The pressures driving Jackson County’s relentlessly rising home prices have eased.
Although the median sales price for existing single-family homes bumped up 4.5 percent during the third quarter, the pace of transactions declined 10.5 percent, according to figures compiled by the Southern Oregon Multiple Listing Service.
The median price throughout the county rose year-over-year to $287,500 from $275,000, while the number of deals fell to 733 from 819.
“The surge in the pricing we’ve seen over the last eight years is going away,” said Colin Mullane, spokesman for the Rogue Valley Association of Realtors and an agent with Full Circle Real Estate in Ashland. “Buyers demands are starting to be met by more inventory. When those two meet, the market normalizes.”
Several factors have conspired to erode the eight-year upward trend lines, including interest rates, diminishing activity in major metropolitan markets and rising inventory.
When sales cool off in the Puget Sound, Bay Area or Southern California, the ripple effect eventually hits the Rogue Valley. In recent years, the norm in Seattle has been multiple offers within hours of property hitting the market. Mullane recently talked to a seller in the trendy Queen Anne neighborhood.
“His house has been on the market for two weeks without an offer,” Mullane said. “He’s wondering what’s wrong, but there’s definitely a broader pattern to this across the nation; they’re noticing their version elsewhere, and we’re noticing our version.”
Locally, interest rates are diminishing buying power. When rates were at 4 percent in 2017, a buyer who could have paid $400,000 for a house is now capped closer to $370,000,” Mullane said.
Meanwhile, wages haven’t countered mortgage rates, and wildfire smoke added a layer of angst.
“This is a more traditional shift toward a buyer’s market,” Mullane said. “When you don’t have increases, it may feel like the value is going down.”
Sellers have frequently leaned toward a higher asking price, anticipating an advancing market, Mullane said. “And they have often been rewarded.”
Lately, however, homeowners trying to catch the cresting waves have experienced a bit of a riptide.
For a while, Mullane said, if a market analysis indicated a house was worth $400,000, sellers might bump the price to $420,000 and perhaps get it.
“Now, if the analysis is $400,000, it really needs to be $400,000,” he said. “We’re not doing the seller any good for $420,000, and then dropping to $390,000 and maybe $380,000.”
Turnaround time is longer than last year, with pending sales declining 14.2 percent year-over-year in September. Closing periods have extended as well.
“We’re seeing homes stay on the market longer, and transactions are getting tougher to close,” Mullane said.
Buyers who had absorbed maintenance costs in order to stave off higher bids from other suitors are now requiring sellers to fix problems before closing.
“Before buyers were satisfied with the negotiated price, and they could overlook this, this and this,” Mullane said. “Now, they’re insistent that repairs are made and this is done and that is done. It’s creating more tension than the same transaction six months ago.”
Kate Morris of Hamlin Real Estate said she has yet to see a deal not close because of contingencies.
First-time buyers still have substantial hurdles to clear as they compete against newcomers and retirees angling for property under the $300,000 level, she said.
“The last year and a half, you could get a house for $240,000, and that’s becoming more difficult as interest rates become more of a factor,” Morris said.
At the end of September, there were 1,227 existing homes on the in SOMLS system, up 17.9 percent from a year ago.
The biggest jump in the median sales point was in northwest Medford, where half of the sales were above $257,500 and half below. The median year-over-year sales price in Eagle Point fell 5 percent to $275,000, and in Shady Cove/Trail — an area hit hard by smoke — it dropped 5.2 percent to $256,900.
Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter at @GregMTBusiness or www.facebook.com/greg.stiles.31.