Q: How do you define an upper-end, single-family residence these days?
A: Typically it's defined by the price range. Anywhere in Jackson County, it's a house over a million dollars. With prices what they are now, you can even start at $800,000. Truthfully, the amenities you see in high-end properties on the market are a lot more than what you've seen in the past. They have larger lots, and it's not unlikely to find outdoor kitchens or a swimming pool. To compare apples to apples, you have to have some of those nice amenities. Properties that were selling for $1.7 million three years ago are now at $1.1 million. I think it's been a fantastic change for buyers.
Q: How much has that definition changed in the past five years?
A: Back then, houses were fetching a lot more, and sellers were getting considerably more for the same product. The value of the dollar was different, too. Five years ago, if you were spending $1.2 million, you were getting something phenomenal. I would think there are dozens, as opposed to a handful, on the market like that now. Some were by developers who built really wonderful estates, but their business or trade is not bringing in as much now. Other people are downsizing after building incredible properties five or 10 years ago. Their kids have left, and they don't need those properties. With others, the operating costs — utilities, landscaping, the pool person — are such that they are not in position to hire people to care for those properties. Buyers and sellers may feel like they are taking a hit now, but it's a wash when the seller goes back into the market. I've had some people who could have sold for $1.2 million or $1.5 million but sold for less because they knew they could get more buyers. It's not necessarily financial stress; rather it's been a financial strategy. They may not realize the appreciation that they would've had, but they can spend (the proceeds) on two or three properties with more highly motivated sellers.
Q: What is different about the way high-end buyers pursue a residence as opposed to mid-market buyers?
A: From my experience, a lot of times, they are more financially driven and want more bang for buck. The mid-range seems to respond more emotionally; they don't get caught up with price per square foot, the amenities or their return on investment. High-end buyers have the money, and that's a big motivator. They have more power, they are not emotional and will pay what makes sense to them. There is more mid-market inventory, and it takes longer to look at. The higher-end buyer tends to know what works or doesn't work for them. It's not uncommon for them to look at a half-dozen properties and then make decision. They eliminate a lot just looking at pictures.
Q: Is Southern Oregon getting less attention from long-distance buyers than in the past?
A: I'm contacted regularly through my website, and eight out of 10 times it's from someone out of the area. Some of them have always wanted to be in the Rogue Valley but couldn't afford it. Now they are able to afford to get into the market. People who fell in love with the market 10 years ago when it was untouchable are now making the move. They are coming in educated about the property, that's for sure.
Q: What is the state of repair in high-end properties?
A: It depends on each individual seller. Some people have owned their homes 50 to 60 years and are now going into assisted living or are struggling financially. If they aren't personally in tip-top shape, then it's pretty common to see those properties let go. Often times, it's overgrown landscaping. But a lot of them take great pride and know if their house shows well, there will be a greater return. Another factor is that lenders are not loaning to just anyone; they want to know the condition of the property. People paying over a million dollars for a house aren't necessarily paying crash. Appraisers have scrutinized properties more in the past two years than ever. The stereotypical investor is not buying, but homeowners who have realized appreciation are taking their return and reinvesting it not just in a single property. A lot of the houses are financed because with rates at 5 percent, why wouldn't you? If you netted a million from the sale of your house, you could spread it out into five properties for $200,000 each.
Q: Do unique or quaint personal touches applied by original owners make the properties harder to sell?
A: In the upper-end market, that has little impact. The buyers know paint is paint and carpet is carpet, and it just takes money to change things. First-time buyers don't have the money to remodel or unquirk things. The buyer may think they have leverage, but honestly anything can be changed short of location. What sellers have to be careful of is if there are a dozen other similar houses, then they will make lists of things they have to change to remove the quirkiness. But if the buyer can't find something darn close, then they will make it work.
Reach Mail Tribune business editor Greg Stiles at 541-776-4463 or e-mail firstname.lastname@example.org.