Pace of real estate growth appears to be slowing

Robert Bray

Robert Bray

Annette Miller

Annette Miller

Phil Castle, The Business Times

While real estate activity continues to increase in Mesa County, the pace of that growth appears to be slowing.

“There’s a little bit of cooling off,” said Robert Bray, chief executive officer of Bray Real Estate in Grand Junction. He attributed slowing to the effects of higher interest rates in a market with rising prices and shrinking inventories.

Annette Miller, senior vice president of Heritage Title Co., in Grand Junction, also expects slowing in the fourth quarter. “I think it’s going to cool off.”

Miller said 470 real estate transactions worth a combined $129 million were reported in Mesa County in September. Compared to the same month last year, transactions edged down eight-tenths of a percent, but the dollar volume rose 9.3 percent.

Large commercial transactions once again bolstered dollar volume, with seven deals accounting for a total of nearly $21.6 million, Miller said. In Grand Junction, a medical building at 627 25 1/2 Road sold for almost $8.2 million and a 24-unit apartment building at 1800 Main St. sold for $7.3 million. In Palisade, an agricultural facility at 1041 N. River Road sold for $1.6 million.

The latest numbers bring total real estate transactions in Mesa County through the first three quarters of 2018 to 4,448 worth a total of more than $1.2 billion. Compared to the same span in 2017, transactions rose 9.7 percent and dollar volume surged 24.1 percent.

“I think it was really a healthy three quarters,” Miller said.

While she anticipates what she called a “very decent year,” there’ll likely be some slowing in the fourth quarter. In addition to seasonal slowing, confidence has ebbed and the midterm elections have created some political uncertainty, she said.

Bray said 3,084 residential real estate transactions worth a collective $814 million were reported in Mesa County through the first three quarters of 2018. Compared to the same span in 2017, transactions increase 4.6 percent and dollar volume grew 14 percent.

A year ago at this time, transactions were up 13 percent over 2016, Bray said. He expects 2018 to end up with 6 percent to 8 percent growth.

Interest rates on 30-year loans have increased almost a point over the past year to nearly 5 percent, Bray said. Higher interest rates affect how much homebuyers can afford, in turn limiting their choices in a market with rising prices and shrinking inventories.

The median price of homes sold through the first three quarters of 2018 climbed to $235,000, a gain of 8 percent over the past year. There were 949 active listings at the end of September,  a three-month supply at the current pace of sales. The inventory of homes priced between $100,000 and $299,000 is lower with a two-month supply.

New home construction continues to increase, however. For September, 62 single family building permits were issued in Mesa County, a 9 percent increase over the same month last year. Through the first three quarters of 2018, 642 building permits were issued. That’s a 30 percent gain.

Meanwhile,  property foreclosure activity continued to decline in  Mesa County.

Miller said 19 foreclosure filings and 15 foreclosure sales were reported in September — down 32.1 percent and 31.8 percent, respectively, from the same month last year.

Through the first three quarters of 2018, 202 filings and 133 sales were reported. Compared to the same span in 2017, filings dropped 32.4 percent and sales decreased 39.3 percent.

The 78 resales of foreclosed properties through the first three quarters of 2018 constituted less than 1.8 percent of all transactions, well below the 10 percent threshold Miller considers indicative of a healthy real estate market.

Phil Castle is editor of the Grand Valley Business Times, a twice-monthly business journal published in Grand Junction. Castle brings to his duties nearly 30 years of experience in editorial management positions with Western Colorado newspapers. In addition, his free-lance work has appeared in a variety of publications, including the Washington Post. He holds a bachelor's degree in technical journalism from Colorado State University.
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