Phil Castle, The Business Times

Pressed to assess the real estate market in Mesa County, Robert Bray needs only a few words.

“More of the same,” said Bray, chief executive officer of Bray & Co. Real Estate based in Grand Junction.

Higher interest rates on mortgages and lower inventories of homes continue to curb real estate sales by what Bray considers dramatic proportions.

Annette Young, an administrative coordinator at Heritage Title Co. in Grand Junction who’s long tracked the Mesa County market, put it this way: “This is kind of the story we’ve been seeing for a long time.”

While buyers, sellers and lenders are finding more creative ways to complete transactions, neither Bray nor Young expect the overall situation to change any time soon.

Young said 270 real estate transactions worth a total of $112 million were reported in Mesa County in October. Compared to the same month last year, transactions decreased 20.4 percent and dollar volume declined 22.4 percent.

Eight large transactions worth a total of $16.8 million bolstered dollar volume, Young said. They included the sale of a hotel complex for $6.35 million and retail commercial building for $2.1 million.
A luxury home in Molina sold for $1.95 million. Still, nine transactions accounted for a total of $24.5 million in October 2022.

Through 10 months of 2023, 3,097 transactions worth a collective $1.34 billion were reported, Young said. Compared to the same span in 2022, transactions fell 26.2 percent and dollar volume fell 26.6 percent.

Young attributed the declines to higher interest rates on mortgages combined with price appreciation that have made homes less affordable — beyond the means of many buyers, in fact.

According to numbers Bray & Co. tracks for the residential market, 168 transactions worth a total of more than $73.7 million were reported in October. Compared to the same month a year ago, transactions decreased 35.4 percent and dollar volume declined 28.7 percent.

Through 10 months of 2023, 2,283 transactions worth a total of nearly $984 million were reported. Compared to the same span in 2022, transactions fell 21.2 percent and dollar volume dropped 20.3 percent.

“Interest rates really have a dramatic effect,” Bray said.

Lower residential inventories provide less selection, he said. There were 532 active residential listings in Mesa County at the end of October, less than the 587 listings at the same time last year.

Bray said many people who’d like to sell their homes are reluctant to do so because the interest rates on their mortgages are lower than what they’d pay on new loans.

Lagging new home construction has exasperated the shortage, he said. Through the end of September, the number of single-family building permits issued in Mesa County was down 40.6 percent compared to last year.

The slowing pace of real estate activity also has slowed price appreciation, he said. Through 10 months of 2023, the median price of homes sold in Mesa County was $390,000. That’s up only 1.3 percent from the same span in 2022.

But after years of double-digit year-over-year increases, the latest price is 66 percent higher than the median price five years ago and 136 percent higher than the median price 10 years ago, Bray said. While low interest rates enabled buyers to purchase more expensive homes, that’s no longer the situation, he said.

Bray said some homebuyers have turned to adjustable-rate mortgages with the expectation interest rates will drop and they can refinance. Some sellers offer to finance home purchases.

Young said she’s heard of wedding registries that now include donations for down payments on homes. “There is a creativity out there.”

But the effects of higher interest rates and low inventories on the real estate market aren’t likely to go away any time soon, Bray and Young said. Their expectation? More of the same.