Trends

OctOber 13-26, 2022 The Business Times News Page 23 Trends Contributors Opinion Phil Castle Business Times Business Briefs Real estate activity continues to slow in Mesa County as a combination of rising mortgage interest rates and home prices affect affordability

Business People Robert Bray, chief executive officer of Bray & Co. Real Estate in Grand Junction, described the change as a shift from a hot Almanac sellers’ market to more of a lukewarm sellers’ market. “It’s moving back to more balance in the marketplace.” The overall market remains healthy, Bray said. Annette Young, administrative coordinator at Heritage Title Co. in Grand Junction, said the outlook depends in part on the possibility of recession. But unlike typical recessions, the labor market remains strong and property values keep rising, Young said. “Those two things are a little different this go around.” Young said 371 real estate transactions worth a total of $164.9 million were reported in Mesa County in September. Compared to the same month last year, transactions declined 27.2 percent and dollar volume fell 19.6 percent. Ten large transactions accounted for a total of $24.2 million, Young said, including the sales of the building housing Tractor Supply for nearly $5.9 million, a medical facility for $3.4 million and an industrial shop and office for more than $2 million. Through the first three quarters of 2022, 3,856 transactions worth a total of nearly $1.7 billion were reported. Compared to the same span in 2021, transactions fell 18.1 percent and dollar volume decreased 2.7 percent. The comparison isn’t entirely fair given the record-setting pace in 2021. But the latest numbers also reflect the effects of

INDICATORS AT A GLANCE n Business filings Real estate slowdown s New business filings in Colorado, 39,464 in the second The Mesa County market shifting, but still remains healthy overall quarter, up 0.5 percent from higher interest rates and prices, Young said. “It’s just kind of a the second quarter of 2021. sign of the times.” n Confidence According to numbers Bray & Co. tracks for the residential s Consumer Confidence Index 108 for September, up 4.4. t Leeds Business Confidence Index for Colorado, 39.8 for market in Mesa County, 279 transactions worth a total of more than $123.5 million were reported in September. Compared to the same month last year, transactions fell 25.6 percent and dollar volume decreased 12.8 percent. the fourth quarter, down 1.3. Through the first three quarters of 2022, 2,628 transactions s National Federation of Independent Business Small worth a total of more than $1.1 billion were reported. Compared to the same span in 2021, transactions decreased 16.6 percent and Business Optimism Index dollar volume retreated 1.9 percent. 92.1 for September, up 0.3. Bray said the market is moving toward an equilibrium and a n Foreclosures Robert Bray more even playing field for buyers and sellers. The slower pace of sales has bolstered residential inventories. s Foreclosure filings in As of the end of September, there were 594 active listings in Mesa Mesa County, 20 in County. That’s an increase of 35.6 percent from a year ago and September, up from 2 in what Bray said was a return to levels last seen in early 2020 before September 2021. the onset of the COVID-19 pandemic. s Foreclosure sales in New home construction continues to lag, Bray said, as builders Mesa County, 14 in face economic uncertainty, higher materials costs and fewer lots September, up from 2 in upon which to build. Through the first three quarters of 2022, 608 September 2021. building permits were issued for single family homes in Mesa n Indexes s Conference Board Employment Trends Index, 120.17 for September, up 1.69. Annette Young County. That’s down 16.4 percent from the same span in 2021. Home prices keep increasing, though. The median price of homes sold during the first three quarters of 2022 climbed on a year-over-year basis 19.3 percent to $389,000. t Conference Board Leading Bray said he expects the pace of appreciation to slow to low Economic Index 116.2 for double digits by the end of the year and some asking prices will August, down 0.3%. come down. Overall, though, prices will continue going up. t Institute for Supply Management Property foreclosure activity continues to increase. Through Purchasing Managers Index the first three quarters of 2022, 188 foreclosure filings and 39 sales for manufacturing, 50.9% for were reported. That contrasts with 21 filings and 15 sales for the September, down 1.9%. same period in 2021. n Lodging Young said foreclosure activity hasn’t yet reached a worrisome level, but could. s Lodging tax collections in Bray agreed. “That’s something to keep an eye on.” Grand Junction, $441,213 F for August, up 2.5% from August 2021. n Real estate Small business optimism index edges up

t Real estate transactions in Mesa County, 371 in September, down 27.2% from September 2021. t Dollar volume of real estate transactions in Mesa County, $164.9 million in September, down 19.6% from a year ago. n Sales

s Sales and use tax collections in Grand Junction, $6.3 million for August, up 6.7% from August 2021. s Sales and use tax collections in Mesa County, $4.5 million for August, up 7% from August 2021. n Unemployment

t Mesa County — 3.6% for August, down 0.3.

A measure of optimism among small business owners has edged up, but concerns persist over inflation, labor shortages and other issues.

“Inflation and worker shortages continue to be the hardest challenges facing small business owners,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business. “Even with these challenges, owners are still seeking opportunites to grow their businesses in the current period.”

The NFIB reported its Small Business Optimism Index rose three-tenths of a point to 92.1 between August and September. Bill Dunkelberg The index has remained below its 48-year average of 98 for nine consecutive months.

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group, most of them small business owners.

For September, the 10 components of the index were evenly split between increases and decreases.

The portion of NFIB members responding to the survey upon which the September index was based who expect the economy to improve over the next six months fell two points. At a net negative 44 percent, more anticipated worsening conditions.

A net 24 percent of respondents reported plans for capital outlays, down a point. A net 6 percent said they consider now a good time to expand, up a point.

The share of those who expect increased sales rose nine points. But at a net negative 10 percent, more said they anticipated decreased sales.

Expectations for profits rose two points, but only to a net negative 31 percent. Among those reporting lower profits, 42 percent blamed rising materials costs and 21 percent cited weaker sales.

A net 1 percent reported current inventories as too low, down two points. The share of those planning to increase inventories fell four points to a net 0 percent.

The proportion of respondents who said they plan to increase staffing rose two points to a net 23 percent. A net 46 percent reported unfilled job openings, down three points from August.

Asked to identify their single most important problem, 30 percent cited inflation. That’s up from 10 percent a year ago. Another 22 percent cited quality of labor and 10 percent the cost of labor.

A net 51 percent of respondents reported raising average selling prices, down two points from August. Price hikes were most frequent in the retail and construction sectors.

A net 45 percent reported raising compensation, down a point. A net 23 percent said they expect to raise compensation in the next three months, down three points. F

U.S. payrolls up, jobless rate down

Labor index rises

Payrolls increased and the unemployment rate retreated in the United States. But the latest monthly job gains were the smallest in nearly 18 months.

Nonfarm payrolls grew 263,000 as the jobless rate decreased two-tenths of a point to 3.5 percent in September, according to the latest U.S. Bureau of Labor Statistics estimates.

Payroll gains for July were revised upward 11,000 to 537,000. The initial estimate for August remained unchanged at 315,000.

With the latest numbers, payrolls increased an average of 420,000 a month through the first three quarters of 2022. Payrolls grew an average of 562,000 a month in 2021. The September gain was the smallest since April 2021.

For September, 5.8 million people were counted among those unsuccessfully looking for work. Of those, 1.1 million have been out of work 27 weeks or longer. Another 3.8 million people were counted among those working part-time because their hours were cut or they were unable to find full-time positions.

The labor participation rate edged down a tenth of a point to 62.3 percent, still below the rate before the onset of the COVID-19 pandemic in early 2020.

Payroll gains for September were spread out among industry sectors. Employment increased 83,000 in leisure and hospitality, 60,000 in health care and 46,000 in professional and business services.

The average workweek remained unchanged at 34.5 hours for a fourth consecutive month. The average manufacturing work week held steady at 40.3 hours.

Average hourly earnings increased 10 cents to $32.46. Over the past year, hourly earnings increased 5 percent. F

A monthly index tracking labor trends in the United States has increased — forecasting continued job growth, but at a slower pace.

The Conference Board reported its Employment Trends Index rose 1.69 points to 120.17 in September.

“Job gains are likely to decelerate from their recent pace as the U.S. economy has weakened as the Federal Reserve rapidly raises interest rates,” said Frank Steemers, senior economist at the Conference Board. F