A Happy(ish) Real Estate New Year

A Happy(ish) Real Estate New Year

By Mike Jackson – Western Colorado Realty.com – Hotchkiss and Paonia

Happy New Year!   As I write this, with snow and darkness falling on the shortest day of the year, I am reminded of the changing season.  People often ask about the seasonality of real estate sales and if the market is “dead” during the winter.  The answer is simple – it depends.  2015 started off with briskly with the best first-quarter sales in years, partly because it was atypically warm and dry.  With demand from front-range buyers increasingly impacting our area it helps when I-70 is reasonably drivable and the skies here are blue.  And while it is certainly true that home buying has a seasonal component, it pales compared to the cyclical influences.  Stated simply, it’s easy to sell property in the winter during a real estate boom and nearly impossible when it’s a bust.  In February 2010 there was exactly one home sold in the entire North Fork area – a $50,000 home in Hotchkiss, compared to $600,000 in 2015 and $800,000 in 2014.  So, with the market back in an up swing, it will be interesting to see how fast this year starts out.

It’s nothing like 2005 was, but sales in 2015 were the best since 2008 and the start of the “great recession”.  Residential sales volume in the North Fork area topped $91M versus $74M the year prior, a healthy 22% increase, even as the median price was nudged just 5% higher to $160,000.  Delta grew 30% with median price up 2% to $147,250 and Surface Creek rose 17% on a 6% bump in the median to $164,500.  Stronger demand, leading to higher sales and lower inventory should combine to push up prices this year.  Of course all bets are off regarding price increases if local coal job layoffs put more homes on the market than can be absorbed.  So far the industry’s weakness has not had a significant impact but this could be the year that changes.  Hope not.  Another sign of improving demand was an increase in sales of vacant lots and land.  Countywide, land sales rose 40% to $10M but prices were soft, falling in the Delta and Surface Creek areas and up only 5% in the North Fork on an impressive 75% jump in volume.  Delta reported the largest increase (170%) but the figures included the sale of the Westwinds Airpark and 166 acres adjacent to Blake Field both of which perhaps should have been recorded in other categories.  Similarly, North Fork volume included a $500,000 sale of 295 acres on Bull Mountain that had been on the market almost 4000 days!

Commercial property sales are correlated to the strength of the local economy and suffered from that weakness in 2015 dropping 50% to just $3.8 million total for the county.  Results were highly variable with North Fork sales doubling to $1.8M with most of those sales occurring along Bridge St. and Grand Avenue.  Delta was essentially flat – if the Valley View shopping center and the “marble depot” sales from 2014 are subtracted, and while hard to believe, the Surface Creek area posted NO commercial sales through the local MLS for all of 2015!  Farm and ranch sales also tend to fluctuate significantly and last year was no exception.  Overall sales were down 30% to $17.5M with $13M (75%) of that occurring in the North Fork – including the $3.0M sale of 1700 acres and a partially finished lodge along upper reaches of 3100 Road.  The grand total of sales posted was $123,000,000, up 17% from the year prior and the highest level since 2008.  The increase may not be reason to enough to send Champagne corks flying but it is an improvement in what has proven to be a long, slow recovery.