GJ housing market waits for return of jobs
Real estate activity in 2010 could be summarized by one word, according to a report by a Grand Junction title company.
The word? Dismal.
And that is unlikely to change in 2011, said Bob Reece, president of Advanced Title Co., unless the Grand Valley’s employment picture improves. On that front, there is cause for a bit of optimism, said Ann Driggers, president and chief executive officer of the Grand Junction Economic Partnership.
Some Grand Valley manufacturers, in particular those lured to the region in the past 20 years, are beginning to see an increase in hiring.
“It’s more than hope,” Driggers said. “It’s real.”
There also is an “uptick in interest” from companies outside the Grand Valley, Driggers said.
There’s a long way to go to recovery, though, said Reece, who noted real estate sales and the real estate market seem to be closely tied.
Reece went back to 1986 to find a situation roughly comparable to that of 2010. In 1986, with unemployment running at 9.4 percent, there were 2,817 real estate transactions. In 2010, with unemployment at 9.8 percent, there were 2,452 transactions.
During the booming economy of 2006, however, with an unemployment rate of 3.4 percent, there were 7,241 transactions, according to Reece’s research using unemployment figures from the Federal Reserve and real estate figures from the county.
“Once we start to improve the unemployment rate, we’re likely to see the rest of the environment improve,” Reece said.
The likelihood, however, is nothing of great measure will occur over the coming year, he said.
A 2011 that looks a lot like 2010 will include single-family-housing construction moving at a pace one quarter of that of 2006, Reece noted in the Real Estate Report. There were 1,424 permits issued in 2006 and 349 in 2010.
The market for new housing is further depressed because of the 1,580 foreclosures working their way through the system, Reece said.
“Even if foreclosures begin to trend downward, it will be up to a year before a positive effect in the market will be felt,” Reece said.
Grand Valley homeowners have watched the value of their residences rise and fall precipitously, Reece said, noting the median price for all housing types fell to $180,000 as the year ended. That’s down 8 percent from the same period a year previous and 21 percent below the median price of $227,500 in 2008.
Reece said he looked back at his observations as 2010 dawned.
“We forecast that in 2010 interest rates would remain low, foreclosures would remain a bane to the community, speculative building would not improve, price would continue to deteriorate, and jobs would be key to the improvement in real estate activity and firming of real estate prices,” Reece wrote. “All of that forecast should be applicable to 2011.”
Housing waits for return of jobs