The collision of investment dollars, population growth and changing demographics has created tight housing markets here and elsewhere.

There is no escaping the role of investors in Jackson County, where the inventory of homes for sale is the lowest on record and rental vacancy is hugging 1 percent. More than a third of residences, or 38 percent, are renter-occupied.

In Medford, that number jumps to nearly half — 49.7 percent of all residences are occupied by renters, according to the U.S. Census Bureau 2015 American Community Survey.

In part, that can be traced back to the fallout of the Great Recession, says Patrick Rogers, an investor who also operates Asurent Property Management with offices in Ashland and Medford.

When real estate values plunged and foreclosures mounted between 2007 and 2010, well-positioned investors plucked up bargains, Rogers says. The single-family residential market has rebounded with values closing in on all-time highs, and transactions have increased in each of the past three years. Yet, the housing supply — both single- and multiple-family — has failed to keep pace with demand.

The unsustainable appreciation in the early 2000s encouraged both building and buying speculation. Owner-occupied homes accounted for 66.5 percent of residences countywide, 57.3 percent in Medford in the year 2000. When the wheels came off, however, flippers and contractors alike took it in the wallet.

"Everything went upside down when the markets came crashing down," Rogers says.

Homeowners lost their houses, and builders often went bankrupt. When banks and government agencies released foreclosed property, large-scale investors swooped in.

"I remember seeing a lot of cash investors from 2007 probably to 2012," says Ron Galbreath, an agent with Coldwell Banker ProWest Real Estate. "They were gobbling up bargains throughout our whole county then, especially when there were high increases in rents because everybody needed rentals."

As the economy recovered, there were expectations that home ownership would climb, but Census figures suggest not. ABODO, a Wisconsin-based rental housing placement and research firm, suggests decreasing ownership costs don’t necessarily translate to more homeowners, just as increasing rents don't automatically reduce the number of tenants.

In Jackson County, low mortgage loan rates and improved employment figures have yet to substantially boost home ownership.

"There was an assumption the rental market would take a dive as more and more people bought houses during the real estate rally," Rogers says.

In some West Coast cities, there have been reports of investors unwinding rental holdings, but so far there hasn't been much movement in the Rogue Valley. As a result, in places such as Medford, there just aren't a lot of options for buyers or renters.

"Overall, we're seeing an increase in renter demand, making it more difficult to find places," says ABODO spokesman Sam Radbil. "A lot of people are scared of purchasing, specifically millennials, who neither can afford nor want the hassle of home ownership. But they want urban amenities."

Houses bought at the bottom of the market have nearly doubled in value. With rents typically producing between 6 and 9 percent annual return on investment, Rogers says, there is relatively little incentive to sell.

Between rents and appreciation, however, some investors have seen a 20 percent or more return on their investment. Tax codes lead some investors to sell seven to 10 years after purchase, Galbreath says, taking full advantage of accelerated depreciation. They move on to larger plays through 1031 exchanges, which allow sellers to avoid tax on capital gains.

For someone with a rental or two, however, dependable income might be enough to keep them holding onto a property.

"If the investment is covering itself, there are low maintenance costs and a good tenant," Galbreath says, "there is no reason to sell."

Although strategies vary, late-arriving investors contribute to the tight housing market, Rogers says.

"There are people who buy and hold, but there are still some with a flip mentality," he says.

It's tougher now for flippers, Rogers adds, because Californians may up the price, reducing the ability for quick turnarounds to pencil out. Some investors have sold holdings to other investors, but all in all, speculation by builders and flippers is nothing like it was 15 years ago.

"People are more cautious this time around," he says.

Indeed, the 2015 survey indicated 1.4 million new renter households, pushing the percentage of renter households to 36.4 percent — the largest the nation has seen since the 1960s. As a result, the number of renter-majority cities grew by 50 percent to 20, from 14 in 2012. An ABODO study showed demographics of those renter-majority cities vary: College towns, with young, temporary residents; areas near military bases, where many residents are transient; and large cities with extremely high housing costs, making ownership less than feasible. 

There often is a significant financial impact on people in their 20s and 30s, saddled with college and consumer debt.

"Housing is expensive," Radbil says. "If you don't know what you are doing, it can be overwhelming to purchase a home, and then comes upkeep. That age group doesn't want to be tied to a certain city. They tend to bump around, so renting makes perfect sense."

Oregon has attracted increasing migration in recent years. The historical flow of Californians retiring to the Rogue Valley has resumed as well. When Californians sell tract homes for three or four times what a similar residence in Southern Oregon would command, it adds pressure on local prices.

Rogers says there is more to the influx than retirees.

"There are a lot of retirees, but I'm seeing people anywhere from their 30s to 50s moving here," he says.

"It's very typical for people selling a home for $2 million when they owe maybe $300,000, or refinance," Rogers says. "They come up here and pick up two houses to rent and buy another and turn it over to property management until they are ready to move up here."

Rogers says rural residential property is seeing pressure as the result of legalized marijuana.

"If you're looking to buy a home in the country to fix up, it's very difficult to find anything more than an acre of land," he says. "Three years ago, you could've stepped into a place for a price similar to what it was in town; now it's maybe another $100,000 to $200,000."

Meanwhile, a series of bills pending before the Legislature in Salem could potentially deter investment in single- and multi-family housing, Rogers says.

Among the bills is one introduced at the request of Gov. Kate Brown that prohibits landlords from terminating a month-to-month tenancy without cause.

Exceptions to House Bill 2240 would allow a buyer to move into the house; a landlord or immediate family member to move in; or for major repairs or renovations rendering the residence uninhabitable. In those cases, the landlord would be required to provide 90 days’ notice and relocation assistance equal to three months of rent.

Oregon House Speaker Tina Kotek, D-Portland, is pushing to repeal the statewide ban on rent caps, allowing cities and counties to pass their own rent control policies. Her plan is to bar rent increases above 5 percent for one year. The bill would grant landlords exceptions to the rent cap, including an appeals process.

Another measure, House Bill 2003, would rescind the ban on local regulation of rents without imposing a cap on rent increases.

A local landlord with 25 properties told Rogers at the recent home show in Central Point that he was selling his holdings and moving to Texas.

But Rogers, who manages 75 properties with a median rent of about $1,500, cautions that was an isolated response.

"Rent-control legislation is definitely scary," he says. "But most investors just want to keep informed. I've been asking them to write their legislators about it."

If interest rates climb, California investors will have a leg up, Rogers says. At the same time, the affordability index still shows local wage earners can meet housing prices.

"I don't have a crystal ball," he says. "But I think investment will continue."

— Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.