News Trends Contributors Real estate sales slow Opinion Business Briefs Business People Almanac
November 10-23, 2022
The Business Times
Page 19
INDICATORS AT A GLANCE
n Business filings
s New business filings in Colorado, 39,464 in the second quarter, up 0.5 percent from the second quarter of 2021.
n Confidence
t Consumer Confidence Index 102.5 for October, down 5.3. t Leeds Business Confidence Index for Colorado, 39.8 for the fourth quarter, down 1.3. t National Federation of Independent Business Small Business Optimism Index 91.3 for October, down 0.8.
n Foreclosures
s Foreclosure filings in Mesa County, 20 in October, up from 1 in October 2021. t Foreclosure sales in Mesa County, 2 in October, down from 3 in October 2021.
n Indexes
t Conference Board Employment Trends Index, 119.57 for October, down 1.16. t Conference Board Leading Economic Index 115.9 for September, down 0.4%. t Institute for Supply Management Purchasing Managers Index for manufacturing, 50.2% for October, down 0.7%.
n Lodging
s Lodging tax collections in Grand Junction, $451,679 for September, up 27.8% from September 2021.
n Real estate
t Real estate transactions in Mesa County, 339 in October, down 29.4% from October 2021. t Dollar volume of real estate transactions in Mesa County, $144.3 million in October, down 29.3% from October 2021
n Sales
s Sales and use tax collections in Grand Junction, $6.5 million for September, up 11.6% from September 2021. s Sales and use tax collections in Mesa County, $4.9 million for September, up 15.3% from September 2021.
n Unemployment t Mesa County — 3.4% for September, down 0.2. n Colorado — 3.4% for September, unchanged. s United States — 3.7% for October, up 0.2.
But Mesa County market still showing signs of “surprising” strength Phil Castle
Business Times
Real estate activity continues to slow in Mesa County even as interest rates rise and uncertainty mounts over a possible recession and the aftermath of a midterm election. Annette Young, the administrative coordinator at Heritage Title Co. who’s long tracked the market, said local trends are similar to what’s happening elsewhere. “I think it’s kind of expected when you see what’s going on at a national level.” Annette Young Although the number of transactions and combined dollar volume in Mesa County have dropped compared to a record breaking 2021, the market also shows some signs of resiliency, said Robert Bray, chief executive officer of Bray & Co. Real Estate in Grand Junction. “The strength of the market is still surprising.” Young said 339 transactions worth a total of $144.3 million were reported in Mesa County in October. Compared to the same month last year, transactions decreased Robert Bray 29.4 percent and dollar volume dropped 29.3 percent. While nine large transactions worth a collective $24.5 million bolstered dollar volume in October 2022, 18 transactions accounted for a total of $50 million a year ago. Through the first 10 months of 2022, 4,195 transactions worth a total of nearly $1.83 billion were reported. Compared to the same span in 2021, transactions decreased 19.2 percent and dollar volume fell 5.5 percent. Young and Bray said the trends reflect the rising interest rates on mortgages that have followed government efforts to curb inflation. Bray said the “trifecta” of factors affecting real estate activity also includes expectations of recession and the uncertainty that comes with an election.
According to numbers Bray & Co. tracks for the residential market in Mesa County, 249 transactions worth a total of more than $99.5 million were reported in October. Compared to the same month last year, transactions fell 21 percent and dollar volume declined 13.6 percent. Through the first 10 months of 2022, 2,883 residential transactions worth a total of nearly $1.23 billion were reported. Compared to the same span in 2021, transactions fell 16.8 percent and dollar volume decreased 2.8 percent. The good news, Bray said, is the slower pace of sales has bolstered inventory and in turn selection for buyers. At of the end of October, there were 602 active listings in Mesa County. That’s up 53.6 percent from the 392 listings a year ago. New home construction continues to lag behind last year, however, as higher interest rates and the costs of labor and materials slow building, he said. Through the first 10 months of 2022, 645 building permits for single-family homes were issued in Mesa County. That’s down 18.7 percent from the same span in 2021. Despite the slowdown in sales, home prices continue to rise. The median price of homes sold through the first 10 months of 2022 rose 18 percent on a year-over-year basis to $385,900. It’s a seller’s market, Bray said, with more than 98 percent of homes sold receiving list price. Looking ahead, Bray said he expects real estate activity to continue to trend down and end the year below 2021 levels. Prices could continue to rise, but at a slower pace. But the downturn is different than past shifts, he said. There’s still a shortage of housing and the labor market remains strong. Property foreclosure activity continues to increase in Mesa County, Young said. Through the first 10 months of 2022, 208 foreclosure filings and 41 sales were reported. That contrasts with 22 filings and 18 sales for the same period in 2021. Foreclosure activity has increased in part because forbearance measures are no longer in place. But activity hasn’t yet reached a worrisome level, she said. F
Small Business Optimism Index retreats A measure of optimism among small business owners has retreated on less upbeat expectations. “Owners continue to show a dismal view about future sales growth and business conditions, but are still looking to hire new workers,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business. “Inflation, supply chain disruptions and labor shortages continue to limit the ability of many small businesses to meet the demand for their products and services,” Dunkelberg said. Bill Dunkelberg The NFIB reported its Small Business Optimism Index fell eight-tenths of a point to 91.3 between September and October. The index has remained below its 49-year average of 98 for 10 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 October, seven of 10 components of the index decreased, two increased and one remained unchanged. The portion of NFIB members responding to the survey upon which the October index was based who expect the economy to improve fell another two points. At a net negative 46 percent, more members anticipate worsening conditions.
A net 23 percent of survey respondents reported plans for capital outlays, down a point from September. A net 5 percent said they consider now a good time to expand, also down a point. The share of those who expect increased sales fell three points. At a net negative 13 percent, more predicted decreased sales. Expectations for profits rose a point, but only to a net negative 30 percent. Among those reporting lower profits, 34 percent cited higher materials costs, 22 percent blamed weaker sales and 12 percent pointed to higher labor costs. A net 2 percent of respondents planned to increase inventories, up two points. A net 0 percent reported current inventories were too low, down a point. A net 20 percent reported plans to increase employment, down three points. A net 46 percent reported unfilled job openings, unchanged from September. Asked to identify their single most important problem, 33 percent cited inflation, up three points from September. Another 23 percent the quality of labor and 12 percent taxes. A net 50 percent of respondents reported raising average selling prices, down a point. Price hikes were most frequent in the retail, wholesale and construction sectors. A net 44 percent reported raising compensation, down a point. A net 32 percent said they expect to raise compensation in the next three months, up nine points to the highest level in a year. F
