Sales down, prices up
Jackson County housing sales slowed substantially in 2013, according to figures released Monday by Southern Oregon Multiple Listing Service.
Nonetheless, a general inventory shortage, coupled with the growing health of major markets outside the region, propelled existing home prices to an 18.2 percent gain last year. The median sales price in 2013 was $195,000, up from $165,000 in 2012, but still a far cry from the pre-bubble $271,500 median for 2005.
Countywide, 1,971 houses sold in 2013, down 10.4 percent from 2,200 in the previous year.
Ashland and the Upper Rogue regions bucked the trend with slight increases in the number of transactions.
"We don't see huge surges in the number of sales in Ashland, typically because we don't have the ability to do large tracts of new developments," said Colin Mullane, spokesman for the Rogue Valley Association of Realtors and an agent with Full Circle Real Estate in Ashland. "It's always dependent on turnover of existing inventory with a few small exceptions. I do anticipate the rest of the Rogue Valley markets starting to have more normal sales."
Ashland's 7-percent gain in number of houses sold reflects activity in metro markets such as Portland, San Francisco and the Bay Area, places where many people moving to Ashland come from, Mullane said.
"It moves a little faster in Jackson County than some of the markets," he said. "But (it provides) a sign of what is to come, potentially for those other markets that lag a little behind. Then Josephine lags behind Jackson County, and you will find the coastal counties lag even further behind. A lot of the markets that feed ours have really been strong."
He suggested more homes will go on the market this year, spurring more sales.
The inventory of existing homes for sale in relationship to buyer activity peaked in February with a 5.1-month supply, while hitting its low point of a 2.7-month supply in May. November and December, however, saw an equilibrium of a 3.8-month supply.
"We've seen conventional sellers pull their homes off the market after September and then put them back on in March or April," Mullane said.
The role of distressed sales continued to dwindle in 2013, with four out of five sales considered normal deals, compared with just over half considered normal deals in 2012. Foreclosed houses accounted for just 7 percent of sales in 2013, down from 29 percent in 2012.
"I think we're going to continue to see the numbers fall," said Mullane of distressed sales. "Maybe not at as aggressive of a rate as they did last year, but maybe we'll see it closer to that 99 percent regular sales in three to five years."
The Upper Rogue region, including Eagle Point, was the lone area outside of Ashland to see more sales activity in 2013 than 2012.
Mike Malepsy, the principal broker at Windermere's Shady Cove office, said progress toward resolving long-term water issues helped in Shady Cove, where most residents rely on wells.
"There is some optimism in the Shady Cove area with the water," Malepsy said. "There are a couple of things giving people optimism and we're solving some of our water problems."
Shady Cove Water Works will soon provide treated water to the northwest part of town, which will serve 77 users in Shady Cove Mobile Home Park, bring more water to downtown and install more hydrants to protect against wildfires.
"There are some pretty common-sense solutions and it's giving people a little more optimism that Shady Cove is solving its water problems," Malepsy said. "It's not stagnant any more."
Also, there was a bit of new construction in the region.
"We hadn't seen any for the past five or six years," he said.
Riverfront property, ranging from $350,000 to $400,000, sold well, although high-end property didn't move as well.
While Phoenix saw the biggest median leap — 25.5 percent — to $199,000 from $159,900 in 2012, west Medford pushed its median sales up 22.9 percent to $104,500 from $89,000.
Looking ahead to 2014, Mullane anticipated more movement in new construction after seeing modest signs of life in 2013. He said the roughly 30 percent growth in 2013 will be mirrored in 2014.
"(Builders) have the ability to meet the shortage in the inventory, something we really needed last year," Mullane said. "But it's a very difficult industry to start up on a whim; people have to make sure they have their contractor's licenses in place. Just because we need them and want them doesn't mean they can meet the demand."
In general, gradual appreciation will be the rule.
"I don't think we'll see an 18 percent increase in median values this year like we did last year," he said. "I think you will see something much more in line with cost of living, give or take in certain markets."
Reach reporter Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter @GregMTBusiness, friend him on Facebook and read his blog at www.mailtribune.com/Economic Edge.