Home prices up, inventory down in Jackson County
The inventory of existing homes for sale in Jackson County has plummeted more than 18 percent during the past year.
As of Aug. 31, there were 1,144 houses in the Southern Oregon Multiple Listing Service system, down from 1,397 a year ago. That's making it increasingly difficult for real estate agents to find single-family residence listings in the $200,000 range where the majority of buyers exist.
"It seems the majority of houses coming on are above $300,000, but the buyers in that range aren't as abundant," said Ron Galbreath, an agent with Coldwell Banker Pro West Real Estate in Medford. "We're fighting each other for the $200,000 sale, because if you get the listing, it's money in the bank. If it's clean and livable, it's gone."
Home sales jumped 35.7 percent year-over-year during a three-month period ending Aug. 31, with 832 units exchanging hands compared with 613 during the same period in 2014. The countywide median price — half selling for more and half for less — during the summer was $235,000, a 6.9 percent bump from the $219,900 of a year earlier. The county's median price climbed 38.2 percent over the past five years with double-digit increases everywhere but Jacksonville, where the median is $246,500, second-highest behind Ashland's $360,500.
The recent median-price trajectory doesn't necessarily assure long-term escalation, local agents contend. The combination of stock market uncertainty and a strengthened bond market, stoked by the Federal Reserve's expected prime-rate increase, points to rising mortgage rates. That, in turn, will diminish borrowing power. Instead of multiple offers on the table, a seller will either lower the asking price or simply take the home off the market.
"We had pent-up demand going into the summer, now it's dialing back," said Scott Lewis, a John L. Scott Real Estate agent in Ashland and SOMLS board president. "To me it's an indication the market is self-correcting and sustainable. That's really important, because we don't want another bubble."
Industry insiders say small mortgage rate increases, with the possibility of more to follow, can prove to be a fulcrum to move fence-sitters to action.
"Most economists say it takes a full 2-point rise before it has a full impact on a market," Lewis said. "Small increases in interest rates cause people to jump before it rises again."
Although new construction isn't necessarily funneled through the SOMLS data base, the system indicates flat sales in the new home arena. There are indications some of the newly constructed houses might have been priced too high.
"It appears there have been some rollbacks," Lewis said. "Whether the builder was over-optimistic or it was simple market forces, they weren't selling homes for what they wanted."
On average, homes are selling between six and seven weeks, the SOMLS notes. Galbreath surmises local homeowners are hesitant to put up a "For Sale" sign if they don't think they can find a suitable replacement house.
"If they sell, they are going to have to go somewhere. When interest rates go up those homeowners will be inclined to stay and hold on."
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/EconomicEdge.