Experts: Grand Junction real estate future hard to predict
Grand Junction CO, Colorado
GRAND JUNCTION, Colo. ” The Grand Junction real estate market will rise or fall next year, depending on what the energy sector does, said a Realtor who tracks local real estate.
“The fragility of our local economy is becoming quite evident,” said Realtor Dale Beede. “We don’t have the population like Denver and Colorado Springs to absorb it.”
Even though the number of houses sold in Mesa County this year has decreased 25-30 percent, thanks to a softening market, the average price has increased, Beede said.
The average price has increased from $237,028 last year to $252,652 this year, he said.
Beede predicted a continued softening of all sectors of the real estate market through the second quarter of next year.
A fall-off of industrial needs is now in evidence and will continue as the state oil and gas commission announces its new rules, he said.
“If the new rules are not pro-drilling, look for land sales to slow further and industrial construction to drop, a further drop in all real estate,” Beede said.
Bob Reece, a title expert with Advanced Title Technology, said while the energy sector has an effect, it’s not major.
“The biggest sector is the you and me who have all the other jobs,” Reece said.
Reece said the residential real estate trend remains stable at about a 30-percent drop in sales from last year; new home building permits are down 50 percent.
“There’s nothing in the air that says things will get better remarkably in the next six months … some people might project even longer,” Reece said. “My crystal ball is pretty murky these days.”
Both Reece and Beede said people are taking a wait-and-see approach to real estate.
“People are holding still … standing on the sidelines” and watching the market, Reece said.
Still, “banks locally certainly are continuing to loan money,” Beede said. “Nationally, it’s not as easy as it used to be.”
Demand for office space is at a premium, with vacancy at about 5 percent, the lowest in years, Beede said.
Years ago, when Shaw built a new office complex on Horizon Drive, Beede questioned the wisdom. But the building was leased before it was completed, he said.
Industrial property has skyrocketed, but that certainly won’t last, Beede said.
For example, in 2005, unimproved industrial land sold from 28 cents to $2 per square foot. This year, so far it’s averaged $7.29 per square foot, an increase of over 300 percent.
“My friends, this is not sustainable,” Beede said.
“The people that build today to lease to these energy companies stand to potentially lose a lot of money when energy businesses go out,” and when the property owners try to lease the buildings to non-energy companies “at reasonable rates,” Beede said.
“That’s the dilemma we’re in.”
Reach Marija B. Vader at firstname.lastname@example.org.