Q: Given the upward direction of Jackson County's residential real-estate market, do you anticipate more sellers entering the market this summer?
A: Inventories were just a hair higher than a month ago. That means a few more listings have hit the market. In April, there were 615 homes on the market in urban areas. By the end of May, there were 652. That's the first month I've seen an increase in the number of homes for sale for a while. But that still puts you at 39 percent below a year ago. You have to remember, the real-estate report is like the jobs report: We still had sales going forward but not quite as robust as the previous month.
the Jackson County real-estate
market since 1978.
There have been 65 homes withdrawn from the market in urban (incorporated) areas in the past 12 months. The price range on those places went from a low of $64,900 for a condo on Pine Street in Central Point to a high of $2.1 million for a 4,600-square-foot house built in 1910 on Phoenix Drive in Ashland. The median for the group was $209,900.
There are people still unsure, but I'm expecting more for a couple of reasons: Prices are increasing, sales volume is increasing and we're going into the summer selling season.
Q: Will this draw more sellers into market?
A: If they were motivated sellers to begin with, yeah, those people are thinking maybe it's time to get out from under this (mortgage). Of note, on the loans Bank of America still holds, they want to do fewer foreclosures and more short sales. So they are providing incentives for owners to accept a short sale. They are giving homeowners as much as $30,000 cash so they can move on with their lives. Bank of America realized that foreclosure was not in their own, best interest. With short sales, they still lose money but not as much. They are great at making loans, but when it comes to managing real estate, they found out they don't know how to do it. Taking possession is not something they are set up to do. They're not good at it, and it's taken them three years to figure it out.
Q: Will sellers be apt to jump in quickly or gradually?
A: It will be gradual. We're not going to see another 500 houses dumped on the market in the next month. This time, we saw an increase of 40 houses in one month. Maybe it will be 60 houses next time. The big problem for real-estate agents right now is that when a bona fide buyer comes along, they don't have enough houses to show them. That's why we're seeing new construction in Phoenix and Medford. Remember, 45 to 46 percent of urban home sales in our county take place in the city of Medford. There are 256 houses listed for sale in Medford right now. In a normal market, it would probably be twice that number. Houses are priced at anywhere from $50,000 in west Medford to $800,000 in east Medford, but pickings are slim. When you get into the $300,000-to-$500,000 bracket, there just aren't the right houses on the market to attract upscale buyers.
Q: Will we see more lower-end or upper-end houses join the for-sale group this summer?
A: I would think the upper end will increase as selling and asking prices are inching up. People should be ready, making sure the lawn is trim and no peeling paint.
Q: Are there sellers waiting to see how the summer goes?
A: Without a crystal ball, my best guess is that those who wait will end up with higher prices. During the first five months of this year, the median price has increased 5 percent, 1 percent per month. You trend that out, and at the end of the year, we will be up 12 percent. The most recent comparable time we have is the recession of 1980. When you're down in the dumps, you wonder how long it will take to get out. If that earlier pattern repeats by 2014, we'll be back where we started. That's a big increase. But prices have gone up 10 to 12 percent a year before.
Q: Will there be holdouts on the selling side?
A: The majority of people are followers, not leaders. Once they see the market is robust, they'll jump in. When a house went from $500,000 to $250,000 and gets back up to $400,000, maybe they'll move when they think the getting-out is good. As prices go up, we will see more people saying we can get out and get on with our lives. The people really hurting were the retirement homeowners dependent on retirees to sell and move into retirement communities. Vacancies in retirement homes is way higher than what they would like.
Q: What's the single factor that could undercut a rising market?
A: If unemployment numbers inch up, people might get nervous and think about not buying. You have the economic scare in Europe. What goes on in Europe has a drastic effect here. Our auto industry depends on Europeans buying our cars. If they tighten their belts, it will cut car sales and hurt American employment.
Q: What other factors will bring houses to the market?
A: Increasing prices and continued improvement in the market will motivate people to say the time is right. When we were in a decline, everyone was in a funk and couldn't believe what was happening. They took it personally. Now, I think I see more people smiling and saying we're coming out of it. I've talked to a few small-business owners who say they're up over last year.
Reach Mail Tribune business editor Greg Stiles at 541-776-4463 or email firstname.lastname@example.org. Follow him at @GregMTBusiness on Twitter.