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Expert says Grand Valley Market will be soft in 2008

The Daily Sentinel   Saturday, April 26, 2008  by MIKE WIGGINS

Known in the past few years for its rocketing-into-orbit trend in both sales and dollars, the Grand Valley housing market is settling back to earth and giving every indication it will be soft in 2008.

Real estate sales in Mesa County dropped 29 percent in the first quarter that ended March 31 to 1,054 from 1,481 for the same period in 2007, according to a quarterly report produced by Stewart Title Company in Grand Junction.

The first quarter of 2008 marked the seventh consecutive quarter that real estate sales were lower than the comparable period the previous year.

Even though sales have been off, the dollars generated by those sales has continued to hold steady or climb. But even that changed in the first three months of this year, as the dollar amount from sales slipped 8.3 percent from $343 million in 2007 to $315 million this year, according to Bob Reece, who researched and wrote the report and is the Western Slope district manager for the title company.

Reece said the decline in dollar volume is an indicator that properties aren’t appreciating as quickly as they once did.

Building permits for single-family homes, meanwhile, plummeted 44 percent from 327 in the first quarter of 2007 to 183 this year. The 42 single-family permits issued in the county in February were the fewest in a month since February 1993, Reece said.

“It will be a soft year in 2008, there’s no question,” he said. “This is very interesting to watch.”

Reece said the drop-off may come as a surprise to residents because retail sales remain strong and unemployment rates remain low.

“I think we are just waiting either until property values adjust enough that people say ‘I’m going to get in, I’m going to buy,’ or confidence increases to where people say, ‘I know this is going to go up, I’m going to buy now,’ ” he said.

Reece said first-quarter sales and building permits may have been hampered by the colder-than-normal weather the valley experienced. But he said the second quarter will be a harbinger for the market.

“It will tell us anything we need to know about this year,” he said.

E-mail Mike Wiggins at mwiggins@gjds.com.