Phil Castle, Business Times

Mesa County real estate sales continue to trend downward on a year-over-year basis. But Robert Bray also sees opportunities in growing inventories, declining mortgage interest rates and lower prices.

“I see some silver linings coming out of this,” said Bray, chief executive officer of Bray & Co. in Grand Junction.

Annette Young, administrative coordinator at Heritage Title Co. in Grand Junction, expects demand to persist. But it’s also a question, she said, of affordability.

Young said 214 real estate transactions worth a combined $93.2 million were reported in Mesa County in January. Compared to the same month last year, transactions fell 43.1 percent and dollar volume dropped 42.8 percent.

Seven large transactions worth a total of $21 million bolstered dollar volume, Young said. They included the sale of a building on First Street in Grand Junction that previously housed a furniture store and church — along with the adjacent lot — for $6 million and a retail building at 1201 Wellington Ave. for nearly $3 million. Restaurants located at 2489 U.S. Highway 6 & 50 sold for $2.5 million and then again for $4 million.

The year-over-year comparison in overall real estate activity doesn’t provide a complete statistical picture because of what was a robust start to 2022. Moreover, 23 large transactions accounted for a total of $43.5 million in dollar volume in January 2022.

The pace of real estate sales slowed over the course of 2022, however, as the Federal Reserved raised interest rates to curb inflation. Mortgage interest rates doubled, and the combination of higher interest rates and prices made real estate less affordable.

For all of 2022, 4,722 transactions worth a total of $2.078 billion were reported in Mesa County. Compared to 2021, transactions fell 23.8 percent and dollar volume dropped 11.9 percent.

According to numbers Bray & Co. tracks for the residential real estate market in Mesa County, 143 transactions worth a combined $55 million were reported in January 2023. Compared to the same month last year, transactions declined 35.3 percent and dollar volume decreased 39 percent.

Bray said he also monitors other numbers, though, including inventories and median sales price.

At the end of January 2023, there were 490 active listings in Mesa County. That’s 303 more listings than the same time last year — a 162 percent increase.

At the current pace of sales, that’s more than a three-month supply and closer to what considered a market equilibrium at a five- to six-month supply, Bray said.

New home construction continues to lag, however. For January, 27 building permits for single-family homes were issued in Mesa County. That’s less than half the 63 permits issued the same month last year.

The median price of homes sold in January was $362,000. That’s 2.9 percent less than the same month last year.

The year-over-year decline in the median sales price was the first in more than a decade, Bray said. “It’s noticeable in the swing.”

In contrast, prices increased on a year-over-year basis 28 percent in January 2022 and 14 percent in January 2021, he said.

Mortgage interest rates almost doubled between January 2021 and January 2022. But since peaking at 7.5 percent, rate have dropped to around 6 percent on 30-year loans, Bray said.

Bray and Young said they expect rates to move even lower as the Federal Reserve takes less aggressive actions to slow inflation. On Feb. 1, the Federal Reserve Open Market Committee boosted the federal funds rate by a quarter percent. That followed an increase of a half percent in December and four straight increases of three-quarters of a percent in 2022.

Bray said trends suggest the Mesa County real estate market could heat up in coming months along with the spring weather. Potential buyers should prepare now for opportunities, he said.

Young also said she expects activity to increase as interest rates relent. Demand remains strong, but affordability remains an issue for some buyers.

Property foreclosure activity continues to increase in Mesa County, Young said.

For January, 21 foreclosure filings and four sales were reported. That’s up from six filings and one sale for the same month a year ago.