Real Estate Values Up 32.1 Percent!
In 2012 we ended the year with a nice 8.4% increase in existing home prices in Jackson County. However, this is just the beginning of the story as in the last three months we have seen the median price of existing homes in Jackson County climb by 32.1%. Median prices have gone from their low of $140,000 to $185,000. On top of this price increase, the inventory of houses available for sales has declined 30.5% to only 823 on the market for sale.
This does not mean that everyone’s home has gone up 32.1% but what it does mean is our real estate market has bottomed out and is now growing faster than the national average. Median prices rise because of a combination of factors and in our market we have seen major recovery in both the entry level and high-end markets. For homes under $200,000 there are multiple offers causing prices to be bid over the asking price. In one case, last month, we represented a buyer on a home in South West Medford that came on the market and in three days there were seven offers, three of them over the asking price. It is surprising but the once dead market of over $500,000 increased 40% since January 2012. What is even more encouraging is there are more homes over $500,000 now pending than sold in the last 90 days. This illustrates that the high end market is experiencing a nice rebound and this pattern is likely to continue.
Distressed properties, which have dominated the market since the financial crash, have decreased to less than 13% of the inventory from their previous high which exceeded 50% of the inventory. We are still seeing a number of homes going into default but they are dwindling. As prices climb less homes are under water and apt to default back to the lending bank.
Thanks to the Federal Reserve, mortgage interest rates remain at an all time low. This has resulted in mortgage payments being less than tenant’s rent and has allowed investors to secure properties with returns exceeding 10%.
So what does the future hold? Who knows, it’s a world economy but with our stock market reaching an all time high, employment increasing and our real estate values soaring back, I think the future looks pretty good.
Statistics on Existing Home Sales in Jackson County*
December 2012 – February 2013
- Median price per home: Up 32.1 % to $185,000
- Average days on the market: 62 days
- Number of homes for sale: Down 30.5 % to 823
- Interest rate: 3.58% (30 year fixed, per Bankrate.com)
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*Statistics are from the Southern Oregon Multiple Listing Service.