Q: Relative to the residential real-estate market, how have rural properties fared?
A: Rural property has not been as active as residential. In towns, there are lots of short sales and bank-owned properties attracting buyers. Owners have more equity in rural properties, and there aren't a lot of first-time buyers. There were fewer no-down and no-document loans on rural properties when that was going on. For a lot of people, when they buy rural properties, they pay it off and don't want a mortgage.
Q: How is the rural market behaving in comparison with the past?
A: It's always less active than the residential market because it is higher-priced. Land, of course, goes at a higher price. Because land values are a bigger part of the package, you don't buy much in the country for $200,000 to $250,000. In town, you can buy a pretty nice house for that. Then there is restrictive zoning. You can only have one house per tax lot, whether it's a half-acre or 100. Most of the inventory is probably between 10 and 20 acres.
Q: What factors led to the historical rise in our region's rural property values?
A: Land-use laws changed in 1973, but it took a few years for it to take hold. As a result, there are reduced supplies. Our weather is a factor, and a lot of it is livability — when you have five to 20 acres, there is a lot more privacy. Fewer neighbors increases livability.
Q: What has been the biggest change in Jackson County's rural property inventory?
A: The median-sized house has probably doubled over the past 20 years. It's not uncommon to have a 3,000-square-foot house now. Before, 1,200- to 1,500-square-foot homes were the mainstay. Of course, there are some real mansions, but it's always been that way. I think the owners were used to nice things and weren't ready to give them up. I don't think it was necessarily competitiveness; it was their own tastes. There's not a commonality with those houses; they were customs.
Q: How does financing for rural property differ from urban settings?
A: You can always count on it ... if you don't need the money, you will get a loan. You've got to have a good credit score and prove you can pay it back. Rural loans involve a straightforward deal and not a creative one. Bare land is a real toughy. Not too many lenders will lend on bare land. What you do is a construction loan and do the whole sum at one time. You pay cash for the land, or the seller will carry the contract until you are able to refinance. It's always been that way. When the seller agrees to be the bank for five years, it's with the understanding they are in first position, and when someone else gets first position, they will get paid off.
Q: Which rural properties have been moving lately?
A: For the most, it's been the lower end in recent years. So far this year, though, it's been a good mix with some in the million-dollar range, some in $500,000-to-$600,000 range and some below. It's a good mix, and that's been encouraging. Most buyers this year are convinced that maybe we're at the bottom of the value decline and now is a good time to get into the market. Before, they were waiting.
Q: What triggers rural property owners to sell?
A: Necessity. Before, you would see some people put their property on the market to see if they could make some money. When they are coming to the country, it's for retirement or a career change. But a lot of times they get homesick for their family. People who live in rural areas, after five or 10 years, they get tired of the upkeep and are looking for an easier way. That could mean going to town or closer to services.
Q: Do you have a feel for what is next for the rural market?
A: When I drive through the country of Jackson County, there is no one item or thing. There is some nice living stock here. I'm telling people the values are 30 to 40 percent less than 2004 or 2005. I can remember the mid-1980s — the last time we had a backward trend — to get a mortgage, you had to pay 12 percent interest. Today, with good credit, you can get it for 5 percent. People are waiting until they feel the bottom is solid. If there is a drop from where we are at, it won't be too drastic.
Reach reporter Greg Stiles at 541-776-4463 or e-mail firstname.lastname@example.org.