HOUSING: Tax credits, rural loans could boost local market
Things will get better, that’s the mantra in the Grand Valley real estate industry these days.
“It’s just going to take a little time,” said Bob Reece of Advanced Title Technology in Grand Junction. “The crystal ball question is: How much time?”
For the moment, things are simply going to be slower, Reece said.
Real-estate agents and homeowners who have their houses for sale, though, are looking forward to spring like robins look forward to softening ground and better pickings.
Warmer days tend to beckon to buyers and there are plenty of reasons besides the rays of spring to go house hunting.
Not least of the reasons that real estate professionals expect to see more interest stirring is lower interest rates, especially for loans smaller than $417,000.
So-called “RD loans,” referring to rural development, also could boost interest in the housing market outside the Grand Junction metro area.
That means Fruita, Palisade, Clifton and the rest of unincorporated Mesa County are open for RD loans, which can cover 100 percent of the appraised value of homes, said Dennis Edson, chairman of Unifirst Mortgage in Grand Junction.
In some cases, closing costs could even be folded into the loan, said Erika Doyle, chairwoman-elect of the Grand Junction Area Realtors Association.
“The only place in western Colorado where it’s not available is in the core of Grand Junction,” basically between 19 and 31 roads, Edson said.
Elements of the American Recovery and Reinvestment Act also could buoy the Grand Valley housing market. An $8,000 tax credit available to first-time home buyers during most of 2009 could come in handy for buyers, Edson said.
“We’re going to promote the program pretty extensively,” Edson said. “It just needs to be talked about” and is available to many of the home buyers in the Grand Valley area.
The credit replaces a $7,500 incentive that got little attention, perhaps because the tax break had to be repaid over a period of years, Edson said.
While the energy industry might have driven much of the market, with people moving into the area to work in the natural gas business over recent years, that picture is a bit deceiving.
“The biggest part of the market is ourselves,” people already living in western Colorado, looking for bigger homes to accommodate growing families or others looking to downsize, Reece said.
One thing that seems not to have occurred is an influx of buyers from California hoping to escape the Golden State’s well-documented financial woes, Doyle said.
“We’d love for them to come to Colorado,” Doyle said, “the West Slope in particular.”
California buyers who sold homes in the early 1980s and invested their cash in new Colorado homes played a significant role in the Grand Valley’s economic recovery.
“But that’s just not happening here today,” Edson said.
High-end housing is taking a hit in the Grand Valley market, “but houses under $300,000 are holding up pretty well,” Edson said.
To be sure, said Reece, January sales figures were less than impressive, meaning they looked no better than those of December.
Edson, however, said he detected a slight shift in his company records when he noticed that applications for mortgages were rising slightly.
In recent months, Unifirst was busy mostly with refinancing business from homeowners looking to take advantage of lower rates to save money on their monthly mortgage payments.
Nationally, he said, there have been hundreds of thousands of refinances, and that could add up to a significant economic stimulus that goes largely unmeasured.
While the Grand Valley might now be a buyer’s market, “It’ll be a short-term buyer’s market,” said Eric Perry of Epic Homes.
Whereas he has had as many as five homes under construction at once in the recent past, he said he’s down to one or two these days.
“I’m kind of optimistic that the national economy has turned,” Perry said. “People kind of overreacted. That’s typical of economic cycles and swings.”