Phil Castle, The Business Times
The new year is off to a fast start for the Mesa County real estate market with big year-over-year gains in activity.
While rising interest rates and lower housing inventories could exert some effects, industry observers still look for 2017 to be another good year.
“It’s a pretty impressive start to the year,” said Kevin Bray, development coordinator at Bray Real Estate in Grand Junction.
Annette Miller, senior vice president at Heritage Title Co. in Grand Junction, agreed. “January sure put up some big numbers for us to start with.”
Miller said 278 real estate transactions worth a total of $68.5 million were reported in Mesa County in January. Compared to the same month last year, transactions rose 25.8 percent and dollar volumed increased 52.2 percent.
Four large transactions worth a total of $10.3 million bolstered the latest numbers, Miller said, including the sale of a building at 2754 Compass Drive in Grand Junction to Hope West for $5.2 million. There was one large transaction in January 2016 for $3.55 million.
Even taking multi-million dollar deals out of the equation, dollar volume still increased more than 33 percent.
Bray said the dollar volume of residential real estate sales totaled $37 million in January, up 12 percent from the same month last year. The median sales price climbed 11 percent to $210,000.
Miller said the momentum of a growing real estate market in 2016 has carried into 2017 — at least so far.
For all of 2016, 4,592 transactions worth a total of more than $1 billion were reported. Compared to 2015, transactions increased 13.1 percent and dollar volume climbed 10.1 percent to pass the $1 billion milestone for the first time in eight years.
Annual real estate sales volume peaked in Mesa County in 2006 at $1.72 billion, bottomed out in 2011 at $585 million and has increased every year since then.
The question now is whether or not the increased real estate activity reported in January will continue through the year.
“I would love that,” Miller said, although she suspects the year-end increases won’t be quite as substantial.
Interest rates on mortgages could increase and in turn reduce the purchasing power of some prospective buyers. Lower housing inventories also could slow sales, Miller said.
Bray said housing inventory levels are typically low in January and he expects stocks to increase. Rising prices will help to bring more homes to market. Moreover, builders have responded to increasing demand by constructing more new homes, he said. For 2016, 479 single-family building permits were issued in Mesa County, a 7 percent increase over 2015.
One headwind that traditionally slows the real estate market won’t blow in 2017, and that’s a presidential election, Bray said.
Meanwhile, property foreclosure activity has decreased.
Miller said 35 foreclosure filings and 27 foreclosure sales were reported in Mesa County. Compared to the same month last year, filings dropped 34 percent and sales retreated 20.6 percent.
The 23 resales of foreclosed properties during January 2017 represented just 8 percent of all transactions, down a point from January 2016 and below the 10 percent threshold Miller considers indicative of a healthy market.
Overall, Miller said she remains optimistic a year off to a fast start for the Mesa County real estate market will end with continued gains. “It still will be a healthy market.”
Bray said he’s optimistic as well about not only the real estate market, but also the economy and the prospect 2017 could go down as a year of substantial improvement. “It feels pretty upbeat out there.”