Mesa County residential real estate experienced a 9% jump in median prices in 2019 and continued low housing inventory means prices will likely climb again in 2020, local experts say.
Area realtors believe the price increases thus far have been relatively steady since recovering from the last recession and believe that trend will continue.
“We want to continue to be affordable and affordable to outside markets,” Bray Real Estate Development Coordinator Kevin Bray said.
While areas on the Front Range of the state saw median prices increase by double digit percentages multiple years in a row, Mesa County’s increases have been more incremental and it remains a robust market while the Front Range has slowed a bit.
“I think we’ll continue to grow,” Metro Brokers Grand Junction President Deedee Hansen-Simpson said. “Prices will continue to increase pretty steadily but not rapidly. I think the growth rate is sustainable.”
The increase in median prices is driven by the lack of inventory as the county currently has a two-month supply of homes, according to December numbers released by Bray Real Estate. Inventory is based on how many homes are on the market compared to sales and how long it would take to exhaust the supply if no new homes hit the market. Inventory numbers are as low as one month for homes priced between $100,000 and $299,000.
December 2019 ended with just 585 homes on the market, the lowest total for any month dating back to 2013. December typically has the lowest inventory for any month of the year, Bray said, noting more listings hitting the market in January.
Marjorie Genova, a broker with RE/MAX 4000, has served as a director with the National Association of Realtors and said that inventory is low across the country, based on her conversations with other realtors. The shortage, she said, is likely due to an increasing population and low interest rates — 3.875 for a 30-year loan to close out 2019 — which leads to more home buyers.
“Inventory is very low compared to what it has been,” Genova said.
The total number of home sales also dropped slightly in 2019, down 3% from 2018. Bray attributes the decrease to supply not keeping up with demand and believes there would have been more sales with more inventory.
Building permits were also down a bit in 2019, which didn’t help inventory. At year’s end, 717 permits had been pulled, an 11% drop from 2018, but still the second-highest number since 2008.
Bray believes that number will increase in 2020 if Mesa County has a milder winter than last year.
There are also multiple projects underway that will bring in hundreds of new homes to the Grand Valley over the next year. One such project is the Quail Meadows subdivision currently under construction near the intersection of 26 and I roads. The development will bring in 14 new homes in 1-acre lots. There are also several other large developments, particularly in the north parts of Grand Junction.
Bray added that the price increase has helped spur renewed interest in multi-family homes and the Grand Valley will see some new apartments come online in 2020, including the 200-unit Railyard at Rimrock project near the Rimrock Marketplace.
Hansen-Simpson says she still notices a number of people relocating from the Front Range or another more expensive area to buy a nice home in Grand Junction, which has helped keep buying interest high. Good health care options and outdoor recreation opportunities are also a big draw.
With this, she said it’s a good time to sell a home, but buyers need to be alert as sales happen quickly.
“Someone else is looking for the same nice home,” she said. “It keeps the buyers on their toes.”
But even with high interest, Genova says that home buyers are still buying smart and not overpaying for homes. This means sellers need to price appropriately if they wish to sell their house.
Overall, she said 2020 should be another strong year for residential real estate.
“Realtors are looking forward to 2020 and it’s a great time to put a house on the market, but you have to be realistic with price,” she said.
