Real estate biz showing signs of a comeback
Four years after the recession triggered the first wave in a tsunami of job losses and foreclosures, the Mesa County real estate market posted in the third quarter the strongest indications that it’s recovering, as the number of residential sales and median sales prices climbed to their highest levels in at least two years.
There were 989 sales of all types of real estate in July, August and September totaling $170 million. Compared to the same three months last year, transactions jumped 25 percent while dollar volume increased 19 percent, according to Real Data LLC, a Grand Junction company that tracks all real-estate transactions in the county.
Single family residential sales, which accounted for 81 percent of all transactions, were up 20 percent, from 671 to 804. That’s the most sales in a quarter since 966 homes sold in the third quarter of 2008, and the 293 sales posted in August were the most in a month since September 2008. Residential sales have increased year-over-year in 21 of the last 22 months.
The positive data appear as though they’ll carry over into the fourth quarter, as Adam Hochevar, vice president of Real Data LLC, said preliminary residential sales in October will be up at least 10 percent compared to October 2011.
“I’d say it’s the second quarter of good news, for sure,” Hochevar said. “We saw marked improvement in the second quarter of 2012, which we really weren’t sure if it was going to be a blip or sustain itself. From what we saw in the third quarter, that’s six months of recovery, really.”
Home sales in the county have steadily risen since bottoming out in 2009, largely because prices fell dramatically and interest rates plummeted to historic lows. But now prices, like sales, are on the rise, which Hochevar believes is the greatest indicator of the market gaining strength.
After dropping to $149,000 in the first quarter of the year, sales prices have increased two quarters in a row, with the second quarter marking the first quarterly price increase over the previous quarter in three years. The median sales price in the third quarter reached $168,625, a 9 percent increase over the third quarter of last year. It’s the highest median price since the fourth quarter of 2010, according to Real Data.
Hochevar cited two reasons for rising sales prices. One is that the number of foreclosure sales as a percentage of the total market has fallen. Thirty percent of the homes that sold this summer were foreclosure resales, and while that’s far above the rate in what would be considered a healthy real estate market, it’s below the 35 to 40 percent mark the market saw most of last year, Hochevar said.
Another reason for rebounding sales prices is a decrease in housing inventory. Total active listings fell nearly 13 percent from the same time last year, from 2,284 to 2,066.
Foreclosures remain a stain on the market. There were 313 filings in the third quarter, an 8.5 percent drop from the previous quarter but a 5.4 percent increase from the same time last year.
The 200 foreclosure sales in the third quarter remained unchanged from the second quarter and were down 10 percent from the third quarter of last year.
“Until we really see those (foreclosures) drop, it’s hard to think that we’ve recovered and we’re healthy,” Hochevar said. “But the signs of the last two quarters have showed significant improvement and hopefully it continues.”
For more information, visit realdatallc.com.