Real estate recovery continues with surge in activity

Phil Castle, The Business Times

Michael Burkhard
Annette Miller

A monster month for real estate activity has improved prospects for continued recovery in the Mesa County market.

Large year-over-year gains were reported in July for both transactions and dollar volume, pushing year-to-date numbers for 2013 well past those for 2012. What’s more, the latest numbers reflect declining property foreclosure activity.

“I think we’re going to end with a good year,” said Annette Miller, a senior vice president of Heritage Title Co. in Grand Junction who’s long tracked real estate trends.

Michael Burkhard, a real estate agent with RE/MAX 4000 and chairman of the Grand Junction Area Realtors Association, put it this way: “There’s definitely light at the end of the tunnel. And it’s not a gorilla holding a flashlight.”

Miller said 382 real estate transactions worth a combined $81.2 million were reported in Mesa County during July. Compared to the same month last year, transactions climbed 24 percent and dollar volume surged 29.7 percent. The year-over-year gains were the largest proportionally since November.

Burkhard said July sales included not only homes priced at the lower end of the spectrum, but also properties at the middle and even upper end. “It was good all the way around.”

The July numbers bring total real estate activity in Mesa County through the first seven months of 2013 to 2,107 sales worth a collective $428.7 million. Compared to the same span in 2012, transactions were up 8.4 percent and dollar volume up 12.7 percent.

If the current pace of real estate activity were to continue through 2013, the year would end with 3,612 sales worth a total of nearly $735 million, the highest numbers in Mesa County since 2008.

Historically low interest rates on home mortgages continue to drive the market, Miller said. And the prospect of rising rates has prompted more shoppers to become buyers.

Rising home prices also have played a part in boosting dollar volume, Miller said. The median sales price of homes on the Multiple Listing Service rose in July to $184,900, she said. That’s an 8.3 percent increase over July 2012.

According to the latest figures from CoreLogic, a California-based research firm, home prices in Grand Junction climbed 6.1 percent between June 2102 and June 2013, excluding foreclosure auctions and short sales. Including so-called distressed sales, though, homes priced edged up only four-tenths of a point.

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

Miller said 65 foreclosure filings and 42 foreclosure sales were reported in July. Compared to the same month last year, filings retreated 13.3 percent and sales tumbled 39.1 percent. Because of the time between filings and sales, the two don’t occur for an individual property within the same month.

Through the first seven months of 2013, 440 filings and 396 sales were reported in Mesa County, Miller said. Compared to the same span in 2012, filings fell 42.2 percent and sales decreased 19.5 percent. The drop in filings constitutes a leading indicator of a continued drop in sales, she said.

The sales of foreclosure properties constituted 20 percent of all real estate transactions through the first seven months of 2013, down from

25 percent from the same span in 2012. Miller said the trend continues toward a healthier real estate market in which foreclosure sales remain below 10 percent of overall transactions.

Considering all the numbers, Miller said she expects the real estate market to continue to improve during the remainder of the year.

Even if interest rates move higher, they’re likely to remain low enough to attract buyers, she said. “I think it’s still going to be a good time to buy a house in 2013.”

Burkhard said rising interest rates and regulatory changes raise concerns, as do  low inventories of existing houses and what’s likely to be a shortage in new home construction. But he remains encouraged nonetheless. “I’m very optimistic about it.”