Jackson County real estate sales, prices continue rebound
After getting off to a lethargic start the first three months of 2014, the Rogue Valley residential real estate market has picked up.
And while much of the country could blame the year's slow start on super storms and deep freezes, there was no such scenario in Southern Oregon.
"It's hard to know what interfered with the process here," said Colin Mullane of Full Circle Real Estate in Ashland. "Maybe it was consumer confidence; it's hard to tell."
What was clear, in early 2014 monthly residential real estate sales were off anywhere from 10 to 20 percent, year-over-year — somewhat worrisome considering the market has yet to regain the pre-bubble heights of 2005 and 2006. Through March, sales fell 15.9 percent to 347 deals from 413 a year earlier.
At the time, agents bemoaned a lack of inventory, while others noted investors had backed off as distressed sales receded and interest rates were rumored to rise.
Then, for no particular reason, buyers began signing on the dotted line and the inventory grew.
The market picked up steam in the following six months, pushing the the transaction total to 1,788 though the first nine months of year from 1,710 in 2013 — a 23.4 percent swing that created a 4.4 percent gain.
"We've not only caught up to last year's sales, but surpassed last year's sales," Mullane said. "I wouldn't have predicted that."
On one hand, sub-4 percent mortgage rates have spurred sales, but there are factors as well — not the least of which is mounting homeowner equity — as median prices climbed even when the pace of activity slowed.
"Sellers are getting more ambitious," said Ron Galbreath of Coldwell Banker Pro West Real Estate in Medford. "People who were hesitant to sell because they didn't have as much equity can finally sell and make enough to buy another home on their way out."
Between July 1 and Sept. 30, Jackson County home sales activity rose 7.2 percent over a similar period in 2013 as 580 single-family residence transactions took place compared to 541 in 2013. Southern Oregon Multiple Listing Service figures showed the median price for sales during the third quarter of 2014 rose 9.3 percent to $218,500. Rural property saw an even bigger 10.3 percent bump to $317,500 from $287,900.
Mullane said potential interest rate spikes have hung over consumer heads for more than two years.
"They know it won't last forever, but they're mindful it's not going to get much better." Mullane said.
Galbreath hesitates to predict the momentum will continue, but points out Federal Reserve Chair Janet Yellen is pushing for higher rates after the first of the year.
In east Medford — the typical county bellwether — activity advanced nearly 20 percent in the third quarter with 195 sales compared with 159. The median price rose to $237,000 from $222,000 during that period.
"People that couldn't sell three or four years ago, because they couldn't take the loss, are selling now," Mullane said. "Part of the market moves organically, and people wanting to downsize, upsize or do something different can do that now. They didn't have the urgency when the market was bad; now they can get out in a positive way."
Five years ago, the east Medford median price was $209,000, which left many homeowners with little equity or underwater.
"They can sell now ," Mullane said. "We couldn't sell the high-end homes there for a while."
Five of 13 SOMLS regions saw double-digit median gains during the third quarter, led by northwest Medford, which saw its median climb 48.5 percent to $183,750 from $123,750. Ironically, it was one of four regions to have fewer sales from July 1 through Sept. 30.
As of Sept. 30, Jacksonville, Shady Cove/Trail and Talent were the only areas in the market to see fewer homes on the market than a year ago. Overall, inventory rose 15.8 percent to 1,364.
Reach reporter Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at https://www.facebook.com/greg.stiles.31, and read his blog at www.mailtribune.com/Economic Edge.