Value and risk
Skyrocketing housing prices place the region on a list it might not like
If you own a home in the Rogue Valley, chances are you've felt it: an uneasy feeling in the gut about rising home prices.
One day homes in your neighborhood run about &
36;150,000. Turn around and it's &
36;200,000, then &
36;250,000. Then one sells for &
36;300,000 and the neighbors are talking &
If it's felt like something's out of kilter here, now we've got evidence. A new study of housing in 299 U.S. metropolitan areas says the Medford market, which includes Ashland, is overpriced by 55 percent.
We are ranked 10th nationally, in the company of only California and Florida.
Homes here, according to the report by National City Corp. in Cleveland, cost an average of &
36;228,000, half again as much as they should based on factors such as income, historic values and mortgage rates.
There's some sort of comfort to living in a home whose value is higher today than it was yesterday than it was the day before, sure. But unless we plan to sell and move away, the fact that our homes' prices are climbing doesn't put money in our pockets.
— And it certainly doesn't help anyone who wants to buy here. One of the reasons Medford-Ashland is so far up on the list is that for many, income remains low. The valuation report put average household income at almost &
36;71,000 per year, but another recent report said the average single worker here makes &
36;30,000 annually ' not nearly enough to buy housing.
This has been an issue for years in Ashland, where the community has shut two of six elementary schools as families have left for cheaper space. But now it's a problem elsewhere as well.
Groups in Medford and at the county government level are trying to make sure affordable housing goes up quickly enough to meet residents' needs, but it's hard for anyone to build inexpensive housing as land and materials costs rise.
Our neighbor next door doesn't help, either. Because so many Californians sell their homes and use the money to buy here, their market dictates ours. California held seven of the top 10 spots on list of overpriced markets.
Where does this leave us?
Sitting in homes that are extremely overvalued, according to the study, which also puts Bend, No. 25 on the list, in that category.
It is, if we needed it, evidence that this is a nice place to live. Despite low incomes and prices moving so fast we can't keep track, we're still here rather than in, say, College Station, Texas, the 299-city list's bottom dweller.
But it is also a message to Rogue Valley residents that questions of affordable housing and income are issues on which we can't afford to turn our backs. If today's trends continue, it will hurt our communities. We'll have expensive places to live and unlivable communities as well.