Residential and commercial real estate sales in the Grand Valley are down 28 percent from the same time last year, and home sales decreased by 18 percent, lending officials said last week.
“We’ve had eight quarters of declining real estate sales, so that is more than a trend,” said Bob Reece, district manager of Stewart Title Company. “That’s a reality of where we are today.
“We’re feeling the effects of, basically, the overall economy. Lenders across the country have tightened the credit requirement. Even though we’re pretty healthy economically in Grand Junction, we would still be declining in sales because borrowing money is more difficult.”
The number of residential homes and lots sold during the first six months of this year was 2,436, compared with 3,387 for the same six months last year, said Bruce Penny, chief credit officer and senior vice president of First National Bank of the Rockies, citing Mesa County Clerk and Recorder statistics.
Of real estate sales, the number of houses sold in the first six months of 2008 was reported as 1,480, compared with 1,807 at the same time in 2007, Reece said, citing Real Estate MLS statistics, which do not count townhomes and condominiums.
Building permits for the first six months of 2008 came in lower than in the first six months of 2007, Penny said, with the Mesa County Clerk and Recorder’s Office citing just 410 permits pulled this year, compared with 745 for the same time frame in 2007.
The inventory of homes is up versus last year, home building has decreased almost 50 percent and lending is down by 18 percent, in addition to the downturn in real estate sales, Reece said.
Penny predicts total home sales will fall 20 percent shy for all of 2008 compared to 2007.
“If you come off three or four record-breaking years, and you start having a normalized market, you’re going to have some decrease that you’re going to expect,” Penny said. “It’s also attitudes of people not wanting to go out and purchase a home right now, not wanting to upgrade and not being able to sell existing homes as quickly as they could two years ago.
“There are also a lot of people coming here to work in the oil fields or out at St. Mary’s Hospital who probably own homes somewhere else, and they may not have been able to sell yet. It’s all a myriad of factors.”
Concrete can’t be poured unless the temperature is at a certain level, and the weather that swept the Grand Valley this year might have contributed to the decline, he said.
“It’s a pretty dramatic decrease. Right now, the market is subdued,” Penny said. “The real buyers are waiting to see if prices come down.”
They’re starting to. There was a 0.4 percent decline in the median house price, which is now $229,000, Reece said.
“Anytime you have a decline in the number of home sales, you know you’re going to have a softening of prices,” Reece said.
Housing inventory available is at 2,236 houses right now, Reece said. He didn’t have the inventory numbers from a year ago but recalled “it was substantially less.” Property values in Grand Junction went up so quickly in the past few years that the average buyer got reluctant to buy and borrow money, he said.
While some homeowners are reporting decreased appraisals of their properties in the Grand Valley, numbers are showing house values have increased 3.7 percent in the past 12 months, Reece said.
Penny said he sees signs that residential home sales will increase. Namely, an upward trend of residential lot and home buys numbering 493 for the month of June, up from the first quarter where monthly sales were in the 200s and 300s.
“There’s a significant amount of inventory, but there are still a significant amount of transactions,” Penny said.
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E-mail Anna Maria Basquez at anna.basquez@GJSentinel.com.
