Recently purchased Medford home just one example of changes in the housing market
For $43,300, you'd hardly expect to be able to buy a house.
Paul Grout paid that much for a two-bedroom, one bath fixer-upper on Jeanette Drive in west Medford on April 8. His new house is one of more than 90 houses on the market in Medford for less than $90,000.
Grout's purchase is in stark contrast to market conditions several years ago, when it was practically impossible to find a house for less than $100,000.
The house has some obvious curb appeal, but it required a lot of work to spruce up, such as hauling away trash, installing a new fence, plenty of fresh paint and other improvements.
"It's been pretty well remodeled," Grout said.
Home prices in Medford have dropped to prices not seen in nearly two decades, deflated by a sluggish economy and a high rate of foreclosures.
"We haven't seen this in years," said Jan Esquivel, a broker with Esquivel and Associates LLC. She said she is working with two clients who are looking for something only in the sub-$90,000 range.
She said some of these inexpensive homes are in relatively decent shape, though most need remodelling or upgrading. Most are wood-frame construction, not manufactured houses.
"A lot of them are good for first-time homebuyers," she said.
An $8,000 tax break that expires this month and other incentives make such houses particularly affordable for some families, she said.
Most of the homes in the lower price range are 1,000 square feet or less, though some offer more space. They typically have two or three bedrooms, and one bath.
The downward trend in real estate prices isn't confined to low-end houses. Esquivel said homes that were selling in the range of $160 to $180 per square foot range are now sometimes go for $80 to $85 a square foot.
Though most of the cheaper homes are located in west Medford, there are some for sale below $90,000 in east Medford. One two-bedroom, one-bath home on Hill Way is selling for $70,000.
Despite the appealing prices, many of the homes have problems that disqualify them for conventional loans, such as a roof that needs replacing.
Many of the houses are "short sales," which are being sold for less than the amount owed on the loan, but require some negotiations with the lending institution.
In the case of the Jeanette Drive house, the property sold for more than $100,000 in 2003.
The decline in local home prices is likely to continue, as 2,500 adjustable-rate mortgages are expected to be refinanced this year.
Jackson County, which saw a great run-up in home prices and building activity starting nearly 10 years ago, is now one of Oregon's hardest-hit counties for foreclosures, according to RealtyTrac, a company that tracks foreclosures.
The county is tied with Columbia County for the third-highest rate of foreclosures per housing unit in the state, behind Deschutes and Yamhill counties, according to RealtyTrac. In Jackson County, one in every 367 homes faced some kind of foreclosure action in March.
In Oregon, one out of every 491 homes is subject to foreclosure, and nationwide, the rate is one out of every 418 homes.
The hardest hit areas locally are Medford, Central Point and the east county.
Billie Cain, who lives next to the $43,300 house, said she wasn't surprised to learn the house sold for so little. She pointed out that it isn't the best neighborhood in the world, and the previous owners had difficulties.
"I think it was that cheap because it was repossessed," said Cain, 59.
Another house a few doors down is listed at $74,900.
Even though Cain believes her own home is virtually valueless because of fire damage, she's happy prices are going down because it will make houses more affordable for young families.
Reach reporter Damian Mann at 776-4476, or e-mail firstname.lastname@example.org.