Sellers appear to have regained some control of low-end housing in Jackson County after a long struggle fueled by foreclosures and short sales.
A rising median sales point for the area's existing single-family residences is the best evidence that sellers have turned the tide after six years of decline.
Figures compiled by Southern Oregon Multiple Listing Service showed a 10.8 percent year-over-year gain, with a median price of $163,500 during the second quarter, ending June 30, eclipsing the $147,500 figure of a year earlier.
The reversal also showed up in the month of June, as the median — half selling for more and half for less — price for existing homes crept up 5.7 percent to $170,000 in June over June 2011's $160,900 figure.
"At some point, the supply of houses on the lower end balances out and there's a willingness to pay at a higher level and that pushes the median to a new bracket," said Randy McBee, an agent with John L. Scott Real Estate in Medford. "It's the bracket of sales, as opposed to the median itself, that shows true appreciation."
The falling number of lender-owned property and short sales on the lower end of the market has driven buyers to look to more expensive homes.
"In some local markets, there is a one-month supply of properties under $165,000," McBee said. "That can change the median pretty drastically."
Total sales increased 8.8 percent during the quarter as 571 homes were dealt, up from 525 a year earlier. Meanwhile, the inventory of available houses fell 26.1 percent from a year ago. There were 1,226 houses on the market on June 30, down from 1,659 a year ago. The pace of deals also picked up with the days on market falling 26.3 percent to 73 days, down from 99.
As inventories decline, sellers are showing resolve and generally have the numbers to support their position, said Geoff O'Neill, an agent with John L. Scott Real Estate in Medford. Still, prices aren't rising in the wildfire fashion seen a decade ago.
"We're not necessarily seeing a higher price per square foot," O'Neill said. "But sellers are digging in their heels in those homes because they are more desirable."
Anecdotally, O'Neill said, about half of the buyers he's observed from the area are looking for larger homes. The higher the asking price, the more power a buyer retains.
"If they are upgrading, this is still a good time to do it," O'Neill said. "When you are dealing with a larger home, there is a little more wiggle room than on the lower end.
"I just had a buyer ask to help them find a $150,000 house — that's going to be a daunting task. Finding something in good condition in that price range is a lot more difficult than it was this time last year because there is so little inventory in that price range. If a house was priced over $500,000, there is a lot more flexibility."
He doesn't anticipate a spate of foreclosures to suddenly appear in coming months.
"If I was a banker with shadow inventory, I would be releasing it right now," O'Neill said. "But I don't think there is going to be a lot around here, so we're going to continue to see a tight inventory in that lower price range."
Six of 11 local markets saw median prices rise during the second quarter, led by Jacksonville and Eagle Point. Jacksonville's median sales price of $333,500 jumped 54.4 percent ahead of last year's $216,025, suggesting lower-tier sellers are holding firm. Still, Jacksonville's mean sales price is 23.7 percent below where it was five years ago. Eagle Point's median of $189,950 shot up 42.8 percent from the $133,000 level a year ago. The upward pressure likely will carry forward through the summer based on June figures.
"We went through a period of shock and awe, where people were staying put," McBee said. "There was a lot of downward pressure. Then there was an opportunity to sell for less than what they purchased. There has been capitulation for years where sellers surrendered to market values, but we've got stabilization now."
Even with prices and demand up, distress sales still come in play in more than half of the transactions. Normal sales accounted for 48.9 percent of the deals at a median price of $198,000. Bank-owned property made up 34.2 percent of sales at a median of $132,000 while short-sales factored into 16.8 percent of the turnover at a median price of $137,450.
In small numbers, building is coming back. Even spec houses are selling, although the median price is a far cry from the past.
"One of the reasons we are seeing more new construction now is that people don't want to deal with distressed properties," McBee said. "For a while, it was a unique opportunity and people ignored the future costs for a new roof or heating and cooling system. Now, they're thinking maybe in the end that costs more."
Reach reporter Greg Stiles at 541-776-4463 or e-mail firstname.lastname@example.org.