Pace of real estate activity picking up in Mesa County

Phil Castle, The Business Times:

The pace of real estate activity in Mesa County has picked up with year-over-year gains in sales and dollar volume of about 30 percent in May. What’s more, higher sales and lower inventories have combined to push up home prices.

“It is picking up a smidge more momentum,” said Annette Miller, senior vice president at Heritage Title Co. in Grand Junction. Given the May numbers, Miller reconsidered. “That’s probably more than a smidge.”

Robert Bray, president of Bray Real Estate in Grand Junction, agreed that activity has increased, particularly for homes priced below $150,000. Homes in that price range with curb appeal often elicit two or three offers and remain on the market only a matter of weeks, Bray said.

But lower inventories and historically low interest have created better market conditions in general, he added.

Miller said 337 real estate transactions worth a combined $66.5 million were reported in Mesa County during May. Compared to the same month last year, transactions increased nearly 30 percent and dollar volume rose almost 32 percent.

While May typically constitutes one of the busiest months of the year for real estate activity, Miller said the month that just concluded was especially busy, even reminiscent of a more robust market. “It felt like some of the old Mays.”

Through the first five months of 2012, 1,326 real estate transactions worth a collective $258.5 million were reported in Mesa County, Miller said. That leaves year-to-date transactions 14.7 percent ahead of the same span last year and dollar volume 13.2 percent higher.

Bray attributed the increasing dollar volume of real estate transactions in Mesa County not only to more sales, but also higher home prices.

Strong demand for lower-priced homes as well as a smaller inventory of homes on the market has helped push up median prices, Bray said.

Historically low interest rates on mortgages have made homes more affordable and bolstered demand, Bray added. Rates for 30-year mortgages have dropped below 4 percent, while rates for 15-year mortgages have dropped below 3 percent. “It is almost beyond belief,” he said.

While interest rates could increase, Bray said he expects rates to remain “attractive” through the year, if not longer.

Both Miller and Bray said they expect year-over-year gains in real estates transactions and dollar volume to continue through 2012.

“That’s a pretty good step,” Miller said. Still, a number of variables could affect the market.

Since foreclosed properties typically sell for less than other, comparable properties on the market, foreclosure activity plays a role in market conditions.

For May, 107 foreclosure filings and 68 foreclosure sales were recorded in Mesa County, Miller said. Compared to the same month last year, filings increased 8 percent, but sales dropped 19 percent.

Through the first five months of 2012, 547 filings and 377 foreclosure sales were recorded in the county. Year-to-date filings increased 12 percent, while sales dropped 9.6 percent.

Miller said it’s difficult to determine how many more properties will go through the foreclosure process. She said she only hopes there won’t be a sudden surge of bank- and government-owned properties on the market.

Bray said he expects foreclosure filings to hold steady through the year, while short sales and loan modifications curb the number of properties that go through the foreclosure process all the way to sale.

The ability of people to purchase homes and continue to pay mortgages also depends on employment, Miller said.

The seasonally unadjusted unemployment rate in Mesa County dropped four-tenths of a point to 9.1 percent in April, the latest month for which estimates are available. Over the past year, payrolls, the number of people counted among those unsuccessfully looking for work and the overall work force all have declined in the county.