Real estate update: August sales down, but 2015 sales still up

Robert Bray
Robert Bray
Annette Miller
Annette Miller

Phil Castle, The Business Times

While real estate activity slowed in Mesa County in August, overall transactions and dollar volume remain up and are expected to finish the year that way.

“I’m a little surprised, but not concerned,” said Robert Bray, chief executive officer of Bray Real Estate in Grand Junction.

Annette Miller, senior vice president of Heritage Title Co. in Grand Junction and a long-time observer of the local real estate market, said the August decrease was likely attributable to seasonal slowing that coincides with the start of the school year. Miller also said she expects year-end numbers for 2015 to top 2014.

Miller said 336 real estate transactions worth a combined $84.7 million were reported in Mesa County during August. Compared to the same month last year, transactions dropped 7.2 percent and dollar volume fell 8.9 percent.

The year-over-year decrease in both transactions and dollar volume was the first in Mesa County since July 2014.

The slump in dollar volume occurred despite four large transactions worth a total of more than $14 million, including the sale of a large warehouse for $5.25 million.

Miller said residential real estate activity tends to slow in the late summer and fall after the start of a new school year because prospective homebuyers are more reluctant to move. “Families with kids want to be settled.”

Bray said he was surprised by the August numbers because the month was a good one for his firm. But he also said he’s not concerned. “I don’t feel like it is a trend that will continue.”

Year-to-date numbers for transactions and dollar volume  during 2015 continue to outpace 2014, and Bray and Miller said that should remain the case through the remainder of the year.

Miller said a total of 2,716 transactions worth a collective $663 million were reported in Mesa County through the first eight months of 2015. Compared to the same span in 2014, transactions are up 12.7 percent and dollar volume is up 22.8 percent.

Large transactions have bolstered dollar volume in 2015 with 27 deals accounting for a total of $117 million, Miller said. That’s more than double the collective dollar volume of large transactions during the same span in 2014.

Bray said low interest rates on mortgages continue to drive the residential real estate market and make homes more affordable. While interest rates could rise and force some prospective buyers out of the market, the trend could prompt other buyers to take action before rates moved even higher.

Higher median home prices similarly could make housing less affordable for some buyers, but attract more sellers to the market, Bray said.

Miller said she’s concerned layoffs in the energy sector related to low oil and natural gas prices could affect the Mesa County real estate market. But Bray said Mesa County already has gone through the effects of an energy bust, and the more recent downturn in the sector likely holds greater ramifications for other areas of Colorado.

Meanwhile, Miller said she remains encouraged by the downward trend in property foreclosure activity in Mesa County.

For August, 32 foreclosure filings and 33 foreclosure sales were reported in the county. Compared to the same month last year, filings jumped 33.3 percent even as sales fell 15.4 percent.

Through the first eight months of 2015, 318 filings and 201 sales were reported. Compare to the same span in 2014, filings decreased 11.7 percent and sales fell 33.9 percent.

Resales of foreclosed properties constituted just 7 percent of transactions during the first eight months of 2015, well below the 10 percent threshold Miller considers indicative of a healthy real estate market.