Industry observers: Real estate market off to reassuring start in 2013

Annette Miller
Robert Bray

Phil Castle, The Business Times

Real estate activity continues to increase in Mesa County, offering what industry observers consider a reassuring start to what they expect will be a year of improving market conditions.

“It’s a very comforting start to the new year for us,” said Annette Miller, senior vice president of Heritage Title Co. in Grand Junction.

Robert Bray, president of Bray Real Estate in Grand Junction, said it’s important not to read too much into only a single month of statistics.

He’s encouraged nonetheless. “I think this supports what I believe will be another good year for real estate.” Miller said 238 real estate transactions worth a combined $46.45 million were recorded in Mesa County in January.

While those numbers are down from December, they still constitute year-over-year gains. Compared to January 2012, real estate sales increased 11.2 percent and the dollar volume of those sales jumped 24.2 percent.

“We’ve got a really great beginning of the year,” Miller said.

Real estate sales have been trending upward in Mesa County since 2009, when just 2,737 transactions were recorded.

In 2012, 3,444 transactions worth a combined $681.2 million were reported, up 12.7 percent and 16.3 percent, respectively, over 2011.

The year-end totals for 2012 were the highest since 2008, albeit far lower than that year.

Bray said he expects real estate activity  to continue to increase in 2013, although the proportional increase in transactions could slow a bit, perhaps to between 8 percent and 10 percent.

The inventory of homes on the market has dropped in Mesa County, particularly for properties priced at the lower end of the spectrum.

But rising prices and warming weather should bring more sellers, Bray said.

New home construction also is expected to pick up, he said, with perhaps 465 residential building permits issued in the county this year.

Trends in property foreclosure activity, which also affects the real estate market, have been encouraging as well, Miller said.

For January, 60 foreclosure filings and 55 sales were reported in Mesa County, she said. Compared to the same month last year, filings dropped 35.5 percent and sales fell 27.6 percent. Because of the time between filings and sales, the two don’t occur for an individual property in the same month.

Miller said foreclosure filings have dropped on a year-over-year basis for five consecutive months, a leading indicator that fewer sales will follow. And fewer sales will help in pulling up prices since foreclosed properties typically sell for less than comparable homes on the market, she said.

The sale of foreclosed properties constituted 23.1 percent of all transactions during January, down from 29 percent for the same month last year, Miller said. In a good real estate market, the proportion of foreclosure sales to overall transactions remains below 10 percent, she said.

Bray said he expects foreclosure activity to continue to trend down toward more normal levels.