Phil Castle, The Business Times
Real estate sales continue to slow in Mesa County as the coronavirus pandemic affects the market and overall economy.
As a lagging indicator of activity over the past two months, sales could slow further. But the longer-term outlook remains more encouraging, executives say.
Robert Bray, chief executive officer of Bray Real Estate in Grand Junction, said he’s hopeful what’s typically a seasonal increase in real estate activity has only been pushed back a couple of months. “Spring got moved thanks to COVID.”
Annette Miller, senior vice president of Heritage Title Co. in Grand Junction, also said she expects the downward trend in sales to flatten. But a rebound in activity will depend in part on how quickly businesses reopen and people return to work. Even as businesses reopen, Miller said she’s worried they could face liability issues if there’s a resurgence of COVID-19 cases.
Miller said 347 real estate transactions worth a combined $106 million were reported in Mesa County in May. Compared to the same month last year, transactions dropped 34 percent and total dollar volume declined 27.9 percent.
Three large commercial transactions valued at a total of nearly $18 million bolstered dollar volume, Miller said: the sale of a medical facility on 25 1/2 Road for $12.5 million, the sale of a cold storage warehouse on Sandhill Lane for $4.1 million and the sale of six townhome units on Flat Top Lane for $1.25 million.
According to numbers tracked by Bray Real Estate, 248 residential real estate transactions worth a total of $68 million were reported in May. Compared to the same month last year, transactions declined 39.8 percent and dollar volume decreased 42.4 percent.
Proportionally, the year-over-year decreases are among the biggest since the oil shale bust in the 1980s and Great Recession a decade ago, Bray said.
For the first five months of 2020, Miller said 1,814 real estate transactions worth a collective $557 million were reported in Mesa County. Compared to the same span in 2019, transactions decreased 9.7 percent and dollar volume declined 5.9 percent.
According to Bray Real Estate, 1,316 residential transactions worth a combined $389 million were reported through the first five months of 2020. Compared to the same period in 2019, transactions fell 10.7 percent and dollar volume decreased 5.4 percent.
Miller and Bray said real estate closings constitute a lagging indicator of activity from four to six weeks ago or even more. Consequently, the latest numbers reflect activity going back to April and March, when pandemic restrictions and stay-at-home orders were in full effect.
Less-restrictive guidelines since have been implemented in Mesa County. While open houses are still prohibited, real estate agents can schedule showings.
The effects of the pandemic could persist for a while longer in real estate numbers, Miller and Bray said.
They also expect the trend to change.
Bray said homebuyer activity remains strong. Interest rates on 30- and 15-year mortgages have moved lower, he said. “That’s the good news in all this.”
Lack of housing inventory presents a headwind, though. At the end of May, there were 555 active listings. That’s down 26.9 percent from the same time last year and the lowest level in 12 years, he said.
The median price of homes sold through the first five months of 2020 rose 8.8 percent to $272,000.
Bray said the Mesa County real estate market remains healthy overall and he still anticipates a good year.
Miller said she expects the fallout of the pandemic on the real estate market to shift from the direct effects on businesses and individuals to broader economic implications and whether or not people have jobs that enable them to purchase homes.
Bray said the pandemic could exert another effect in motivating more people to move from big cities hit hardest by the outbreak to locations like the Grand Valley.
Meanwhile, property foreclosure activity continues to decrease in Mesa County.
Miller said there were four foreclosure filings in May and no foreclosure sales.
Through the first five months of 2020, there were 66 filings and 16 sales. Compared to the same span in 2019, filings decreased 21.4 percent, and sales dropped 70.9 percent.
The 20 resales of foreclosed properties through the first five months of 2020 constituted 1.1 percent of all real estate transactions, Miller said. That’s below the 10 percent threshold she considers indicative of a healthy real estate market.