Sales reflect steady growth in real estate market

Robert Bray
Robert Bray
Annette Miller
Annette Miller

Phil Castle, The Business Times

While the Mesa County real estate market hasn’t yet fully recovered, at least by prerecession standards, year-over-year increases in sales reflect what observers consider steady growth.

“There’s a feeling of stability in the marketplace,” 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, agreed. “There’s stability in the growth, and that’s very comforting.”

Considering that property foreclosure activity continues to decrease, the outlook for improvement remains upbeat, Miller said. “There’s no indication it’s not going to.”

Miller said 417 real estate transactions worth a total of $86 million were reported in Mesa County during May. Compared to the same month last year, transactions increased 18.1 percent and dollar volume rose 7.5 percent.

“I’m very happy with the numbers,” Miller said.

There was only one transaction worth more than $1 million — the sale of a residence for $1.5 million. That contrasts with six transactions worth a total of $9 million
for the same month last year. So the latest increase in dollar volume reflects higher sales activity.

The latest numbers bring year-to-date totals for Mesa County through May to 1,525 transactions worth a collective $327 million, Miller said. Compared to the same span last year, transactions increased 17.6 percent and dollar volume climbed 19.3 percent.

If that pace of sales activity were to continue, 2015 would end with 3,660 transactions worth a combined $784.8 million. Those totals would be close to 2014 and among the highest for Mesa County since 2008 and what was at that time a robust market that preceded downturns in the regional energy sector and overall economy. By comparison, 4,459 transactions worth a total of $1.3 billion were reported for that year.

Bray described the more recent growth in the real estate market as “organic” and preferable in the long-term to a boom market inevitable followed by a bust.

Bray attributed increasing real estate activity in 2015 to a number of factors, among them good weather early in the year and low interest rates on mortgages.

Demand remains especially strong for homes priced below $200,000, with such properties often attracting multiple offers. Demand also has picked up for higher-priced homes, although prices for those properties remain below prerecession levels, Bray said.

According to the latest numbers from CoreLogic for April, Grand Junction home prices have increased 9 percent over the past year. That gain takes into account such so-called distressed sales as foreclosure sales and short-sales. Excluding distressed sales, Grand Junction home prices have increased 9.2 percent.

The California-based research firm bases its calculations on repeat sales for the same homes over time.

Bray said the number of new homes coming onto the market has increased, but the growing number of transactions continues to outpace the supply.

While interest rates have ticked up a bit and could increase further by the end of the year, Bray said he expects 2015 will be better for real estate than 2014.

Miller said she’s also encouraged by decreasing property foreclosure activity and, in turn, what’s become a negligible effect on the Mesa County real estate market.

Miller said 46 property foreclosure filings and 27 foreclosure sales were reported in May. Compared to the same month last year, filings edged down 2.1 percent even as sales dropped 20.6 percent.

Through the first five months of 2015, 196 filings and 112 sales were reported. Compared to the same span in 2014, filings dropped 18 percent and sales fell 46.6 percent.

Sales of foreclosed property year to date represented just 8.1 percent of all transactions, well below the 10 percent threshold Miller considers indicative of a normal market.

Miller said the Mesa County market hasn’t rebounded to the levels experienced before 2008, and new home construction continues to lag. But the overall direction of the market is a positive one, she said.