Low inventories could slow Mesa County real estate growth

Robert Bray
Robert Bray
Annette Miller
Annette Miller

Phil Castle, The Business Times

The year could unfold in two halves for the Mesa County real estate market: a first half of rapid growth followed by a second half of continued growth, but at a pace slowed by low housing inventories.

“My sense is we’re tapering off a bit,” said Robert Bray, chief executive officer of Bray Real Estate in Grand Junction.

Annette Miller, senior vice president of Heritage Title Co. in Grand Junction and a long-time market observer, agreed. Overall, though, the market remains healthy, she said. “For the year, we’re still looking good.”

Miller said 571 real estate transactions worth a combined $153 million were reported in Mesa County in June. Compared to the same month last year, transactions fell 3.7 percent and dollar volume rose 8.5 percent.

The year-over-year decline in transactions was the first since February 2016, Miller said.

Several large commercial transactions were reported in Grand Junction in June, she said, including the sale of apartment buildings at 2260 N. 13th St. for $2.6 million and an industrial property at 2175 Railroad Ave. for $2.2 million. In Clifton, a location at 3204 Interstate 70 Business Loop with a Dollar Tree Store sold for just over $1 million.

Through the first half of 2018, 2,861 transactions worth a collective $737 million were reported in Mesa County, Miller said. Compared to the first half of 2017, transactions increased 12.3 percent and dollar volume surged 22.6 percent.

If the current pace of activity were to continue through the second half of 2018, the year would end with 5,722 transactions worth a total of nearly $1.5 billion. The Mesa County real estate market peaked in 2005 in terms of the 7,198 transactions and in 2006 in terms of the $1.7 billion in dollar volume.

Miller said she expects real estate activity to continue to increase in the second half, but at a pace slowed by low housing inventories.

Bray said 402 residential real estate transactions were reported in Mesa County in June, down 11 from the same month last year. For the first half of 2018, 1,994 transactions worth a collective
$527 million were reported. Compared to the first half of 2017, transactions rose 6.6 percent and dollar volume jumped 17.1 percent.

The median price of homes sold during the first half of 2018 increased 8.8 percent to $234,000. The average time on market decreased 13.6 percent to 57 days.

With 883 active listings at the end of June, only a two-month supply of inventory remains available in Mesa County at the current pace of sales, Bray said. “It’s just really tight.”

Demand for housing has outstripped supply, Bray said, Moreover, a growing proportion of homebuyers come from outside Mesa County. While they’re buying homes here, the previous homes they’re selling are located elsewhere.

New home construction continues to increase, but not yet enough to keep pace, Bray said. For June, 65 building permits for single family homes were issued in Mesa County, up 23 percent from the same month last year. For the first half of 2018, 428 permits were issued, up 34 percent from the first half of 2017.

Bray described the first half of 2018 as “exceptionally strong.” The second half, he said, “will still be good.” But growth could be slowed by low inventories.

Meanwhile, property foreclosure activity continues to slow.

Miller said 143 foreclosure filings and 88 foreclosure sales were reported in Mesa County during the first half of 2018. Compared to the first half of 2017, filings declined 33.2 percent and sales dropped 40.6 percent.

The 54 resales of foreclosed properties during the first half of 2018 constituted less than 2 percent of all transactions.