The scarcity of existing homes for sale in Jackson County means those that are on the market are selling faster and at substantially higher prices.
The median sales price for existing homes during the first quarter of 2013, according to the Southern Oregon Multiple Listing Service, rose 26 percent over the first three months of 2012, climbing to $182,750 from $145,000.
New construction is benefiting from the dearth of supply while potential sellers are happy to take a wait-and-see approach before listing their homes.
"They're waiting and waiting," said Colin Mullane, spokesman for the Rogue Valley Association of Realtors and an agent with Full Circle Real Estate in Ashland. "They're in a position to sell, but a lot of them are realizing we're just at the beginning of the turnaround they've been waiting for.
"They've made it through the last seven years and aren't rushing to sell now; they're waiting to get closer to where they might have been before the market took a downturn."
Year-over-year median sales prices have steadily risen since the first quarter of 2012, according to SOMLS data.
Meanwhile, the inventory of homes on the market has plummeted 21.3 percent to 889, as of March 31, from 1,130 a year ago.
Homes that were on the market sold on average in 61 days, compared with 78 days last year.
That plays well for local sellers, especially as more out-of-state buyers are finding their way to the Rogue Valley.
"We started to see that last year, but we are absolutely seeing that now," Mullane said. "The nice thing about it, is they are selling something in typically affluent markets in Southern California, the Bay Area and parts of Washington, where there is also low inventory, putting the seller in a positive position. Then they are coming into our market with cash and ready to go. The trouble is finding a place to buy."
While a hot market draws people into the action, a relatively tame one has its own characteristics.
"The problem is you've always got buyers who've been on the fence," Mullane said. "They are always a little behind because they wanted to be sure that they were at the bottom of the bottom, and that was six to 12 months ago. Interest rates are at 3.5 percent and starting to creep up."
Ashland, the highest-price market in the county, recorded a $318,250 median for the first quarter — still a far cry from the corresponding $402,500 median in 2006, but significantly better than the $255,000 median of a year ago.
"The Ashland market is back for sure in all price ranges," Mullane said. "Even in that $300,000 to $600,000 price range, there are buyers. As soon as it's on the market, a sale is pending as long as the seller isn't asking for an arm and a leg. Sellers are commanding prices again rather than have it dictated to them. Those days are passing in the rearview mirror very, very quickly."
New construction has picked up, although the houses are generally smaller than during the boom times of a decade ago.
"One of the upticks of a market with no inventory is that people are turning to a builder, who is still building at very competitive prices," Mullane said.
Talent is among those areas where new construction is being snapped up.
"Talent benefits from its proximity to Ashland," Mullane said. "It's great for commuters — eight minutes or less, depending where you are trying to go to. You can find new construction in Talent for $200,000 to 300,000 and get a beautiful home. You'd have to go to at least to the $300s to get new construction similar to that in Ashland."
Although only a portion of homebuilding activity filters through the SOMLS system, there is evidence new construction has picked up with 40 sales during the three-month period, compared with 17 in 2012.
Seven of 11 regional market areas tracked by SOMLS in the county saw year-over-year median price gains.
Central Point recorded 47 sales at a median price of $163,500, a 30.8 percent increase.
Eagle Point saw the only significant decline over the first quarter, a 9.7 percent drop to $162,500.
The Upper Rogue Shady Cove/Trail area showed a 41.2 percent jump in median prices, while the Gold Hill and Rogue River area recorded a 39.1 percent advance, but both of those were based on the sales of fewer than 10 homes.
East Medford recorded the largest number of sales of the areas tracked, with 112 sold in the three months at a median price of $200,000.