Phil Castle, The Business Times:
Thanks in part to gains in November, real estate sales in Mesa County have rebounded to their highest level since 2008.
With a month left to go in 2012, real estate transactions already exceed year-end totals for the past three years. Moreover, the combined dollar volume of sales so far in 2012 tops the totals for the past two years.
While a so-called “fiscal cliff” of federal tax increases and spending cuts, not to mention property foreclosures, could affect the market, industry observers look for additional progress in 2013 toward the more robust conditions that existed before the recession.
“We’re working our way back toward that. It’s not where it used to be, but we’re making headway,” said Annette Miller, senior vice president of Heritage Title Co. in Grand Junction.
Robert Bray, president of Bray Real Estate in Grand Junction, said real estate activity has improved, but could improve even more when the economy fully recovers. “The dial is moving in the right direction, but we still have a ways to go.”
Miller said 281 real estate transactions worth a combined $61.7 million were reported in Mesa County in November. Compared to the same month last year, sales increased more than 23 percent and the dollar volume of those sales jumped more than 67 percent, she said. “We had a pretty good November.”
The dollar volume was bolstered by three transactions worth a total of almost $11 million.
Through the first 11 months of 2012, a total of 3,165 transactions worth a collective $617.4 million were reported in Mesa County, Miller said. Compared to the same span last year, sales rose 13.4 percent and dollar volume increased 16.3 percent.
With a month left to go in 2012, real estate transactions already have climbed to their highest levels since 2008, when 4,459 sales were reported. The year-to-date dollar volume of sales in 2012 has reached its highest level since 2009, when the year-end total stood at $661 million.
Miller said real estate sales in Mesa County have been trending upward since 2009, when just 2,737 transactions were reported. Until rebounding this year, sales volume trended downward from 2008 to 2011.
At the current pace, 2012 remains on track for 3,453 sales worth a total of more than $673 million. If realized, those numbers will be the highest since 2008, albeit about half of those in 2007.
Bray said the increasing real estate activity reflects a combination of lower prices and historically low interest rates that have slipped below 3.5 percent for 30-year mortgages. “That’s brought a lot of people to the table to buy,” he said.
Miller said she expects the trend in increased real estate activity to continue in 2013, although a number of factors could influence market conditions.
Unless Congress takes action before the end of the year, a combination of federal tax increases and spending cuts could take affect. Faced with rising taxes, potential homebuyers could put off purchases, she said.
Miller said she’s also concerned Congress could eliminate the tax credit for mortgage interest, long a direct incentive for homeownership. Meanwhile, foreclosure activity also could affect the Mesa County market.
For November, 86 foreclosure filings and 46 foreclosure sales were reported, Miller said. Compared to the same month last year, filings were down almost 20 percent and sales rose nearly 7 percent. Because of the time between foreclosure filings and sales, the two don’t occur for an individual property in the same month.
Through the first 11 months of 2012, 1,185 foreclosure filings and 781 sales were reported, Miller said. Compared to the same span last year, filings have increased almost 7 percent even as sales have declined 8.3 percent.
Sales of foreclosed properties as a proportion of all real estate transactions has dropped from 32 percent at this time last year to 23 percent in November — a trend Miller said was encouraging. In a good real estate market, the proportion of foreclosure sales to overall transactions remains below 10 percent, she said.
Nonetheless, Miller expects more foreclosed properties to come on the market, including homes offered for sale by the Department of Housing and Urban Development (HUD) and Veterans Administration (VA).
Bray said the biggest factor of all affecting the local real estate market remains economic and labor conditions.
The monthly unemployment rate in Mesa County has dropped over the past year. But the jobless rate still stood at 8.3 percent in October, the latest month for which estimates are available.
Bray said he expects real estate activity to continue to increase. But improving economic and labor conditions are needed before real estate conditions fully rebound, he added.