2022 Was a Tough Year for Western Slope Real Estate | Business

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

“I think people went into shock,” Sechrist said. “In my history, I have never seen interest rates go from 3, 3.5 to 6.5 overnight. We warn people about this, those of us who have been in the industry and have been through three or four of these downturns in our career. We told people, ‘Look, these interest rates aren’t going to last,’ but they did because they’re rigged.

“They are not a market rate; They are manipulated by the Federal Reserve. They kept interest rates artificially low and then all of a sudden inflation hit, the recession in the economy, so we’re going to try to correct inflation by raising interest rates from 3.5 to 6.5 overnight. … If you just look at interest rates, people will pull out because they’re shocked.”

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

Inventory last year recovered from a pandemic-induced drop. In July, Mesa County’s inventory exceeded 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 some factors as to why he thinks that happened.

“In the last two or three years, builders and contractors have gone crazy; there are no days off, seven days a week, their subcontractors, their plumbers, their roofers work Saturdays and Sundays,” Sechrist said. “You can drive through these subdivisions and see the guys putting up roofs on a Sunday afternoon. I think what happened is that prices went up and the market contracted, so some builders pulled back. One of the reasons they pulled out is that they weren’t sure of the market. I think there’s still that uncertainty.”

In addition, 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 for avoid snowfall damage and an overall slow construction process.

He also cited builder burnout, as well as labor shortages of assemblers, roofers, masons, plumbers and electricians. He said that he knows remodelers that are booked through June and July.

In 2022, 254 Mesa County properties sold for $199,999 or less and 72 sold for $1 million or more. Additionally, 182 properties were 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 goes in the market, the fewer buyers, and that’s Grand Junction,” Sechrist said. “A lot of the buyers on the higher end, let’s call the $750,000+ high end, might be custom home buyers whose home never comes on the market, have hired a builder, and build a home and close on it. and move. The same with more than a million. The lower the price, the more buyers in that income range to buy that type of home.”

December 2021 presented a more active real estate market than historically, with 352 properties sold. Last December he presented a return to normality, with 173 properties sold in the month, a decrease of 51%.

Sechrist said this means the county’s return to its usual seasonal market, an expected dip in activity through the holiday season and July, rather than the “stupid market” of 2020 and 2021 that can largely be attributed to the coronavirus pandemic. COVID-19. .

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

HOW OTHER COUNTIES COMPAREIn Delta County, the overall median home price decreased 11% between 2021 and 2022, with a year-end median home price of $319,500. In total, 549 residential properties were sold in the county, 22% less than in 2021 (705).

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

However, the trends were much more dynamic in Garfield County. Sold listings declined substantially in each of the county’s six major markets, 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 where the median home price declined in 2022 (down 3% to $243,000).

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

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

Overall, though, he believes real estate is headed in the same direction not just on the Western Slope but across Colorado and the nation.

“From the point of view that you have low inventory, all markets have low inventory, all markets have seen their median price go up, all markets have seen the last six months of the year affect their year-end closes. , so that has decreased,” Sechrist said. .

“If you look around the state, the same thing has happened. I don’t know if there’s a pocket in the state that just shot up; It has stayed up without having any adjustment. I also think part of this adjustment in these prices that we’ve seen and are seeing is that we’re removing the fluff from the market where sellers say, ‘Hey, my neighbor got $525,000, so I’m going to ask for $575,000 or $550,000 for mine.’ Look, the market value of him is $525,000, so if he puts a price on it at $550,000, he won’t get it. Now is the time to get the fluff out if he needs to sell and sell for $525,000.”

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

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

“We are seeing increased activity right now. I’ve talked to a couple of good lenders that I work with in the city and they say their applications are in, their calls are in. We are beginning to breathe a little air in the real estate market”.

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

“Sounds like a sales pitch, but don’t wait for prices to crash, don’t wait for foreclosures to skyrocket, don’t wait for interest rates to drop from 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.”