Remember 2007 and 2008 when housing prices were soaring upward in double-digit increases. Well, that is not happening now, though our local real estate market is experiencing a slow steady gain based on a variety of indicators.
One indicator of local real estate market confidence is the number of sales, which increased in the first quarter of this year compared to last by 3.6% - up to 721 in 2013 from 696 in 2012. An additional piece of good news to add is that the number of foreclosure sales dropped to 180 from the 2012 number of 230, a decrease of 22% in foreclosed properties sold.
Another sign of market improvement is that the dollar value of all the first quarter real estate sold in 2013 compared to first quarter 2012 increased by 11% - about $145 million compared to $133 million.
While our focus in this column is on residential real estate, it is interesting to note that big commercial sales continue to take place in small but positive numbers. This quarter there were six high-value commercial sales compared to 10 a year earlier.
Realtors and economists often look at median prices as a trend indicator. The median price, middle in a ranked list of sales, was $155,125 for the reporting period; just about the same as a year earlier. As long as 25% of our total property sales are foreclosed properties, as was the case, there will be some lowering influence on overall values from those bank or government-owned properties.
For those of you who have been following local real estate values over the course of the decade, you may already recall the median price in 2008 hit Grand Junction's all-time high at $222,000. While we all want to see continued market recovery, we also hope to not see a bubble like that again, since as real estate, tech stocks and banks have all shown since the dawn of the century that financial bubbles burst.
One trend that has stayed steady over three years of data is the breakdown by price range of sales. From 2011 through this year it has remained consistent that the most houses sold is in the $150,000-$200,000 price range where 21% of the total inventory was priced. Interestingly enough, more homes sold at both the high and low ends of the price spectrum in the first quarter of 2013 than in the same period for the two previous years. In the under $100,000 range 59 properties sold compared to a three-year average of 56. Then in the $500,000 to million dollar range 23 properties have sold this year compared to a three-year average of 18.
In short, a few more positive signs in the local real estate world include:
• Building permits are up with 90 issued so far this year compared with 83 the same period a year ago.
• Foreclosure filings are down 47% this year, more of those filed were withdrawn or cured and the number of completed foreclosures went down by 22%. If this remains the trend, foreclosures will have less negative effect on sales prices and overall values for privately owned/sold properties can be expected to improve.
• On the lending side, there have still been some 15-year mortgage loans available for rates under 3%. Great interest rates, increased property sales and property owners continuing to refinance are all good signs for our improving real estate market.
Author's note: All data used in this column are derived from the MLS and Mesa County Recorder's office. The information has been compiled by Heritage Title Company and generously shared by them for this column. If you wish to receive their quarterly Real Estate Trends newsletter, call 970-241-8555 or email firstname.lastname@example.org.
Doug Van Etten is an associate broker with Keller Williams Colorado West Realty and is also the founder/organizer of the Real Estate Investors Network (REIN). Van Etten has been helping homebuyers, sellers and investors with their real estate needs since 1992. Contact Van Etten at DougVE@kw.com or 970-433-4312. For information on the REIN, info@REIN-WesCO.org.