“May you live in interesting times” might be an apocryphal proverb, but it seems apropo because it has become abundantly clear that, indeed, these are not normal times. Not here, nor there, not anywhere – as Dr. Seuss would say – the real estate boom has enveloped the country. According to the Financial Times the rate of housing-price increase, nationally, has been higher than any time in the previous 30 years with a year over year increase of 15%. That is exactly the same average rate of increase we’ve seen across Delta County – advancing to $345,000 from $300,000 in 2020, and even higher locally in the North Fork area where the average rose 17% to $411,000. In aggregate, countywide sales volume reported through the MLS increased a phenomenal 34% to $340M across all classes (residential, land, commercial, multi-family and farm/ranch) – which came on top of a 25% jump in 2020. For context, in the pre-Covid era of 2018 and 2019, total sales grew about 6% annually when the average home price was well under $200,000. The surge has been truly astounding.
Interestingly, the number of homes sold was virtually unchanged from 2020 – about 700 countywide – but still significantly higher than the average 600 per year sold in ‘18 and ‘19. Like other markets around the state, the inventory of homes for sale is at, or near, an all-time low. The Delta, North Fork, and Surface Creek areas currently have a total of 60 homes priced under $800,000, which is basically a one month supply. Ouch. I have, from time to time, described the depleted inventory as being like a used car lot with just three vehicles for sale, a truck, a mini-van and a sedan – if you don’t like what you see, you’ll just have to wait until something new arrives. When it comes to houses, you’ll have company when it does come along, often leading to a first-day “bidding war”. And, if you’re waiting for a “crash” to bring down prices, good luck – there’s nothing to indicate anything of the sort is on the horizon.
Indicative of the breadth of this boom, sales of vacant land, commercial properties, and farms / ranches all posted substantial sales growth in 2021. Land sales increased by roughly 7% to $27 million with the median amount up by a third, which is solid growth, but nothing like the rush in Farm & Ranch sales which had an astonishing four-fold increase, to $40M from $11M in 2020 (when the Surface Creek and Delta areas combined for less than two million in sales compared to the $20 million posted last year). The North Fork area’s volume doubled from $10M to $20M. Commercial sales also exploded – jumping to $26.5M from $6M in the year prior. Of note locally were the $8M sale of the Smith Fork Ranch and $3M paid for the Grand Mesa Lodge.
The consensus among national real estate analysts is that we should expect prices to increase much more slowly this year – single digit increases in line with the historic average – tempered by buyer fatigue and modestly rising interest rates. Locally, I’m a bit more optimistic given the continued disparity between supply (which is fairly static) and demand that continues to be strong.