Phil Castle, The Business Times
The real estate market has performed even better this year than Robert Bray initially had expected.
The chief executive officer of Bray Real Estate in Grand Junction couldn’t be happier to have been proven wrong. “I’m OK on that.”
With a month left to go, the number of real estate transactions and collective dollar volume of sales reported in Mesa County so far in 2015 have topped the year-end numbers for 2014.
“It’s a great year,” said Annette Miller, senior vice president of Heritage Title Co. in Grand Junction and a long-time observer of the local real estate market.
The initial outlook for 2016 remains upbeat. “Next year portends to be another good year,” Bray said.
Miller said 317 real estate transactions worth a combined $85 million were reported in Mesa County in November. Compared to the same month last year, transactions increased 14.4 percent, while the dollar volume jumped 43.3 percent.
The increase in dollar volume was bolstered in large part by the sale of the facility housing Gold’s Gym in Grand Junction for $12.2 million, Miller said. In addition, a house and 100 acres of property located near the Colorado River in Palisade sold for $1.75 million, she said.
The November numbers bring the year-to-date totals for Mesa County to 3,719 transactions worth a total of $889 million. Compared to the same 11-month span in 2014, transactions were up 11.3 percent and dollar volume increased 21.2 percent.
Moreover, the year-to-date totals for 2015 already top the year-end totals for 2014, when 3,653 transactions worth a total of $809 million were reported.
Bray said he expected a four-year trend of growth in the local real estate market to continue in 2015, but at a slower pace than what actually occurred. “It has turned out a little better than what I initially thought it would be.”
The market has benefited from what Bray described as “organic growth” with a growing willingness among people to purchase first homes or move up to larger houses. Bray said he’s also heard anecdotally about increased demand from more retirees moving to the Grand Valley from the Front Range.
Miller attributed increasing real estate sales in part to what had been pent up demand in the aftermath of the recession. Increasing home prices also have allowed people to build more equity and use that to move up to larger houses.
Grand Junction home prices rose 1.1 percent between September and October and 9.5 percent between October 2014 and October 2015, according to CoreLogic, a California research firm. Those proportions include such so-called distressed sales as short sales and foreclosure auctions.
Bray said the bulk of residential sales between January and October — about 84 percent in fact — occurred at a price point of $300,000 or less. At that pace of sales, about three months worth of inventory remains on the market, he said.
Along with increased residential real estate activity, large commercial transactions also have bolstered the market, Miller said. Those deals have included the sales of the Canyon View Marketplace and Mesa View and Atrium retirement communities as well as several hotels and large warehouses. Through November, there were 38 transactions worth more than $1 million for a total of $143 million, she said
Bray and Miller both said they expect increased real estate activity to continue in 2016 with the added possibility of more new home construction.
Bray said there’s a possibility mortgage interest rates could increase — a situation he considers a two-edged sword that could motivate some people to buy homes, but make it more difficult for others to do so. But he anticipates a more incremental than significant interest rate hike.
Meanwhile, property foreclosure activity has decreased in Mesa County.
Miller said 33 foreclosure filings and 21 foreclosure sales were reported in November, exactly matching the numbers for the same month last year.
Through November, 438 filings and 272 sales were reported. Compared to the same span last year, filings declined 11.2 percent and sales dropped 28.6 percent.
The resale of 256 properties constituted 7 percent of all transactions reported year to date in 2015, less than the 10 percent threshold Miller considers indicative of a healthy real estate market.