Real estate market unlikely to improve until labor market improves

Bob Reece

Real estate activity in Mesa County slowed during July, but through seven months of 2010 remains slightly ahead of last year.

The market isn’t likely to change much until labor conditions substantially improve, says Bob Reece, president of Advanced Title Co. in Grand Junction and a long-time industry observer. “Nothing will change until we see the unemployment rates improve and improve by some measure.”

According to statistics provided by Reece, 221 real estate transactions were reported in Mesa County in July, down 19 percent from the 273 transactions reported in the same month last year. The combined dollar volume of July 2010 transactions totaled $55.6 million, down nearly 8 percent from the $60.4 million in volume during July 2009.

Through the first seven months of 2010, however, real estate sales and dollar volume remain slightly ahead of the same span in 2009.

For 2010, a total of 1,515 transactions were reported through July, up 1 percent from the 1,499 transactions reported in 2009. The dollar volume of those sales totaled $360 million in 2010, up 1 percent from the $356 million in sales in 2009.

Reece says the real estate market remains near the bottom of its latest cycle. “We certainly are in the trough.”

At the current average of 216 real estate transactions a month, the total for 2010 will come in at 2,597, among the lowest annual levels in the last 20 years.

“Whoever says the recession is over can’t be living in this neighborhood,” Reece says.

Meanwhile, increasing property foreclosure activity in Mesa County likely will continue to push housing prices down.

Foreclosure filings dropped slightly during the second quarter even as the increase in foreclosure sales was the smallest in a year.

Still, foreclosure activity has continued to accelerate over the past year to one of the fastest paces among the most populous counties in Colorado.

For the first half of 2010, a total of 767 foreclosure filings were reported, a nearly 75 percent increase over the first half of 2009. A total of 536 foreclosure sales were reported in the first half of 2010, a 425 percent increase over the first half of 2009.

Reece says he long has hoped foreclosure filings will drop below the 100 a month level, but 182 filings were reported in July.

Reece says he hasn’t tracked the very latest home pricing trends for Mesa County.

According to statistics from the Grand Junction Area Realtor Association, though, the average sales price of a three-bedroom, single family home fell nearly 11 percent in the first half of 2010 to $199,411. The median sales price for those properties fell 10 percent to $185,300.

Residential construction activity in Mesa County remains slow.

Reece says just 24 permits for single-family homes were issued in Mesa County during July, down 40 percent from the 40 permits issued in the same month last year.

Through the first seven months of 2010, a total of 217 permits were issued. That’s down almost 9 percent from the 238  permits issued through the same same in 2009, Reece says.