Smoke, Pot and Tariffs Slow Southern Oregon Real Estate Sales

2018 started out with a bang and we saw the median price of a home in Jackson county increase to $285,000 – up from $194,500 in 2013. This means the average home has seen its value increase $18,000 a year. The number of homes sold has also increased this year by about 8%, which makes the outlook even better. We would have predicted an all-time record year for Southern Oregon Real Estate but then came the Smoke, Tariffs and decreasing demand from the pot growers.

 

While sales of homes under $400,000 haven’t seemed to be affected by the smoke, there has been a decrease in sales and the number of showings of more expensive homes. Often it is the visitors from out of state who are looking for homes in the price range of $400,000 and up. There are so many tourist attractions that need the tourists to survive such as the Oregon Shakespeare Festival, Britt Festival, Hellgate Excursions and the wineries, and they have all been hurt by more than a month of smoke. Tourists and prospective retirees will be back, and it’s unlikely the smoke will have a lasting effect, but in the meantime, we will see a dip in high-end home sales.

 

We have also seen a decline in value and demand for rural properties, especially irrigated, rural properties. We believe most of this decline is due to the end of the exuberance of marijuana legalization which caused a rush on irrigated land and drove up rural land prices. Today there is so much marijuana grown in Southern Oregon that the prices have dropped significantly. In June, the OLLC temporarily ended licensing for new marijuana grows, which was the end of irrigated rural property being purchased for the purpose of growing pot. We still have, and will always have, buyers pursuing irrigated land to grow hay, vegetables, grapes, fruit and more, but not as many as we have seen in the last two years.

 

Newly imposed tariffs on lumber, steel, drywall, nails and other key construction supplies have pushed up the average price of a new home. One study printed in the Wall Street journal states the average price of a new single-family home in California has gone up as much as $20,000 due to tariffs. Another AP article states tariffs have increased the lumber cost of an average single family home between $8,000 and $10,000. Already in July we saw record inflation at 2.9%. If this inflation continues, the Federal Reserve will have no other option than to increase interest rates, as a counter measure to limit the growth of inflation. As a reaction to the tariffs, and increased cost of goods, some major US manufactures have already announced plans to increase their prices by as much as 20%. So, it looks like we may be facing a “Wall of Inflation” caused mainly by tariffs which will lead to higher home prices in both the cost of the home and the interest rate to buy that home.

 

We have lost some valuable selling time to smoke, and we lost some demand from the marijuana growers, but as the smoke clears, the out of state buyers will be back. If they don’t hurry back, they may be surprised by how much their dream home has gone up in price and the increase in the interest rate to buy that home.

 

 

 

 

 

Jacksonville is Oregon’s most beautiful small town, magazine claims; we offer photographic evidence

Caught up in the hectic big-city rat race, many Americans dream of small-town living. The calm pace, friendly neighbors, quaint stores. A place where you can take a deep breath — and not end up in a coughing fit.House Beautiful magazine understands the allure, and so this summer it identified what it considers the “most beautiful small town in every state.”

And the winner in Oregon? Jacksonville. The magazine heralds the “historic town that’s in the heart of the state’s wine country.” It also gives a shout-out to “the sounds of the Britt Music & Performing Arts Festival [that] fill the town” every year.

House Beautiful points out that Oregon’s small towns are “jewels,” which is undeniable. But is J’ville the most beautiful of them all? We’ll let you decide for yourself. We’ve searched our archives for photos past and present that show Jacksonville in all its charming uniqueness. Take a look below: 

Click Here for the link

https://www.oregonlive.com/expo/life-and-culture/erry-2018/08/4ce27a71797462/jacksonville-is-oregons-most-b.html

 

The Quest for the Perfect Retiree Home 

By Graham Farran

Southern Oregon has attracted retirees for years with its four seasons, culture, wine industry and outdoor activities, all combined with great heath care and affordable housing.  For the last sixteen years, we have been helping hundreds of people find their perfect retirement home and along the way we have learned a lot about the perfect retirement home and how to retire the right way! In our office, we have a standing joke that the number one most requested home in Southern Oregon for a retiree is a one story home, new construction, on one acre and in town.  To find a home like this can be hard, so they often end up compromising and end up with a two story house with the master on the bottom, completely updated, but not necessarily new, and outside of the city limits. Most of our retired clients are in great physical health but have taken care of their elderly parents and have seen first-hand what it looks like to be in your 90’s; so, they are planning for the future and want to “age in place” and not have to move. What has surprised us is how many retirees have never lived on rural property before but want to retire on a rural property. Many have spent their lives in subdivisions, and part of the attraction of Oregon is its rural feel and small population.  They have been living all their life in homes on small city lots with sidewalks, street lights, neighbors and crowds so it’s natural that they have dreamed of living in a rural setting. We have learned from our clients and have seen some important differences on how to retire. There is no right or wrong way, there are just different ways. Here are some philosophies on how best to retire.

GET AWAY FROM IT ALL
Many retirees come here with dreams of living on rural property. Many prefer to be away from a city, on a river, in a forest, with a view, but away from herds of people. We all want what we don’t have, so it’s natural to leave a state like California with 40 million people and seek a rural life. We have helped so many retirees find a beautiful piece of property – some so private you can’t see a neighbor, some with shops large enough to accommodate all their retirement hobbies, some on a river or creek, some with irrigation to start that vineyard they have always dreamed about and some with views to die for. These rural homes make for a great retirement, fulfilling many life dreams and are perfect in early retirement.  However, in many cases, when they reach their 80’s or 90’s, their rural properties become too much to handle and they call us to find them a smaller house near town and medical services.  So, the only downside is that often a rural property is not the last retirement home.

WALK TO TOWN
There is another philosophy involving retirees who want to move to a small one story, newer home, within walking distance of stores and restaurants. Jacksonville is a popular place for this. Everywhere in Jacksonville is close to town and you can walk everywhere. Retirees see themselves as aging in place and living in their last home. With our housing prices well below our neighboring states to the north and south, we are seeing couples who are able to sell their homes out of state, buy a great home here, plus have monies left over to invest in the stock market or buy a few rental homes.

HAVE TWO HOMES
We have also seen many retirees buy two homes and split their time at each. This can take many forms – one home here and one near their grandkids, one home here and one winter home in Arizona or Hawaii, one home here and one on the coast. Or my favorite, one home here and one home in the mountains, perhaps near a nice, high mountain lake. So many of our clients have turned into our friends, and what we have learned from them is to plan well for your retirement, no matter what age you are, make your retirement time one of the greatest times of your life, fulfill your dreams and enjoy those golden years.

 

We Owe It All To Ashland

Last weekend we had a great time in Ashland. It was a date night and we had dinner at MAS, a new restaurant serving a pre-fixed, eleven course dinner with a pairing of Sake or Wine. After that, we stayed the night at the historic, high-rise, Ashland Springs Hotel. When we got the reservation for the hotel, we got the last room available – which I thought was unusual. It’s only May and not yet peak time for the Oregon Shakespeare Festival (OSF) and the 11 plays that tourist flock to; but apparently OSF keeps Ashland busy 10 months a year with 780 performances. As we were leaving Ashland and headed home, I thought to myself how Southern Oregon owes much of its success to Ashland and to OSF for bringing in 410,000 play goers, mainly tourists, every year. To accommodate all these play goers, Ashland has, over the years, expanded the theaters, built scores of charming B&B’s, motels and hotels and added many incredible diverse and outstanding restaurants.

Personally, I was first drawn to this area in 1996 when I saw ads on TV for OSF. In the ads they showed the Rogue Valley, the plays, the mountains, the lakes and river rafting. This was well before there was much of a wine industry in Southern Oregon. Those ads got me interested in visiting Ashland, but I never heard of Medford, Jacksonville or any other towns in Southern Oregon until years later. As I started to vacation up here, I started to explore the entire area, rafting and Kayaking the Klamath, Rogue and even the Applegate river. I saw a huge valley on the map between the Rogue Valley and Grants Pass, so I decided to drive through it on Hwy 238, and on the way, I discovered Jacksonville and the Applegate Valley. That was a great day, and I fell more in love with Southern Oregon.

Finally, moving here in 2002 and settling in Jacksonville, I have come to appreciate that there is beauty everywhere I look in Southern Oregon and I’m thankful that Ashland drew me to this area. Every day I notice how Southern Oregon is growing. We are adding to the draw of Southern Oregon, expanding what we offer to tourists, escapees and retirees. If you haven’t seen that, think about the Wine Industry, almost non-existent when I first visited in 1996, it now has over 150 Wineries. Every quarter I look forward to reading the Wine Scene with 60 pages of articles packed with new wineries, new tasting facilities, and scores of metals being won. Our local wine industry has created a draw for tourists and locals alike. The wineries are a great way to see the local beauty of Southern Oregon while sipping wine, dining, and enjoying live music. In my opinion, our local wine industry competes well with the Sonoma and Napa wine areas, and offers tourists and locals a more kicked back, casual experience.

When I first moved here the shopping was limited, but ever sense, I have seen ever expanding shopping, restaurant and hotel offerings giving locals and tourist more options. We have seen local hotel groups along with Marriott, Hilton and other national chains expand their branded hotels each year. Restaurants are popping up all over with the latest additions, Baja Fresh, 5 Guys, Cracker Barrel, Heroes American Café, Firehouse Sub and MAS. Both local and national retail chains keep opening up and offering a never ending array of shopping choices, all without sales tax.

With the growing success of OSF, our wine industry, and the increased shopping has come the addition of Uber and Lyft to get us around easier, expansion of local roads and the badly needed Hwy 62 bypass. Our little airport has seen a record amount of passengers flying in and out and has added American Airlines, more flights and larger jets. Southern Oregon has truly become a destination for entertainment, outdoor activities and fun!

The real estate industry has been one of the big winners as our valley now has more to offer. We have a never ending amount of retirees and families escaping large metropolitan areas and moving here to start a new life. We are seeing a huge demand on real estate with very little supply of homes for sale. Last year the median home price rose by over 10%. This year we’re seeing the same increase in home prices along with a 20% increase in the number of homes sold! With sales of homes increasing at a double digit pace and few homes on the market, we’ll see lots of new homes being built and prices of existing homes continuing to rise.

Does Southern Oregon owe all its success to OSF and Ashland? I think so! Ashland has always been the first point of contact to so many tourists and the magnet that pulled me and many others to visit. Once here, you fall in love with Southern Oregon and dream of coming back. So, thank you Ashland and OSF, if it wasn’t for you, I wouldn’t be here.

Getting Top Dollar For Your Home – Stage, Replace or Remodel

Getting Top Dollar For Your Home – Stage, Replace or Remodel

Often we get asked how to increase the value of a home before selling it. Sometimes the answer is simple, and sometimes the answer if more complicated – especially, if the seller is interested in investing a little time or money. There are some improvements that increase the value of a home and some that just increase the sellability. Most sellers are prepared to get their home staged to sell, but in some cases they can dramatically increase the value of their home by replacing or remodeling. Here is a look at how to get the top dollar for your home by staging, replacing or remodeling.

Stage
  The key to create sellability is to create a clean, decluttered, and depersonalized home. Curb appeal, or more importantly, web appeal, while viewing online is critical. When a buyer approaches the home or sees the first photo online they should be visually attracted to the home. For example, groomed front gardens, fresh tanbark, fresh flowers, power washed siding, and a clean or newly painted front door. Once inside, the same theory applies – clean and decluttered surfaces free of personal photos or knick-knacks. We tell clients to start packing and start decluttering to make their home look larger and more inviting to buyers. When a buyer feels comfortable enough to sit down on your living room couch, they have begun the process of envisioning the home as theirs.
 
Replace
  Going beyond staging can yield a higher value and simpler, lower-cost projects tend to return greater value. Every year, The National Association of Realtors commissions a study done by Remodeling magazine on Remodeling and Replacement Cost vs Value, and each year they come up with very similar results. Here is the 2017 list of the return on investment of the top 5 and the bottom 3 replacement projects rated by cost recovered.
 
Project                                                    Cost Recovered
Garage Door Replacement                                                                    121.1%
Entry Door Replacement                                                                        101.5%
Minor Kitchen Remodel                                                                          100.5%
Window Replacement                                                                               93.1%
Adding manufactured Stone Veneer                                                       89.9%
Bathroom Addition                                                                                    70.2%
Master Suite addition                                                                                67.9%
Deck addition                                                                                             65.5%
 
  Notice a pattern? With the exception of the minor kitchen remodel, they’re all replacement projects that enhance the curb appeal. In general, replacement costs less and provides a bigger payback than remodels or additions. First impressions are important. The replacements that offer the greatest payback to sellers are the ones that are most obvious to buyers when they first view the house in person or online.

Remodel                                 
  The remodeling cost vs value report makes it clear that large scale jobs aren’t likely to return sellers their full cost; but, there are remodels worth doing in anticipation of an upcoming sale. Some may return 100% of their cost or more. Others may not have as much of a payback, but they can improve the market position of the property in relation to the competition. In addition, several projects can provide owners with a few years of enjoyment while still offering decent payback down the road. Kitchens still offer the most remodeling bang for your buck.
  Another way of drastically increasing the value of your home is by adding square feet; but, unless you can do it cheaply, you’re not likely to recover your full cost. New construction cost per square foot is high, and in many cases, higher than the resell price per square foot. We have seen some remarkable value added to homes by inexpensively adding square feet – usually by finishing off a daylight basement. We saw one seller double their square feet by simply adding sheet rock, some interior walls, windows, flooring and lighting to finish their basement.  In another case we advised a buyer to pay an extra $30,000 to add a usable daylight basement with a bathroom on a custom built home. Although it is not completed, the owner can complete it at any time, adding another 1200 square feet to his home with very minimal effort or cost.
If you do decide to remodel your home before selling, here are a few words of advice – make sure you complete all projects before putting your house on the market, there is nothing that turns buyers off faster than a house filled with the owners’ unfinished remodeling projects.
  So whether you decide to Stage, Replace or Remodel, just remember to consult your Realtor on values in your area and projects that will yield more than your investment. With the increasing demand for homes, and limited supply, it has led to a sellers’ market, so if you have been thinking of selling, now is as good a time as ever.

How to Build a Retirement in 7 Years   ”My Four Investment Epiphanies”

How to Build a Retirement in 7 Years ”My Four Investment Epiphanies”

My background in investments in the past has mainly been my 401K and my personal stock portfolio. Thirty five years of my life was spent in the High Tech industry so that became the majority of my stock portfolio. I have seen my high tech stocks double, triple and then crash! It wasn’t until it sold my home in Sonoma County and moved to Southern Oregon that I realized I accidentally made more off the equity in my home that I have ever made in all my stocks. This became my first investing epiphany.

That epiphany and “accidental” windfall started my obsession for real estate investing. I then invested in some raw rural land that I developed and resold more than doubling my investment. Life seemed great until 2005 when I went through an unexpected and financially devastating divorce that wiped out a lifetime of earning and savings.

Life goes on, and as the real estate market started to decline in 2007, the worst recession I have experienced, my real estate partner and I began renovating and reselling (Flipping) homes. Renovating and flipping homes can be fun and profitable but it’s a full time job managing contractors; and, in 2007, homes were declining in price, so speed was critical to how much profit you would make and we realized we didn’t have time to manage flips and work full time.

In 2008, we realized we had little retirement, so we then changed our focus to creating a stream of passive income that would be never ending and that we could retire on. With my incredible partner, we started buying rental homes seven years ago and we became very disciplined about not spending, but investing, our money. It’s easy to buy that cool new BMW or take a Caribbean Cruise, but being in my early 50’s, building a comfortable retirement income was far more important than material gratification.

Now, seven years later we have built a comfortable passive income stream that we can now retire on which lead to my second investment epiphany. You can create a lifelong income stream that is enough to retire on in seven years!   Yes, for all of you over 40 who have lost money in investments, went through a financially devastating divorce, had to start over in your career, had an expensive medical event, or have enjoyed material gratification and not saved your money, it may not be too late to build a great retirement income. Yes, you do have to work hard, you do have to save your earnings, you do have to minimize the gratification that comes from material belongs; but, you can create an unending income stream with seven years of investing!

This story could end here and I’m so glad to tell anyone who will listen, that it doesn’t take that long of heavy investing before you have a never ending income stream. If we can do it, any hard working couple can do it! But, this story doesn’t end here; it’s not over yet as there was my third investment epiphany and it’s called appreciation. While our focus was on the yearly passive income that each of our investment homes would bring us, a funny thing was happening, each of our homes was going up in value and we were building a lot of equity! Every year the value of each home has risen and our equity in each home has grown past the 25% we have invested. The median price of a home in Jackson County has gone up over 60% in the last five years.  So now we have so much equity, we can borrow against that equity in the form of a HELOC (home equity line of credit) or a refinance and buy more investment homes. Originally we put down 25% to purchase our rental homes and the banks loaned us 75%.  Now we are refinancing and are pulling out more than our original 25% investment, which means we have none of our own money invested which is an infinite return.

My last investment epiphany is if we keep reinvesting our equity we can have more yearly income in our retirement than we did while we were working! That’s an incredible thought from someone who has always worked a 60+ hour week to make a living.

Our only regret is we didn’t start investing in real estate until we were in our 50’s, but to make up for that we are teaching others to invest younger, to do what we didn’t do. I’m happy to say it’s been working and just this month we had one of our employees, who is only 23, closed on a duplex that she will live in one side and rent out the other side. It’s an amazing deal where she purchased the duplex with as VA loan which offers 100% financing and the revenue from renting the other unit will pay for her mortgage, insurance and property tax.  Bottom line she paid zero down and lives for free! In another transaction we are helping one of our clients, who is only 24, and doing a similar purchase, buying a duplex with an owner occupied loan, living in one side and renting out the other side. In his case he’s paying 3.5% down and won’t live for free but his housing cost will be under $500 month after he collects the rent.

We don’t believe real estate is the only way to make money investing; it’s just the path we chose that worked for us. We have two friends that are vigilant at studying Warren Buffet and invest wisely in stocks, we have no doubt they will do well and have a great retirement. We don’t mean to make this sound easier that it is. We have learned in life “the harder and smarter we work, the easier life is”!

We’ll leave you with the most important investment tip we have learned and that is that it’s never too early or too late to invest for your retirement, and if you continue to invest you may have a retirement income that exceeds your expectations!

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