2022 a complicated year for Western Slope real estate | Business

Ron Sechrist, an associate broker at Bray Real Estate, spoke to The Daily Sentinel to discuss some of the data in the report, including the drop in overall sales.

“I think people were shocked,” Sechrist said. “In my history, I have never seen interest rates go from 3, 3.5 to 6.5 overnight. We warned people about this, those of us who have been in the industry and been through three or four of these downturns in our careers. We told people, “Look, these interest rates aren’t going to last,” but they lasted because they were manipulated.

“They’re not a market rate; they are manipulated by the Fed. They kept interest rates artificially low and then all of a sudden inflation hit, the economy slowed down, so we’re going to try to fix inflation by raising interest rates from 3.5 to 6.5 overnight. … If you just look at interest rates, people are going to back off because they’re in shock.

The median home price in Mesa County peaked at $416,000 in 2022, but the ending median home price was $370,000, up 6% from the end of 2021 ($350,250).

Last year saw a rebound in stocks after a pandemic-induced crisis. In July, Mesa County’s inventory topped 500 properties for the first time since May 2020. As of the end of December, there were 523 residential properties on the market.

However, building permits fell from 911 in 2021 to 720 in 2022, the fewest since 2017. Sechrist offered a few factors as to why he thinks this has happened.

“Over the past two or three years, builders and contractors have gone crazy; no days off, seven days a week, their contractors, plumbers, roofers work Saturday and Sunday,” Sechrist said. “You can drive through these subdivisions and see guys putting up roofs on Sunday afternoons. I think what’s happened is that prices have gone up and the market has contracted, so some builders have pulled back. One of the reasons they pulled out was that they were unsure of the market. I think there is always this uncertainty.

Additionally, Sechrist said that if builders don’t start building a new home by October or November, they will often wait until February to start the project to avoid increased winter construction costs due to the use of heaters, covering everything to avoid any damage from snowfall and an overall slowed building process.

He also cited builder burnout as well as a labor shortage of carpenters, roofers, stucco masons, plumbers and electricians. He said he knows renovators who are booked in June and July.

In 2022, there were 254 properties sold in Mesa County for $199,999 or less and 72 sold for $1 million or more. In addition, 182 properties sold between $750,000 and $999,999.

However, at the end of December, there were more $1 million properties on the market (37) than properties under $200,000 (26).

“The higher the price in the market, the fewer the buyers, and that’s Grand Junction,” Sechrist said. “A lot of buyers at the high end – let’s call it the high end of $750,000+ – might be custom home buyers whose home never comes to market, they contracted with a builder and they build a house and close it and move in. Same thing at over a million. The lower the price, the more buyers you have in that income bracket to buy that type of house.

December 2021 presented a more active real estate market than in the past, with 352 properties sold. Last December, a return to normal occurred, with 173 properties sold during the month, a decrease of 51%.

Sechrist said that means the county returns to its usual seasonal market – an expected dip in activity during the holiday season as well as in July – instead of the “dumb market” of 2020 and 2021 that can largely be attributed to the COVID-19 pandemic.

“I think 2021 was a bit high, but I think we’re a bit more towards what we call a seasonal market,” he said. “A seasonal market, in the history of real estate, means that on Thanksgiving or somewhere around it, people will retire. If they don’t have to move during the holiday season. .. they won’t sell or buy a house.

HOW OTHER COUNTIES COMPARE In Delta County, the overall median home price fell 11% from 2021 to 2022, with a year-end median home price of $319,500. A total of 549 residential properties were sold in the county, down 22% from 2021 (705).

Montrose County also saw a decline in sales and median price. There were 885 residential properties sold in the county in 2022, down 15% from 2021 (1,038), and the median price at year-end was $354,900, down 7% from compared to 2021 ($381,200).

Trends were much more dynamic in Garfield County, however. Listings sold declined significantly in each of the county’s six major markets, ranging from a 15% drop in New Castle (148 properties sold) to a 53% drop in Parachute (26 properties sold). However, Parachute was the only city in which the median home price fell in 2022 (down 3% to $243,000).

Carbondale, Glenwood Springs, New Castle, Silt and Rifle all saw their median price increase in 2022, with Carbondale rising 40% to $1,175,000. New Castle’s rose 15% to $534,344 and Rifle’s rose 15% to $407,500.

Sechrist said the disparity in some trends on the West Slope is because Montrose may be a “feeder” city for the San Juan Mountains and Glenwood Springs and other towns in Garfield County may be feeder cities for Aspen while Grand Junction and Delta are “nurturing to themselves”. .”

Overall, however, he thinks real estate is heading in the same direction not just on the West Slope, but Colorado and the country as well.

“From the perspective that you have low inventory, every market has low inventory, every market has seen their median price increase, every market has had the last six months of the year affect their year-end closes, so it dropped,” Sechrist said. .

“If you look around, the same thing happened. I don’t know if there’s a pocket in the state that just skyrocketed; it stayed in place without having any adjustment. I also think part of this adjustment to these prices that we’ve seen and are seeing is that we’re taking the fluff out of the market where sellers are like, “Hey, my neighbor got $525,000, so I’m going to ask $575,000 or $550,000 for mine Listen, your market value is $525,000 so if you set it at $550,000 you won’t get it Now is the time to remove the fluff if you have need to sell and sell for $525,000.

Sechrist offered a forecast for the Mesa County real estate market in 2023 based on what he saw and heard in late 2022 and into the new year.

“I think we’re going to see interest rates come down a little bit,” Sechrist said. “I think we’re going to see listings increase because historically, seasonally, people put their property up for sale in February, March, April. We’re going to see signups go up, and if signups go up and the rates go down a bit, you’re going to get an increase in activity, and we’re already seeing that.

“We are seeing an increase in activity at the moment. I’ve spoken to a few good lenders I work with in town and they say their inquiries are up, their calls are up. We are starting to breathe some air into the real estate market.

Sechrist also issued a warning to buyers that if they want to buy, they should not “sit on the sidelines” and wait for particular changes in the market.

“It sounds like a sales pitch, but don’t wait for prices to crash, don’t wait for foreclosures to increase dramatically, don’t wait for interest rates to drop 5.5 or 6 or 6.2 to 4 because they probably aren’t,” Sechrist said. “None of those things are likely to happen in our local market.”