year, however, to $106 million. she said.

Fifteen large transactions worth a total of $38 million bolstered dollar volume, she said, including the sale of two retail buildings near the intersection of 12th Street and Orchard Ave. in Grand Junction for $5 million, more than 1,500 acres of the Escalante Ranch in Gateway for nearly $5 million and a self-storage facility near the Grand Junction Regional Airport for more than $4 million.

According to numbers Bray & Co. tracks for the residential real estate market, 115 transactions worth a total of nearly $47.4 million were reported in Mesa County in January. Compared to the same month last year, transactions declined 23.3 percent and dollar volume decreased 17.7 percent.

Bray said higher interest rates continue to curtail sales not only in making borrowing more expensive, but also making homeowners otherwise interested in selling reluctant to do so for fear of trading existing mortgages with comparatively lower rates with new mortgages with higher rates.

That situation also has curtailed residential inventories, Bray said. At the end of January, there were for 461 active residential listings in Mesa County. That’s down 5.5 percent from a year ago.

At the current pace of sales, there’s about a four-month supply. A six-month supply is more indicative of an equilibrium between buyers and sellers, he said

New home construction in 2023 lagged 2022 with a 40 percent decrease in the number of building permits issued in Mesa County for single-family homes.

Bray said he was encouraged, though, by the 45 permits issued in January. That’s a nearly 66.7 percent increase over the same month a year ago, although the gain could be attributed in part to more conducive weather this year for construction.

On a national level, home builders have become more confident and increased activity as a result, he said.

Low supplies coupled with persistent demand have maintained pressure on home prices, Bray said. The median price of homes sold in Mesa County in January increased 2.2 percent on a year-over-year basis to $369,000.

Fully 98.5 percent of homes sold in January received the list price, although list prices have been coming down, he said.

Just one month of real estate activity doesn’t offer any indication of what will unfold in 2024, Bray said. He looks for three to four months of activity as a more accurate indicator.

Bray said he expects average interest rates on 30-year mortgages to fall to the low 6s or high 5s, although perhaps not until the second half of 2024. “Rates will drop at some point this year.”

When they do, he said he anticipates real estate activity will increase.

In the meantime, property foreclosure activity remains minimal in Mesa County. Young said 14 foreclosure filings and three sales were reported in January. Both of those numbers were below January 2023.