Castle Phil, business time
Real estate activity continues to slow in Mesa County as rising interest rates, rising inflation and growing uncertainty dampen demand.
The trend reflects the effects of efforts to rein in inflation and other major economic forces more than excess supply, industry watchers say. And while 2022 is unlikely to keep pace with a banner year in 2021, the market remains healthy.
“It’s still going to be a good year given the long-term outlook,” said Robert Bray, managing director of Bray & Co. Real Estate in Grand Junction.
Annette Young, administrative coordinator for Heritage Title Co. in Grand Junction, said 396 real estate transactions worth a total of $170 million were reported in Mesa County in July.
Compared to the same month last year, transactions fell 33.4% and dollar volume fell 29.7%.
However, large transactions still supported dollar volume, Young said. A dozen transactions totaled $18.6 million, including the sale of a waste treatment facility for $3.8 million, a nursery school and land for $1.9 million and a residence on 40 acres for $1.6 million.
In the first seven months of 2022, 3,089 transactions with a total value of over $1.32 billion were reported. Compared to the same period in 2021, transactions decreased by 15.5%, but dollar volume increased by 1.3%.
Young said rising interest rates on mortgages had affected real estate activity. But so are higher house prices and inflation that has made gas, food and other goods more expensive. “You have that kind of composition, and it affects affordability.”
According to numbers Bray & Co. tracks for the Mesa County residential market, 281 transactions worth nearly $123.6 million were reported in July. Compared to the same month a year ago, transactions fell 29% and dollar volume fell 17.3%.
In the first seven months of 2022, 2,055 transactions with a total value of nearly $873 million were reported. Compared to the same period in 2021, transactions were down 15.6% and dollar volume fell nearly four tenths of a percent.
Bray said the year-over-year declines demand attention, but the comparison isn’t fair given the frenzy in real estate activity last year and the differences in interest rates. interest.
Lower sales bolstered inventories, Bray said. At the end of July, there were 559 active listings in Mesa County. That’s a 57% increase from the same time last year – and a relief for shoppers who until recently were desperate for more choice, he said.
However, construction of new homes is lagging behind last year. The number of single-family building permits issued in Mesa County fell 20.8% to 57 in July and 15.2% in the first seven months of 2022 to 496.
Bray said rising interest rates and uncertainty have also slowed construction activity.
House prices continue to rise. The median price of homes sold in the first seven months of 2022 rose 18.5% to $385,000 from the same period in 2021.
Bray and Miller said they expect real estate activity to continue to slow this year. Inventories will pile up. Prices will not fall, but the pace of increases will slow.
Putting everything into perspective, however, Bray said he remains encouraged. “The market is still healthy there.”
Meanwhile, foreclosure filings continue to rise in Mesa County – but not to the same degree foreclosure sales.
In the first seven months of 2022, 157 foreclosure filings were reported in Mesa County, Young said. This compares to just 13 for the same period in 2021. Fourteen foreclosure sales have been reported year-to-date in 2022, one more than in 2021.
Young said deposits have increased since the end of the forbearance imposed following the COVID-19 pandemic. But many of those deposits were withdrawn as owners with shares sold before the process was complete.
In the first seven months of 2022, there were only four resales of foreclosed properties. Young considers resales at 10% or less of all transactions indicating a healthy market.