Finding a house for less than $275,000 has been a chore for local home buyers.
The trend might continue for a while, but that could change later this year.
The median price for an existing Jackson County home sold between Nov. 1 and Jan. 31 climbed 8.9 percent to $268,350 from $246,500 a year ago, according to figures compiled by the Southern Oregon Multiple Listing Service.
“Buyers are not thrilled with what they finding in the $250,000 to $275,000 price range,” said Claudette Moore of the Coldwell Banker Pro West Real Estate in Medford. “We’re seeing some reductions between $200,000 and $300,000 we haven’t seen before. It’s still pretty sparse though, so we know that if they haven’t sold they’re just overpriced.”
The handful of markets within the county where prices have more than doubled, or nearly doubled, in the past five years are generally on the low end of the scale.
West Medford has seen a 114.6 percent gain in the median price point during the past five years to $191,000. The January median of $204,999 suggests that area could crest $200,000 soon.
White City’s reported median of $200,000 is 106.2 percent higher than five years ago, although there are signs that run-up is ending. Northwest Medford’s $225,000 median is up 17.9 percent from last year, and 79.9 percent above where it was five years ago.
But if mortgage interest rates, triggered by a rise in 10-year Treasury note yields, continue to rise, that means buyers won’t qualify for as large of loans, and potentially erode demand.
"With the recent spike in (personal) income comes the specter of inflation, and bonds hate inflation,” said Matthew Gardner, chief economist for Windermere Service Co. “The return on the bonds has to be above the inflation rate, or you’re losing money. The 10-year Treasuries track the bond market. We’ve seen bond yields rise to 2.85 percent, and that will certainly put pressure on mortgage rates.”
Gardner, however, does not see an immediate impact on the market.
“It could pull buyers forward,” he said. “We’re still likely to find more buyers than sellers in the first quarter. We’ll still see price growth through most of this year because there just aren’t enough listings.”
Already, there’s increasing movement to market with 755 houses listed in the SOMLS system on Jan. 31. That’s a 14.4 percent surge over last year’s listings, with transactions growing 3.5 percent to 628 from 607 during the three-month period. The average time on market crept up, as well, to 43 days from 41.
“If interest rates climb, things will slow down because buyers will be qualifying for less,” said Bryan Schlafke, an agent with John L. Scott Real Estate in Medford. “When that happens, sellers will have to slow down a little.”
Even so, Schlafke said, if builders were churning out homes in the $250,000 range, they would sell rapidly.
“Right now, $250,000 is a very popular number,” he said. “Anything in the $225,000 to $250,000 is very sought after, that’s why you’re seeing the kind of activity you’re seeing in White City, west Medford and northwest Medford, where sales are pretty robust.”
— Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter at www.twitter.com/GregMTBusiness or www.facebook.com/greg.stiles.31.