Cost of existing homes in county up 32 percent
It's not even looking like spring right now, but the coming house-hunting season could be a good one for sellers.
Mortgage interest rates remain an ally for both buyer and seller, distressed properties continue to dwindle as a percentage of transactions, and there's no immediate threat of new foreclosures ready to flood the market.
During the past three months, the median price for existing homes in Jackson County rose 32.1 percent to $185,000 from $140,000, according to figures compiled by the Southern Oregon Multiple Listing Service.
Median prices rose in all but one of the 11 urban areas tracked, with Phoenix reporting a nearly 58 percent jump and Shady Cove/Trail rising more than 50 percent. Jacksonville, the second-highest priced market, saw a 1 percent decline to $245,000.
While many new construction transactions don't run through the SOMLS, the number of sales in its system doubled during the period, although the median price declined to $215,900, indicating smaller houses are in vogue.
One recent constant — increased sales volume — went out the window during the three months ending Feb. 28. The pace of sales diminished 12 percent to 405 from 460 a year earlier and the reason is simple — the inventory of houses available declined 30.5 percent to 823 in the SOMLS system.
"If we can get inventory, it will sell quickly," said Terry Rasmussen of John L. Scott Realty in Medford.
The average days on the market plunged to 62 from 73 during the period.
"I went to a house listed for $160,000 in Eagle Point listed this week on Tuesday," Rasmussen said. "We arrived and there was another agent with a client outside and another with a client inside. We had to wait 10 minutes to get into the house. When I called the listing agent, there were already two offers."
He said a similar scenario unfolded a few blocks away for a house listed at $169,900.
"The only thing slowing down sales right now is the lack of inventory," Rasmussen said. "It's the same struggle happening up and down the West Coast. When houses weren't selling, families still grew. Everyone who sat on the sidelines is trying to get in now with the great interest rates and affordable housing."
At the height of the real estate bust, there was a 10-month glut of inventory on the national level. Now that figure is just over four months, and locally, it's just over three months. During February 2012, there were 217 new listings on the SOMLS rolls; last month there were 189. In February 2012, there were 291 sales and 139 deals last month.
"We have very little to sell," Rasmussen said. "During a healthy market you have five to six months of inventory, putting buyers and sellers on equal footing. You get down to three or four months and sellers have a lot more ability to stand pat on their price. That's when you see buyers crawling over the top of each other and multiple offers and bidding wars."
Claudette Moore, Coldwell Banker Pro West Real Estate agent, said the last three listings she's had sold within 30 days.
"Most of the appraisals are coming in real close," Moore said. "When they're not quite there, the buyers and sellers are working around it and splitting the difference, if the buyer can put enough down."
Distressed properties, which dominated the market for three or four years, have shrunk as both a percentage of sales and listings. Nearly 65 percent of deals were normal transactions at a median price of $209,050. Less than 13 percent of the inventory is distressed property.
"I don't think much will change from the perspective of distressed property for most of the rest of the year," said Vic Nicolescu of the Alba Group. "New construction hasn't stepped in to fill the gap and is still relatively expensive compared to homes that are already built. The thing that is hard to predict is how long sellers will stay out of the market. If we get a bunch of sellers starting late this month, April and May, we'll have a strong selling season and prices won't go crazy. But if we have a continued short inventory, then we're going to see unsustainable price increases."
Reach reporter Greg Stiles at 541-776-4463 or e-mail email@example.com. Follow him on Twitter @GregMTBusiness, and read his blog at www.mailtribune.com/Economic Edge.