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MailTribune.com
  • A Rogue Valley real estate price boost of 20 percent?

    A national firm says it's likely by the end of 2013 in Medford area, but a local expert is more cautious
  • A national real estate monitoring firm says Jackson County appears to be on its way out of its long nightmare of declining home values.
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  • A national real estate monitoring firm says Jackson County appears to be on its way out of its long nightmare of declining home values.
    Fiserv, which provides information to the international financial services industry, predicted the Medford area would have the second-fastest increase in home prices — more than 20 percent — in the nation through 2013.
    The prediction was part of an overall positive report on the nation's real estate market by Fiserv, which monitors home prices in more than 380 U.S. markets. Fiserv listed results for Medford, but they actually represent the metropolitan statistical area, which includes all cities in Jackson County.
    Fiserv's report noted the current median price locally is $144,000, which it said represents a 37.1 percent drop since the real estate market peak.
    It predicted however, that the Medford area would show a 20.1 percent increase in home prices between now and the end of 2013.
    Fiserv's prediction put Medford in a CNN report, "Where home prices are rising fastest," which listed the top 10 cities nationally in the rising price forecast.
    Medford trailed only Madera, Calif., in the CNN report. Madera is in California's central valley and has suffered a 53 percent loss in home values since the market peak. The Fiserv report forecast a 21.5 percent increase over the next two years for that area.
    Colin Mullane, a spokesman for the Rogue Valley Association of Realtors, said homeowners should take the Fiserv numbers with a grain of salt, calling it a "brave prediction."
    "It's possible," he said, "but I'd be cautious in predicting that could happen in that time frame."
    Mullane, a real estate broker at Full Circle Real Estate in Ashland, noted the near historically low interest rates make home ownership more affordable for people, but also noted that lenders and appraisers remain cautious after being burned by the huge run-up in prices in the early 2000s.
    He said few appraisers would be likely to propose a 20 percent increase in values for a higher priced home, although it could be more likely for lower priced homes.
    Despite his caution, Mullane said the Rogue Valley real estate market is showing signs of heating up, primarily because of a huge drop in inventory.
    Mullane noted that in July 2007 there were 3,341 homes on the market locally. The most recent numbers showed that cut by nearly two-thirds, with 1,141 homes for sale.
    He said demand has been fairly constant over the past several years — up by perhaps 10 percent this year — but that the enormous drop in inventory has led to some quick sales.
    He noted a house listed in Ashland for $359,000 immediately received three full-price offers and had another 12 to 15 interested buyers. A lower priced home listed at $204,000 brought in three all-cash offers — and they needed to be all cash he said, because lenders wouldn't have approved a loan at that price.
    "There's so little (inventory) to choose from, those buyers are really driving the market," Mullane said.
    He said the prediction of 20 percent increases in sale prices certainly could happen for individual homes, most likely in the lower price range. He noted a house in west Medford that sold for $300,000 in 2007 recently resold for $69,000. Homes like that could see significant run-ups in price over the next two years, Mullane said.
    "Some individual properties really took a hit," he said, "and for them it could happen. It's less likely to happen for more expensive homes."
    The Fiserv report predicts that across the United States, home values will rise almost 4 percent a year for the next five years. That comes on the heels of a one-third drop in values nationwide since 2006.
    The Fiserv report said investors will drive much of the value increase, as they snap up bargains, a trend already evident in places such as Las Vegas and Phoenix, Ariz. The company predicted first-time and trade-up buyers eventually will follow.
    The CNN report noted that the Medford area's prospects are constrained by its ongoing double-digit unemployment, but said a continued influx of retirees will help offset that.
    The report attributed the region's "mild Mediterranean-like climate, excellent medical facilities and reasonable cost of living" as factors in making the Rogue Valley "a hot spot among retirees."
    Bob Hunter is editor of the Mail Tribune. Reach him at bhunter@mailtribune.com or 541-776-4460.
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