Posted: July 01, 2008
Who Owns Colorado: Grand Junction
Grand Junction weathers slowdown after boom timesBy David Lewis
The home-sales outlook in Grand Junction and its satellite towns of Fruita, Clifton, Palisade, Mack and Loma seems to be teetering away from optimism these days, a strange sensation in a market that has been so robust for so long.
Do the numbers lie? Real estate sales in Mesa County dropped 29 percent in the first quarter 2008 from first quarter 2007. Single-family home building permits fell 44 percent in first quarter 2008 compared with the year before. The county in February issued 42 single-family permits, the lowest monthly tally since February 1993, according to a study by Grand Junction-based Stewart Title.
Nor was this dismal third-quarter performance a freak: In fourth-quarter 2007, real estate sales fell 20 percent; dollar volume dropped to $368 million from $414 million; and single-family building permits declined 21 percent from the same period in fourth-quarter 2006, Stewart Title reported.
These are devastating-looking numbers. In March, Stewart Title district manager Bob Reece declared: Grand Junction home ownership now was demonstrably more expensive than home ownership in Denver or the United States overall; and, while middling-costly houses continued to sell, the upper realms were under a strain.
Finally, Reece asked a keen question: With the local economy so good, "Why is the real estate market limping along?"
One answer might be that, perhaps contrary to the evidence, many Grand Valley real estate people don’t believe the market is limping along.
Rather, "It’s still good. Not as good as it was last year, but it’s still very good," says Marie Ramstetter, broker with Grand Junction-based Pavlakis Realty and listing broker for Gold Lake Estates, a "large-lot" development close to Mack.
"The last three years have been really hopping around here, and now there’s a lot of new building that has been going on, a lot of new subdivisions; so there’s a lot more on the market now. But I don’t think there’s anyone around here having a real problem selling anything," Ramstetter says.
The slowdown, they say, is only slow compared to the recent overheated market.
"Price has pretty much leveled off, is what has happened," says Ann Hayes, broker associate with Coldwell Banker Homeowners Realty and chairwoman of the Grand Junction Area Realtor Association. "The last three years we have had extremely strong appreciation of 14 percent to 16 percent."
In 2008, "We will be back down to a more normal appreciation of 6 percent to 8 percent appreciation, just because the high volatility of the purchasing has settled down," Hayes predicts.
Grand Junction real estate people blame much of the slowdown on the slowdown somewhere else.
"We have slowed down some, not because we don’t have a lot of good buyers in the area. We do, but they come from areas where their houses are not selling and so they are kind of stuck in place," Hayes says. "And that has created a slowdown."
On the gloomier side is LeAnn Fisher, sales coordinator for FamFirst Home Builders. "We definitely are in a lull right now," she says.
Sales of FamFirst’s Red Tail Ridge II development picked up in March, then slowed in April and cratered in May. "It was great guns like three weeks ago. People were coming through the houses like crazy, and then it was just like somebody turned off the faucet," Fisher says.
"That definitely is a sign of the times. Plus the weather has played a lot of a part in this. It has been crappy weather here. It has been cold and people don’t get out," she says.
Grand Junction real estate people indeed blame the weather for much of the slowdown.
"We had a tough winter this year, unusual for us, and it really slowed things down," Hayes says.
Grand Junction home builders usually can work pretty much year-round, but this year the frost was too deep.
But then a home-building respite might not have been such a bad idea. Meantime, even Grand Junction’s gloomier real estate people have faith in the market’s underlying economic strength.
"So many people, their businesses are going great guns. They are busy to the max," Fisher says. "It seems like everybody is doing well — it is amazing me — everybody says, ‘Yeah, we got lots of stuff going on.’"
"There are a lot of ‘help-wanted’ signs around town," Hayes says with a laugh.
David Lewis is a freelance writer based in Denver.