Local real estate market sees some shifts in trends
A hot real estate market with fewer listing may have moderated slightly, according to figures from the Rogue Valley Association of Realtors for September and the third quarter of 2021.
The number of houses on the market Sept. 30 was 22% higher than a year earlier. Listings have been increasing slowly since a low of 117 in November 2020, although the 551 homes available last week were only 47% of the 1,169 on the market in September 2019.
In September new listings went up 51% compared to September 2020, while sales figures as a percentage of listing prices dropped to 98% compared to 101% in July. Houses sold at an average of 20 days on the market, versus 41 days for the third quarter last year.
“We have definitely seen a peak of activity. It was supply and demand. As soon as something was listed to view, people lined up with multiple offers,” said Scott Lewis, a broker with John L. Scott, Ashland. Three factors have driven the recent trends, Lewis said.
“People who were hesitant to put their home on the market prior to the vaccine are now more willing to let strangers in for tours,” said Lewis. “I think there’s also been a lot of sellers being aware that the market is red hot and they want to get their property on the market. The bottom line is there are more homes being put on the market for sale.”
A third factor is extremely low interest rates and the concern that federal policy may raise rates, so people are listing and looking to buy something else, said Lewis. Longer term he doesn’t expect any wild swings in the market.
“I don’t think we are in a bubble. It doesn’t remind me of what we had in 2010. The buyers are legitimately qualified, the crazy appreciation is tapering off. I think we will see a moderation of appreciation of home prices, that’s my opinion There may be a leveling off, but it won’t go down,” said Lewis.
Sales of existing homes in the third quarter increased 1.2% over 2020, with 820 units sold this year compared to 810 last year. Median sales price increases for existing homes continued in the double-digit range, with the third quarter median of $379,500 up 14% over 2020’s $338,500.
A decline in listings that started when the COVID-19 pandemic struck continued well into this year. Numbers dropped steadily to 601 in June 2020, 314 in October and the low of 117 in November. Numbers for much of this year were little better with fewer than 300 through April, 399 in June and 479 in August.
New home sales for the quarter ending Sept. 30 tumbled from 130 last year to 80, a 38% decline. East Medford had 20 of the sales, while White City recorded 11 and Ashland and Eagle Point recorded 10 each.
Three factors have influenced the reduction in new home construction, said Rick Harris, principal broker with John L. Scott, Ashland. Harris represents a builder.
A huge spike in lumber prices this year meant that it was very difficult for builders to project what construction costs would total six or seven months out from the start of work, said Harris. The prices have softened a bit in recent months, he said.
Disruptions in the supply chains for many products, brought on by the pandemic, have also created uncertainty for completion of new housing, said Harris. Among items builders cannot source with assurance are wiring, plumbing and electrical fixtures, siding, trusses and more. Prices of the materials are also uncertain.
A lack of workers and subcontractors is also impacting the ability to build new homes, said Harris. Employment levels are back up a bit, but not at prepandemic levels.
“Customers are out there … but buyers want a predictable number for new homes,” said Harris. With contractors unable to give a final price due to market fluctuations, it is difficult for buyers to commit, he said.
Rural home median prices in the county were up to $633,500 for the quarter, a 20% increase from $530,000 last year. A total of 180 rural homes sold compared to 210 in 2010, but they turned over at a quicker rate on average, with 44 days on the market versus 77 in 2020.
Reach Ashland freelance writer Tony Boom at email@example.com.