Phil Castle, The Business Times

Real estate activity continues to slow in Mesa County as higher interest rates and inflation affect sales.

But Stewart Cruickshank sees the shift as a return to more normal market conditions coming off a record-breaking pace in 2021. “We’re in third gear, not neutral,” said Cruickshank, sales manager at Bray & Co. Real Estate in Grand Junction.

Annette Young, administrative coordinator at Heritage Title Co. in Grand Junction, said slowing could help build inventory, reduce price appreciation and make real estate more affordable. “It’s not all negative.”

Young said 396 real estate transactions worth a total of $196.1 million were reported in Mesa County in August. Compared to the same month last year, transactions fell 27.2 percent and dollar volume declined 11.3 percent.

Large transactions bolstered dollar volume — 19 transactions accounted for a combined $48.1 million. They included the sale of WoodSpring Suites for $15.3 million, the Village Fair Shopping Center for $4.1 million and commercial property along the Riverside Parkway for $3.9 million.

Through the first eight months of 2022, 3,485 transactions worth a total of more than $1.5 billion were reported. Compared to the same span in 2021, transactions decreased 17 percent and dollar volume edged down nearly a half of a percent.

For all of 2021, 6,193 transactions worth a combined $2.36 billion were reported, the highest level for dollar volume ever. Transactions spiked at 7,198 in 2005.

Young said higher interest rates on mortgages have slowed real estate activity, but so has higher prices for homes and inflation that’s made gasoline, food and other products more expensive.

According to numbers Bray & Co. tracks for the residential market in Mesa County, 266 transactions worth a combined $119.2 million were reported in August. Compared to the same month last year, transactions fell 22.2 percent and dollar volume declined 9.3 percent.

Through the first eight months of 2022, 2,332 transactions worth a total of nearly $998.2 million were reported. Compared to the same span in 2021, transactions decreased 15.5 percent and dollar volume slipped 1 percent.

Cruickshank said the latest numbers are more reflective of activity before the COVID-19 pandemic and still constitute what he considers a robust market overall.

Fewer sales have bolstered inventory. As of the end of August, there were 594 active residential listings in Mesa County. That’s up nearly 48.8 percent from a year ago, but still only about two months of supply at the current pace of sales.

New homes construction lags. A total of 62 single family building permits were issued in Mesa County in August and 558 through the first eight months of 2022. That’s down 28.7 percent and 17 percent, respectively, from last year. Cruickshank said builders face uncertainty as well as material and labor shortages.

Home prices continue to climb. The median price of homes sold during the first eight months of 2022 rose 18.5 percent to $385,000 compared to the same span in 2021.

What was a bidding frenzy for some homes has abated, Cruickshank said. While 98.7 percent of homes sold in August received list price, that’s down from nearly 100.5 percent for the same month last year

Cruickshank said he expects the pace of appreciation to slow, but demand to persist. Grand Junction remains an attractive place to live, he said, with comparatively lower housing prices and taxes and a lower cost of living. “I’m excited about our future in real estate.”

Meanwhile, property foreclosure filings continue to increase in Mesa County, Young said. Through the first eight months of 2022, 168 filings were recorded. That’s up from just 19 for the same span in 2021. 

The increase in foreclosure sales hasn’t been as pronounced, she said, with 25 sales through the first eight months of 2022. That’s up from 13 in the same span last year. Many filings are withdrawn before the completion of the foreclosure process.