Phil Castle, The Business Times
Robert Bray jokes he has a ready answer for when people invariably ask him to asess the performance of the local real estate market — an answer that works equally well in good times and bad.
“Simply unbelievable,” he says.
The chief executive officer of Bray Real Estate remains willing, nonetheless, to offer a more specific forecast for 2019. While the pace of growth could slow, the market should remain healthy, Bray says. “It’s going to be a good year for Grand Junction real estate.”
Speaking at an economic forecast forum at Colorado Mesa University, Bray discussed recent trends in residential and commercial real estate in Mesa County as well as what he foresees in the year ahead.
A total of 3,9565 residential real estate transactions were reported in Mesa County during 2018, just below the peak of 3,998 in 2007, Bray says.
Proportional gains in real estate transactions have decreased, though, with a 13.8 percent jump in residential transactions from 2016 to 2017 and 4 percent different from 2017 to 2018.
Bray says he expects transactions to hold steady or slip a bit in 2019 as a result of three factors: low housing inventories, rising prices and what could be higher interest rates or mortgages.
At of the end of 2018, there were 643 active listings for homes for sale in Mesa County. At the pace of current pace of sales, that’s less than a three-month supply that creates a seller’s market, Bray says.
Contrast that with 2010, when foreclosed properties for sale bolstered what was at that time a 13-month supply, Bray says.
A four- to six-month supply constitutes what’s considered an equilibrium, he says.
The median price of homes sold in Mesa County increased nearly 7.8 percent in 2018 to $235,000, topping the previous peak.
Brays says he expects the median price to rise another 6 percent to 7 percent in 2019 to top $250,000.
The Grand Valley remains an attractive place in which to relocate, especially for people from the Denver metro area and Front Range of Colorado. Given higher housing prices in those areas, people can sell their homes, relocate to the Grand Valley, buy or build better homes and pocket the difference.
The pace of new home construction continues to accelerate in Mesa County, Bray says, with 802 building permits for single family homes issued in 2018.
The number of building permits issued in 2019 likely will approach 900, he says. But that still will be less than the 1,000 permits a year market conditions warrant. “We’ve been playing catchup.”
If interest rates rise, that could limit how much some prospective buyers can borrow and, in turn, spending on homes. Low inventories and rising prices make it more difficult to find homes at the lower end of the price spectrum, he says.
The commercial real estate market tends to lag behind the residential market as commercial building follows more rooftops, Bray says. The pace of commercial activity has accelerated with more than 250 commercial sales worth a total of more than $180 million reported in Mesa County during 2018.
A number of commercial projects are under construction or planned for 2019, he says, including a new hotel in downtown Grand Junction, a medical office building along Patterson Road and new bank buildings in Grand Junction and Palisade. “There’s a lot of activity.”
While it’s been challenging for private developers to construct multi-family housing given high land costs and low rents, some projects are planned, Bray says.