News Trends Contributors Fewer deals, more dollars Opinion Business Briefs Business People Almanac
June 9-22, 2022
The Business Times
Page 19
INDICATORS AT A GLANCE
n Business filings
t New business filings in Colorado, 43,780 in the first quarter, down 2.1 percent from the first quarter of 2021.
n Confidence
t Consumer Confidence Index 106.4 for May, down 2.2. t Leeds Business Confidence Index for Colorado, 53.9 for the second quarter, down 4.1 n National Federation of Independent Business Small Business Optimism Index 93.2 for April, unchanged.
n Foreclosures s Foreclosure filings in Mesa County, 16 in May, up from 2 in May 2021. t Foreclosure sales in Mesa County, 0 in May, down from 2 in May 2021.
n Indexes
t Conference Board Employment Trends Index, 119.77 for May, down 0.83. t Conference Board Leading Economic Index 119.2 for April, down 0.3%. s Institute for Supply Management Purchasing Managers Index for manufacturing, 56.1% for May, up 0.7%.
n Lodging
s Lodging tax collections in Grand Junction, $411,158 for April, up 84.1% from April 2021.
n Real estate
t Real estate transactions in Mesa County, 520 in May, down 5.3% from May 2021. s Dollar volume of real estate transactions in Mesa County, $236 million in May, up 27.6% from May 2021.
n Sales
s Sales and use tax collections in Grand Junction, $6.6 million for April, up 6.6% from April 2021. s Sales and use tax collections in Mesa County, $4.5 million for April, up 4.6% from April 2021.
n Unemployment t Mesa County — 3.3% for April, down 0.6. t Colorado — 3.6% for April, down 0.1. n United States — 3.6% for May, unchanged.
Real estate trends diverge, but Mesa County market healthy overall Phil Castle
The Business Times
Even as rising interest rates on mortgages and seasonal slowing curtail real estate transactions in Mesa County, higher prices and big commercial deals push the collective dollar volume upward. While 2022 might not keep pace with a record-breaking 2021, the market remains strong overall, local industry observers say. “It’s still a healthy market,” said Robert Bray, chief executive officer of Bray & Co. Real Estate based in Grand Junction. Annette Young, administrator coordinator at Heritage Title Co. in Grand Junction, said the latest numbers constitute a case in point. “I think that was a pretty solid May.” Robert Bray Young said 520 real estate transactions worth a total of $236 million were reported in Mesa County for the month. Compared to May 2021, transactions declined 5.3 percent even as dollar volume surged 27.6 percent. Just 24 transactions accounted for a collective $43 million, Young said. That included the sale of one commercial office building on Horizon Court in Grand Junction for more than $6.3 million and another Annette Young building on Horizon Court for $3.1 million. A hotel on Horizon Drive sold for $5 million. Through the first five months of 2022, 2,195 transactions worth an accumulative $940 million were reported. Compared to the same span in 2021, transactions fell 8 percent and dollar volume rose 16.5 percent. Ninety-one transactions in 2022 accounted for a total of $180 million, Young said. According to numbers Bray & Co. tracks for the residential real estate market in Mesa County, 322 transactions worth a total of nearly $139 million were reported in May. Compared to the same month a year ago, transactions retreated 10.3 percent and dollar volume advanced 3 percent.
For the first five months of 2022, 1,424 residential transactions worth a total of more than $594 million were reported. Compared to the same span in 2021, transactions dropped 11.3 percent and dollar volume climbed 5 percent. Bray said rising interest rates on mortgages have affected transactions. The difference would be more profound, he said, except nearly half of transactions involved cash rather than financing. Moreover, some seasonality has returned to the Mesa County market, he said. May closings reflect transactions in March and April and what’s usually a slower time of year. Fewer sales helped bolster inventory. At the end of May, there were 365 active listings. That’s up 68.2 percent over the same time a year ago. That means more selection for buyers, Bray said. Prices continue to rise, however. The medium price of homes sold during the first five months of 2022 climbed to $380,000 up 19.1 percent from the same span in 2021. Given the prospect of even higher interest rates affecting the ability of some buyers to obtain financing, Bray said he expects residential activity to continue to slow. Prices will continue to rise, but at slower pace, he said. Commercial activity typically lags behind residential activity and likely will remain strong, Bray said. Meanwhile property foreclosure filings continue to increase in Mesa County. Young said 16 foreclosure filings were reported in May, bringing to 120 the filings through the first five months of 2022. In contrast, there were eight filings during the same span last year. Filings have increased since the forbearance imposed as a result of the COVID-19 pandemic ended, she said. A lot of those filings will be withdrawn, however, as owners with equity sell before the foreclosure process is completed, she said. The four resales of foreclosed property during the first five months of 2022 constituted less than 1 percent of all transactions, below the 10 percent threshold Young considers indicative of a healthy real estate market. F
Consumer Confidence Index retreats A measure of consumer confidence has retreated on less upbeat assessments of business and labor conditions. The Conference Board reported its Consumer Confidence Index fell to 106.4 in May, down from a revised 108.6 in April. Components of the index tracking current conditions and the short-term outlook declined. Lynn Franco, senior director of economic indicators at the Conference Board, said consumers don’t foresee the United States economy improving in the months ahead. “They do expect labor market conditions Lynn Franco to remain relatively strong, which should continue to support confidence in the short run.” Consumers also said they were less likely to purchase such big-ticket items as homes, cars and major appliances as well as go on vacations. Inflation and rising interest rates remain concerns, Franco said. “Looking ahead, expect surging prices and additional interest rate hikes to pose continued downside risks to consumer spending this year.” The Conference Board bases its Consumer Confidence Index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity.
For May, less upbeat assessments of current business and labor conditions pulled the present situation component of the index down 3.3 points to 149.6. The proportion of consumers responding to the survey upon which the May index was based who described business conditions as “good” rose three-tenths of a point to 21.1 percent. The share of those who said conditions were “bad” fell 1.5 points to 20.7 percent. The proportion of consumers who said jobs were “plentiful” declined three points to 51.8 percent. The share of those who said jobs were “hard to get” advanced 2.4 points to 12.5 percent. Less upbeat outlooks pulled the expectations component of the index down 1.5 points to 77.5. The share of consumers who said they expect business conditions to improve over the next six months fell nine-tenths of a point to 17.7 percent. The proportion who said they anticipated worsening conditions rose 3.2 points to 24.9 percent. The share of consumers who said they expect more jobs to become available edged up a tenth of a point to 18.5 percent. The proportion of those anticipating fewer jobs fell 1.1 points to 18.7 percent. While 19 percent of consumers said they expect their incomes will increase, up 1.2 points, another 14.5 percent said they expect their incomes to decrease, up 1.3 points. F
