Trends

December 8-21, 2022 The Business Times News Page 19 Trends

INDICATORS AT A GLANCE n Business filings Contributors Real estate sales slow s New business filings in Colorado, 43,657 in the third quarter, up 14.5 percent from the third quarter of 2021. Opinion Higher interest rates and home prices affecting Mesa County market Phil Castle Business Times Business Briefs Business People n Confidence t Consumer Confidence Index 100.2 for November, down 2. t Leeds Business Confidence Index for Colorado, 39.8 for the fourth quarter, down 1.3. t National Federation of Independent Business Small Real estate activity continues to slow in Mesa County as a combination of higher interest rates and prices make homes less affordable for prospective buyers. The story of the local market has changed, said Robert Bray, as mortgage interest rates and residential inventories have reversed roles. In Almanac Business Optimism Index nearly doubling, interest rates have gone from 91.3 for October, down 0.8. hero to villain. What were low inventories n Foreclosures have nearly doubled, becoming something of a hero in offering more selection. s Foreclosure filings in “Those two characters have switched Mesa County, 18 in places,” said Bray, chief executive officer of November, up from 3 in Bray & Co. Real Estate in Grand Junction. November 2021. Annette Young, administrative coordinator s Foreclosure sales in at Heritage Title Co. in Grand Junction, said Mesa County, 3 in there’s still an unfilled need for housing. But November, up from 0 in until interest rates and prices moderate, sales November 2021. will slow. “The demand is still there, though. n Indexes t Conference Board Employment Trends Index, 117.65 for November, down 1.09. But, obviously, it’s got to be affordable.” Young said 256 real estate transactions worth a combined $110.3 million were reported in Mesa County in November. Compared to the same month last year, transactions t Conference Board Leading Economic Index 114.9 for declined 41.8 percent and dollar volume dropped 35.1 percent. Those were some of the biggest year-over-year proportional October, down 0.8%. declines since the Great Recession in 2008 and 2009, she said. t Institute for Supply Management Eight large transactions accounted for a total of $17.6 million in Purchasing Managers Index November 2022, Young said. They included the sale of Monument for manufacturing, 49% for Ridge Apartments on B 1/2 Road for $6 million, a medical office November, down 1.2%. building on Wellington Avenue for $3.65 million and an industrial n Lodging office building on River Road for $1.63 million. Through the 11 months of 2022, 4,451 transactions worth a total t Lodging tax collections in of more than $1.9 billion were reported, Young said. Compared to Grand Junction, $488,019 the same span in 2021, transactions decreased 21 percent and dollar for October, down 3.84% volume fell 7.9 percent. from October 2021. Young said rising prices have long made homes less affordable, but even more so recently because of higher mortgage interest rates. “Now you’ve added that on top of it.” According to numbers Bray & Co. tracks for the residential market in Mesa County, 181 transactions worth a total of nearly $76.6 million were reported in November. Compared to the same month last year, transactions fell 43.3 percent and dollar volume declined 40.1 percent. Through 11 months of 2022, 3,076 transactions worth a total of more than $1.3 billion were reported. Compared to the same span in 2021, transactions decreased 18.8 percent and dollar volume retreated 5.9 percent. The effects of an increase in mortgage interest rates from Robert Bray 3 percent to more than 6 percent have been dramatic, Bray said. Home prices continue to increase. The median price of homes sold through 11 months of 2022 increased 16.7 percent to $385,000 compared to the same span in 2021. Bray expects the pace of appreciation to change, however. “It’s got to start slowing.” One indicator could be a decline in the proportion of home sales in which the sellers received list price — 97.3 percent in November compared to 98.8 percent the same month last year. One result of slowing activity has been an increase in residential inventory. At the end of November, there were 586 active listings in Mesa County. That’s an increase of nearly 90 percent from a year Annette Young ago that offers more selection to buyers, Bray said. New home construction continues to lag, however, in part because of growing uncertainty among builders and the bankers who lend them money, Bray said. Through 11 months of 2022, 682 permits for single-family homes were issued in Mesa County. That’s down 21 percent from the same span in 2021. Bray and Young both said they expect the market to rebound when interest rates and prices moderate. But that might not occur for another six months to a year or more. Property foreclosure activity continues to increase, Young said. Through 11 month of 2022, 226 foreclosure filings and 44 sales were reported. That contrasts with 25 filings and 18 sales for the same span in 2021. Foreclosure activity could increase further as more loans come out of forbearance, but Young said she doesn’t consider the numbers alarming. F

n Real estate

t Real estate transactions in Mesa County, 256 in November, down 41.8% from November 2021. t Dollar volume of real estate transactions in Mesa County, $110.3 million in November, down 35.1% from November 2021. n Sales

s Sales and use tax collections in Grand Junction, $7 million for October, up 10.4% from October 2021. s Sales and use tax collections in Mesa County, $4.7 million for October, up 8.6% from October 2021. n Unemployment

s Mesa County — 3.8% for October, up 0.4.

Consumer confidence continues to retreat

A measure of consumer confidence continues to retreat on less optimistic assessments of business and labor conditions that could signal recession.

The Conference Board reported its Consumer Confidence Index fell two points to 100.2 in November. Components of the index tracking the current situation and short-term expectations declined.

Lynn Franco, senior director of economic indicators at the Conference Board, said the declines reflect a number of factors.

“The Present Situation Index moderated further and continues to suggest the economy has lost momentum as the year winds down,” Franco said. “Consumers’ expectations regarding the short-term outlook remained gloomy.”

Inflation and higher prices for gasoline and food dampened plans to purchase homes, automobiles and appliances, she said. “The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023.”

The Conference Board, a think tank based in New York, bases the 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.

Less upbeat assessments of current conditions pulled down the Present Situation Index 1.3 points to 137.4. The proportion of consumers responding to the survey upon which the November index was based who described business conditions as “good” rose a half point to 18.2 percent. But the share of those who said conditions were “bad” rose more — 2.7 points to 26.7 percent. The proportion of those who said jobs were “plentiful” rose a point to 45.8 percent. The share of those who said jobs were “hard to get” remained unchanged at 13 percent. Less optimistic outlooks pulled down the Expectations Index 2.5 points. At 75.4, the latest reading signals the increased Lynn Franco likelihood of a recession, Franco said. The share of consumers who expected business conditions to improve over the next six months increased three-tenths of a point to 19.9 percent. The proportion of those who anticipated worsening conditions decreased 1.6 points to 22.7 percent. The share of those who expected more jobs to become available in coming months fell nine-tenths of a point to 18.6 percent. The proportion of those who anticipated fewer jobs rose six-tenths of a point to 21.4 percent. While 17.2 percent of consumers expected their incomes to increase, 16.6 percent anticipated decreases. F

The Business Times U.S. payrolls grow, but more slowly

Payrolls continue to increase in the United States, but at a slowing pace.

Nonfarm payrolls grew 263,000 in November and the national unemployment rate held steady at 3.7 percent, according to the latest estimates from the U.S. Bureau of Labor Statistics.

The payroll gain for October was revised upward 23,000 to 284,000. But the gain for September was revised downward 46,000 to 269,000.

With the latest numbers, payrolls have increased an average of 392,000 a month so far in 2022. But gains have averaged only 282,000 over the previous three months.

For November, 6 million people were counted among those unsuccessfully looking for work. Of those, 1.2 million have been out of work 27 weeks or longer. Another 3.7 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 force participation rate edged down a tenth of a point to 62.1 percent, still below the rate before the onset of the COVID-19 pandemic in early 2020.

Payroll gains for November were spread out among industry sectors. Employment increased 88,000 in leisure and hospitality 45,000 in health care, 23,000 in social assistance and 20,000 in construction. Government payrolls grew 42,000.

Employed declined 30,000 in retail trades.

The average workweek slipped a tenth of an hour to 34.4 hours. The manufacturing workweek shortened two-tenths of an hour to 40.2 hours.

Average hourly earnings rose 18 cents to $32.82. Over the past year, hourly earnings increased 5.1 percent. F December 8-21, 2022 Labor index falls

A monthly index tracking labor trends in the United States continues to decline, forecasting slower job growth.

The Conference Board reported its Employment Trends Index fell 1.09 points to 117.65 in November. Six of eight components of the index retreated.

“While the index remains at a high level, it’s downward trend signals slower job growth ahead,” said Frank Steemers, senior economist at the Conference Board. F