Wildfire smoke, rising interest rates and growing consumer uncertainty caused a real estate slowdown in the second half of 2018 and could continue to affect the market in 2019, according to the Rogue Valley Association of Realtors.
“It really was a year of two halves,” said Colin Mullane, a Realtor in Ashland and spokesman for the association.
The first half of 2018 featured a robust market that favored sellers. The market is balancing out, he said.
“We’re seeing it swing a little bit back in favor of the buyers,” Mullane said.
Real estate agents began noticing the change in the market in the summer of 2018, he said.
“I think most Realtors and clients will remember the smoke that we had in the valley, which certainly played into our activity within that market. Specifically, we had a lot of buyers that were concerned that the Rogue Valley was an area that was laden with smoke on an annual basis. And that certainly seems to be part of our ongoing reality,” Mullane said.
Anecdotally, Realtors heard of people moving out of the Rogue Valley or deciding against buying a home in Southern Oregon.
Two back-to-back summers of persistent smoke could have long-term impacts on the local housing market, even if 2019 turns out to be relatively smoke-free, Mullane said.
Some people scout out the Rogue Valley with plans to buy a home in coming years, but they may not have come on those missions in 2018, he said.
However, with wildfire smoke affecting the entire West, Mullane said prospective home buyers may have little choice but to buy a house — unless they are willing to move east of Colorado.
While the smoky summer coincided with a slowing market in Jackson County, Mullane noted the slowdown is occurring nationwide, not just locally.
“This was a trend that we were starting to witness across the country,” he said.
A volatile stock market, rising interest rates and the government shutdown are making some would-be buyers hesitate, Mullane said.
One sign of the slowing market locally is a rising inventory of houses.
In 2018, 59 percent of houses sold within 30 days of being listed, the association said.
That quick sales pace could slow as the number of homes on the market goes up.
In Jackson County, the inventory of homes for sale rose from 805 on Dec. 31, 2017, to 996 on Dec. 31, 2018, association data shows.
Talent saw the biggest percentage increase — 144 percent — in its inventory of available homes. Ashland, Phoenix, Jacksonville, northwest Medford, southwest Medford, east Medford, Central Point, White City, Gold Hill and Rogue River also saw increasing inventory from 2017 to 2018.
The largest drop in inventory — 28 percent — occurred in west Medford. Eagle Point saw a small decline, while the Shady Cove and Trail areas were flat, according to association data.
Although most areas now have more homes on the market, that didn’t dampen prices.
All areas saw the median price of sold homes go up. Countywide, the median price increased from $263,950 in 2017 to $280,000 in 2018.
Jacksonville saw the biggest price hikes, with the median price shooting up from $396,000 to $479,900, putting the small, quaint town in first place for most expensive place to buy a home in Jackson County.
The smallest percentage increase came in Ashland, where median prices went from $419,500 to $432,900, causing the home of the Oregon Shakespeare Festival to lose its spot as the most expensive place to buy a house in the county.
While buyers were dealing with higher prices, they also were less likely to get great deals from foreclosures and short sales. Buyers used to come into real estate offices and ask for foreclosure lists. But distressed properties are coming on the market with higher price tags, Mullane said.
Distressed properties made up only 5 percent of sales in Jackson County in 2018, according to the Rogue Valley Association of Realtors.
Mullane said the question comes up again and again whether the country will see another housing crash like the one that plunged America into a recession a decade ago.
He said federal reforms that tightened up lending standards could help stop another crash.
In the past, lenders were making loans to people who didn’t make enough to afford the houses they bought. Now lenders are checking buyers’ incomes and their debt-to-income ratio to make sure they can afford to buy, Mullane said.
“We’re acutely aware of what happened in ‘08. There’s lot of people watching for that again and there’s really no signs of it,” he said.
Jackson County continues to grapple with a lack of construction workers to build new homes and apartment buildings. Many left because of the boom-and-bust nature of the housing construction industry, which is closely tied to economic ups and downs, Mullane said.
The loss of those workers will continue to constrain the housing supply for both for-purchase and rental housing, he said.
Reach Mail Tribune reporter Vickie Aldous at 541-776-4486 or firstname.lastname@example.org. Follow her at on Twitter @VickieAldous.