Recent economic updates point to a local economy that’s growing, yet slowing in terms of the number of real estate transactions and consumers’ willingness to spend. What does this mean for the future for our region? Let’s look at some factors that could affect us.
First, let’s look at the Grand Junction Regional Airport and expected flights in and out of Grand Junction for 2019. According to the Grand Junction Airport Authority, more passengers will fly in and out of Grand Junction in 2019 than 2018, which was a good year for air traffic. More air travel usually equates with more real estate transactions and investment in the Grand Junction area.
Interest rates appear to have fallen since increases in the third and fourth quarters of 2018. Stable long-term and short-term rates bode well for the local economy this year. This should give some legs to the strengthening economy. It appears the national economy will have to heat up quite a bit more before rising interest rates really become an issue.
The stock market is up and the stock market is down — depending on which time horizon you consider. Some market prognosticators claim this longest running bull market won’t end on a whimper, but a dramatic run-up before the market finally gives up. We haven’t seen that type of run-up yet. Perhaps there’s more room in this bull market, which should help the local economy to continue to strengthen.
Housing prices are rising. And if interest rates plateau, we should have another robust year in Grand Junction area home sales. According to the Grand Junction Area Realtor Association, average house prices rose about 10 percent last year. Unit sales volume continues to rise, albeit at a small rate. As more lots become available for local home builders, new inventory should sustain sales numbers and resulting home values. While some home builders could slow their production in 2019, others will increase their activities and we shouldn’t miss a beat in new housing sales.
A few large commercial sales continue to trickle in, and gross sales numbers are up for transactions. Future interest rate increases and ever-increasing commercial property tax rates could slow commercial development in the long run. But stabilized rents and a growing number of investor buyers should help sellers achieve better returns through 2019.
The general outlook for the local construction and investment markets remains upbeat, although some investors are concerned with a changing political climate and the uncertainty that brings to future markets.
Bottom line: Colorado remains the best state in which to live and operate a business, and the Western Slope has become the crown jewel of the state. The view from my crystal book for 2019 looks great.