County real estate prices jump 9.7%

The median price for the three months ending May 31 rose to $155,000 

Jackson County residential real-estate prices bounced nearly 10 percent higher over the past three months compared to the same period last year.

The median price for existing single-family residences rose 9.7 percent for the three-month period ending May 31 — to $155,000 from $141,300.

Statistics compiled by the Southern Oregon Multiple Listing Service pointed to a modest increase in the pace of sales and declining inventories. It's the third consecutive month the county's rolling-quarter results have shown price gains after steady, sometimes-precipitous drops over the previous six years.

While many houses are worth a little more than half what they may have fetched at the height of the market, the latest numbers show the median price for existing houses countywide is 40 percent of the 2007 figure.

Could a trend be in the making?

"Had the market been going up for a period of time, would there be a negative spin if prices went down for three months?" asked Terry Rasmussen, an agent with John L. Scott Real Estate in Medford. "When the market turns upward right now, the question becomes how long?"

Median prices rose in nine of the county's 11 reporting areas, with the Eagle Point market registering the biggest median gain, rising to $188,700 from $131,000.

"We're still dealing with all the people who sat on the sidelines waiting for the market to tumble," Rasmussen said. "We know there is pent-up demand, and that could go on for a year or so. There's absolutely a psychological element to this, just as in the stock market. If you are feeling good and confident, you start getting out and spending money. The market's not exploding, but it's definitely waking up, the market is stirring," he said. "People are alert to what's going on, taking advantage of market conditions."

While the pace of existing home sales lumbered along at just 3.1 percent above the spring of 2011, with 539 houses exchanging hands, the number of single-family residences on the market fell to 1,199 at the end of May, down 26 percent from a year ago.

"The Pacific Northwest as a whole has a low inventory of houses," Rasmussen said, noting Snohomish County near Seattle has an inventory of just more than two months and Portland has a three-month supply.

The turnaround time also fell to 81 days — less than three months — from 97 days.

"We're starting to see new construction pick up," Rasmussen said. "So all the signs are that we've hit bottom."

Rasmussen said diminished activity in lower-priced areas such as Rogue River and White City can be attributed to availabiliy.

"In places like Rogue River and White City, we're looking for houses on the lower end," he said, noting a client recently had to pay $145,000 to land a 1,700-square-foot house listed at $135,000. "When you're talking about areas where there aren't so many sales, that shouldn't put pressure on prices. But the lack of inventory is putting more pressure on prices."

Traditional transactions made up 43.8 percent of the sales at a median price of $189,950. Distressed sales still weighed heavily, with foreclosures accounting for 37.8 percent of sales and a median price of $129,900. Short sales involved 18.2 percent of the deals at a median price of $148,000.

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.

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A Rogue Valley real estate price boost of 20 percent?

A national real estate monitoring firm says Jackson County appears to be on its way out of its long nightmare of declining home values.

Fiserv, which provides information to the international financial services industry, predicted the Medford area would have the second-fastest increase in home prices — more than 20 percent — in the nation through 2013.

The prediction was part of an overall positive report on the nation's real estate market by Fiserv, which monitors home prices in more than 380 U.S. markets. Fiserv listed results for Medford, but they actually represent the metropolitan statistical area, which includes all cities in Jackson County.

Fiserv's report noted the current median price locally is $144,000, which it said represents a 37.1 percent drop since the real estate market peak.

It predicted however, that the Medford area would show a 20.1 percent increase in home prices between now and the end of 2013.

Fiserv's prediction put Medford in a CNN report, "Where home prices are rising fastest," which listed the top 10 cities nationally in the rising price forecast.

Medford trailed only Madera, Calif., in the CNN report. Madera is in California's central valley and has suffered a 53 percent loss in home values since the market peak. The Fiserv report forecast a 21.5 percent increase over the next two years for that area.

Colin Mullane, a spokesman for the Rogue Valley Association of Realtors, said homeowners should take the Fiserv numbers with a grain of salt, calling it a "brave prediction."

"It's possible," he said, "but I'd be cautious in predicting that could happen in that time frame."

Mullane, a real estate broker at Full Circle Real Estate in Ashland, noted the near historically low interest rates make home ownership more affordable for people, but also noted that lenders and appraisers remain cautious after being burned by the huge run-up in prices in the early 2000s.

He said few appraisers would be likely to propose a 20 percent increase in values for a higher priced home, although it could be more likely for lower priced homes.

Despite his caution, Mullane said the Rogue Valley real estate market is showing signs of heating up, primarily because of a huge drop in inventory.

Mullane noted that in July 2007 there were 3,341 homes on the market locally. The most recent numbers showed that cut by nearly two-thirds, with 1,141 homes for sale.

He said demand has been fairly constant over the past several years — up by perhaps 10 percent this year — but that the enormous drop in inventory has led to some quick sales.

He noted a house listed in Ashland for $359,000 immediately received three full-price offers and had another 12 to 15 interested buyers. A lower priced home listed at $204,000 brought in three all-cash offers — and they needed to be all cash he said, because lenders wouldn't have approved a loan at that price.

"There's so little (inventory) to choose from, those buyers are really driving the market," Mullane said.

He said the prediction of 20 percent increases in sale prices certainly could happen for individual homes, most likely in the lower price range. He noted a house in west Medford that sold for $300,000 in 2007 recently resold for $69,000. Homes like that could see significant run-ups in price over the next two years, Mullane said.

"Some individual properties really took a hit," he said, "and for them it could happen. It's less likely to happen for more expensive homes."

The Fiserv report predicts that across the United States, home values will rise almost 4 percent a year for the next five years. That comes on the heels of a one-third drop in values nationwide since 2006.

The Fiserv report said investors will drive much of the value increase, as they snap up bargains, a trend already evident in places such as Las Vegas and Phoenix, Ariz. The company predicted first-time and trade-up buyers eventually will follow.

The CNN report noted that the Medford area's prospects are constrained by its ongoing double-digit unemployment, but said a continued influx of retirees will help offset that.

The report attributed the region's "mild Mediterranean-like climate, excellent medical facilities and reasonable cost of living" as factors in making the Rogue Valley "a hot spot among retirees."

Bob Hunter is editor of the Mail Tribune. Reach him at bhunter@mailtribune.com or 541-776-4460.

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