Realtors' forecast for 2011? Cautious hope

Realtors' forecast for 2011? Cautious hope

Perhaps the bright blue sky outside Thursday foretold better things to come.

But with home prices continuing their five-year downward spiral, those in the know made no effort to sugarcoat the local real estate forecast for 2011.

Reviewing 2010 and giving their hazy best guesses for the new year, Rogue Valley Association of Realtors representatives shared their thoughts with the assembled media.

There was a slight increase in existing home sales in 2010 and, mercifully, distressed property — foreclosures and short sales — accounted for less than half of the transactions. But there has been so little new construction that the Southern Oregon Multiple Listing Service considered dropping it from its periodical summaries until renewed activity warrants inclusion.

"At the end of the year," said Krista Bolf, an agent with Coldwell Banker Pro West Real Estate in Ashland, "I want to tell people, 'Thank God that 2011 was a hair better than 2010, but not worse.' "

Beyond the distressed properties, national statistics reveal 25 percent of all homeowners owe more on their mortgage than their home is presently worth. That means a significant amount of homeowners who are still making their mortgage payments on schedule couldn't sell now if they wanted to without creating a short sale.

Bolf said there are no numbers for the number of homeowners who are underwater. "There's no way we can really track it," Bolf said.

Homeowners in that category, who otherwise might have contributed to the county sales figures, are staying put. "People who want to downsize, because they have fewer kids at home, or up-size, because they've got more kids, would typically create more activity," Bolf said. "Now they can't cash out or refinance because of lending requirements. They have to stay where they are and that's not their first choice. When the market rebounds we'll see more of those people in the market."

Bolf said unemployment and underemployment, reflecting fewer hours worked, have contributed to some people's inability to refinance mortgages. She said sometimes inflexible rules have added to the difficulty, noting one extreme example in which someone was denied a loan because of a drop in annual salary from $500,000 to $450,000. "Because they lost income, they were considered a high risk," she said. "It hits every level."

Bonuses or overtime that once helped home buyers obtain a mortgage now carry less weight with lenders. "People aren't in a position to increase hours at work or to get a better job and make more money."

The countywide median sales price dropped 11.4 percent in 2010 to $164,828 from $185,950 a year earlier and extended a five-year trend that saw the median tumble 39.2 percent from $271,250. The median is the midpoint, with half of the sales above the mark and half below.

The median price for non-distressed sales was $209,900. Foreclosed houses sold for a median price of $127,000, while short sales had a median of $159,000.

Reach reporter Greg Stiles at 541-776-4463 or e-mail

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