Phil Castle, The Business Times
Real estate activity continues to slow in Mesa County as rising interest rates, higher inflation and mounting uncertainty dampen demand.
The trend reflects more of the effects of efforts to curb inflation and other broad economic forces than oversupply, industry observers say. And while 2022 likely won’t keep pace with a record-breaking 2021, the market remains healthy.
“It’s still going to be an OK year given the long-term perspective,” said Robert Bray, chief executive officer of Bray & Co. Real Estate in Grand Junction.
Annette Young, the administrative coordinator at 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 dropped 33.4 percent and dollar volume declined 29.7 percent.
Large transactions still bolstered dollar volume, however, Young said. Just a dozen transactions accounted for a combined $18.6 million, including the sale of a waste services facility for $3.8 million, preschool and grounds for $1.9 million and residence on 40 acres for $1.6 million.
Through the first seven months of 2022, 3,089 transactions worth a total of more than $1.32 billion were reported. Compared to the same span in 2021, transactions decreased 15.5 percent, but dollar volume increased 1.3 percent.
Young said higher interest rates on mortgages have affected real estate activity. But so have higher prices for homes and inflation that’s made gasoline, food and other products more expensive. “You’ve got this kind of compounding, and it affects the affordability.”
According to numbers Bray & Co. tracks for the residential market in Mesa County, 281 transactions worth a total of nearly $123.6 million were reported in July Compared to the same month a year ago, transactions fell 29 percent and dollar volume declined 17.3 percent.
Through the first seven months of 2022, 2,055 transactions worth a total of almost $873 million were reported. Compared to the same span in 2021, transactions decreased 15.6 percent and dollar volume slipped nearly four-tenths of a percent.
Bray said the year-over-year declines demand attention, but the comparison isn’t fair given what was a frenzy in real estate activity last year and the differences between interest rates.
Fewer sales have bolstered inventory, Bray said. At the end of July, there were 559 active listings in Mesa County. That’s a 57 percent increase over the same time last year — and relief for buyers who until recently were desperate for more selection, he said.
New home construction lags behind last year, though. The number of single family building permits issued in Mesa County dropped 20.8 percent to 57 in July and fell 15.2 percent through the first seven months of 2022 to 496.
Bray said higher interest rates and uncertainty have also slowed building activity.
Home prices continue to rise. The median price of homes sold during the first seven months of 2022 rose 18.5 percent to $385,000 compared to the same span in 2021.
Bray and Miller said they expect real estate activity to continue to slow this year. Inventories will build. Prices won’t come down, but the pace of increases will slow.
Putting everything in perspective, though, Bray said he remains encouraged. “The market is still healthy out there.”
Meanwhile, property foreclosure filings continue to increase in Mesa County — but not to the same degree foreclosure sales.
Through the first seven months of 2022, 157 foreclosure filings were reported in Mesa County, Young said. That compares to just 13 for the same span in 2021. Fourteen foreclosure sales were reported year-to-date in 2022, one more than 2021.
Young said filings have increased since the forbearance imposed as a result of the COVID-19 pandemic ended. But a lot of those filings were withdrawn as owners with equity sold before the process was completed.
Through the first seven months of 2022, there were just four resales of foreclosed properties. Young considers resales at 10 percent or less of all transactions indicative of a healthy market.