2020 Vision of the Market

2020 Vision of the Market

Forecasting the future can be hard, but starting with a good knowledge of the past can give a clearer vision of the future. The real estate market in Jackson County has been very stable for years so it’s logical to assume the trend will continue in 2020. Based on the numbers below, it’s safe to assume that around 4,000 homes will sell in 2020 and prices will continue to rise.

Although the number of homes sold per year has stayed about the same in the past few years, the price of these homes has been increasing each year for an average of about $14,000 per house, per year. We have had very little inventory on price points below $400,000 so that has helped prices to rise.  As far as price points, we have seen a decline in home sales under $300,000 since 2016. This isn’t due to the lack of demand, but lack of supply. The most active price point was $300,000 – $350,000 which saw the most home sales. The number of homes sold from $300,000 – $999,000 has steadily increased in sales each year but the number of homes sold over $1,000,000 has been stagnant. It is a weak market for homes priced over $1 million with very few selling.

If you just looked at the housing market for the past few years, you would forecast for 2020 that about 4,000+ homes will sell and the median price of a home will go up about $14,000 and increase to a median price of $306,500 by the end of year. However, in addition to using the past to predict the future, you need to also look at the factors that are creating demand for housing and the factors that may slow down, or speed up the market.

On the positive side:

  • Jackson County’s unemployment rate is down to a low of 5.3%, so more people are making money.  Yes, we’re behind the national average, but these are great numbers for our area.
  • Interest rates are at a classic low with a 30-year mortgage averaging 3.8%, which means buyers can get more house for the same monthly payment.
  • Southern Oregon continues to increased its tourism draw and revenue, with 2019 turning out to be a good year. This is an important part of our economy and it introduces potential buyers to the area.
  • Southern Oregon has increased its draw for retirees, making them an important part of our economy. The number of Americans retiring daily has nearly doubled since 2000 and currently, roughly 10,000 people turn 65 each day, the standard age for retirement.
  • New construction in our area has increased, giving buyers more options.
  • The stock market is at an all-time high and made huge gains in 2019. High stock market prices also equate to a higher 401K retirement value, causing people to feel good about retiring earlier. High stock prices also mean there are very few good deals for investors, so we start seeing an increasing number of investors turning to real estate investments.
  • The hemp market, while having some weather challenges in 2019, has added a sizable boost to our local economy, and the demand is forecasted to continue in 2020.
  • We have seen an influx of refugees moving here as a result of California fires, especially the Camp fire in Paradise. Rampant wildfires, sky rocketing fire insurance costs, and the precautionary blackouts are reshaping life in California leaving many residents to question whether they should leave and move north.
  • We had a beautiful summer, free of smoke and with moderate temperatures, but we need to get the word out. There is still a “Fear of Smoke” for many that live outside the state. The lack of smoke didn’t seem to have much effect on our summer sales this year but we’re starting to feel an increase in buyers coming back this winter to rethink moving here.

On the negative side:

  • Many economists are predicting a recession in 2020 due to slowing growth of the global economy.
  • Global Sales are declining and large US companies are feeling it.
  • Our national debt is increasing at a record pace. With a major tax cut and increased spending bill we are experiencing a record deficit.
  • Homeowners are staying in their houses longer. The average is now 13 years which is 5 years longer than 2010.
  • Consumer debt is at an all-time high so fewer families can afford a mortgage or a larger mortgage. Consumer debt has climbed to $4 Trillion not counting mortgages.
  • The Federal Reserve has taken actions to stimulate the economy, which is concerning, as usually these measures are reserved as tactics to get the US out of a recession.
  • We had 2 summers filled with smoke. We saw some families move out of the area and many retirees chose not to retire here. There still may be a “Fear of Smoke” that keeps retirees and escapees from relocating here. 

How these positive and negative factors affect our housing market has yet to play out. My bet is that the economists are correct and the US economy will slow in 2020, but that will have little effect on our area.  With the increasing amount of fire related issues in California, combined with the large number of Americans retiring, my forecast for 2020 is that our area will see an increase in the number of homes sold and an increase in the median price of a home. If we see a second smokeless summer, we will overcome the “fear of smoke”, attracting escapees and retirees and stimulating the market for higher end homes which will be a double-digit growth in the 2020 Real Estate market.


Have questions about how your home will be affected in 2020? Let us know!

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4 Ways to Get Instant Curb Appeal in 2020

Your home’s exterior is like the cover of a book, setting the stage for what’s inside. Whether you’re interested in selling, or just want to make some improvements for your own enjoyment, adding curb appeal is often an easy and inexpensive way to make your house feel nicer and increase its value. Here are 4 projects that will help your home give a better first impression.

One of the most obvious (and most impactful) ways to boost curb appeal is to add some fresh greenery and flowers. Don’t worry if you don’t have the time or money to spend on putting in a garden—you can get the same effect by adding some planters and window boxes. Use plants to accentuate and frame key visual points, like windows and entryways, and if you don’t have room for a standing planter, hook up a hanging one. Even just one pretty plant arrangement can significantly add to your home’s exterior appearance.

Boost curb appeal by having your front door stand out instead of blend in. Painting your front door is relatively cheap and is a pretty easy DIY job, even for beginners. Opt for a bold color that accentuates and enhances (rather than clashes with) the other colors of your home’s exterior.

Quickly modernize the look of your home by removing your old house numbers and replacing them with something that has a bit more *oomph. Choose a font that aligns with the architecture of your home but that is also distinctive enough to really grab the eye. Even if you’re not super handy, replacing the numbers is an easy job that can be done in about half an hour or less.

There’s nothing welcoming about a dark entryway. If you already have a sconce or hanging pendant by your front door, replace it with something a bit more fun and fresh. Clean off all cobwebs and debris around outdoor light fixtures, which will instantly make the space appear more bright and clean. If you need some additional light sources, hang some porch string lights or use solar powered lanterns to light up a walkway.

Have questions on how to boost curb appeal at your house? Let us know!

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Going Green

By Graham Farran

I recently took a continuing education class all about Going Green, something I didn’t know much about, so I was surprised by what I learned and how much each of us can impact our environment. It was a great class and information worth sharing.

It’s surprising that focus on our environment really didn’t begin until 1969 in the United States. It was then that a series of river fires plagued our nation. Rivers in industrial areas were so polluted with chemicals from factory run off that they caught on fire, and that caught the attention of the public. During the same period, we also saw a decline of certain species, including our national bird, the bald eagle, which became a concern. Out of this concern came Earth Day in 1970, and then-president Richard Nixon formed the Environmental Protection Agency (EPA) to protect our environment.

So, what does “Going Green” mean? It means understanding that there are consequences to the environment for the resources we use and the choices we make. We can reduce our effect on the earth by reducing our ecological footprint which is much more encompassing than our carbon footprint. The 4 major ways we can control and reduce our ecological footprint are:  1) The food we eat, 2) Goods and Services we buy and use, 3) Mobility or how we get around, and 4) Homes we live in. For this article, I’ll just focus on one of the four, “Homes we live in”, and 5 ways we can improve our “Ecological Footprint” and make our homes greener.

#1 Energy Use: Decrease our energy use

Homes are one of the biggest contributors to carbon gas emissions. There are lots of ways to save energy in our home and there are many tips below. You may want to start by getting a “Energy Audit” by a 3rd party that looks at your insulation, windows, doors, and the amount of energy to heat and cool your home. You can find vendors at this URL: https://www.energy.gov/energysaver/weatherize/home-energy-audits.

  • Add a programmable thermostat – only run the HVAC when needed
  • Wrap your water heater with insulation
  • Add Solar tubes – take advantage of natural lighting
  • Close the fireplace damper while not in use
  • Run the dishwasher only when full
  • Use insulated window curtains to block the heat in the summer but let it in during the winter
  • Switch to all LED lighting
  • Buy Energy star appliances
  • Add solar panels – use natural light
  • Glazing or tint windows to keep the heat out in the summer
  • Add ceiling fans to circulate the air
  • Add dual or triple pane windows
  • Alter your landscaping by adding tall trees that shade the house
  • Buy an energy efficient HVAC. There is a SEER rating for efficiency of HVAC systems. The higher the number the better – 14 or higher is good

2) Water Efficiency: Conserve water by adding features that decrease indoor/outdoor water use

  • Add low flush toilets OR dual flush toilets
  • Replace your water heater with a tankless water heater
  • Install low flow shower heads
  • Add water collection devices. Rain barrels, capture rain water from the downspouts
  • Reuse the grey water from your sink for your yard
  • Landscaping for energy efficiency. Use natural landscaping in your area that doesn’t require supplemental irrigation

3) Sustainability: Using renewable products is a key

  • Consider renewable and resource-efficient materials
  • Eco-Friendly flooring such as Bamboo, Cork or Hemp
  • Recycled flooring
  • Walking Score – when you buy a new home look at its walking score, can you walk to services?

4) Materials used:  Any time you update or remodel consider using environmentally friendly products

  • Use recycled glass products for
    • Countertops
    • Flooring
    • Backsplash
    • Lamps
  • Linoleum vs vinyl is more eco-friendly
  • If you are adding insulation, consider recyclable
    • Cotton
    • Cellulose – recycled paper

5) Indoor environmental quality: Be healthier and safer for occupants

  • Use Eco-friendly carpeting with natural fibers
  • Use natural insect repellants
  • Use green paint, VOC paint (Volatile Organic Compounds)

There are many benefits to “Going Green”, such as reducing your carbon footprint, saving money, tax incentives and a healthier lifestyle. If we all implemented just a portion of the ideas presented in this article it would make a huge difference to our “ecological footprint” and go a long way to protect our environment ensuring future generations clean water, clean air and the beauty of nature.

6 Ways Real Estate Builds Your Wealth

By Graham Farran



Real Estate has been a great investment for me and many of our companies’ clients. Many novice investors look at appreciation as the main benefit to investing in Real Estate, but I see that as just icing on the cake.  Here are the 6 major ways that you can build wealth with real estate.

#1 Real Estate gives you Predictable & Stable Income.

In any area you can find out what the “market rent” is and it’s very consistent. Rents in Southern Oregon run around $1 per square foot, higher in areas like Jacksonville and Ashland and cap out at about $3500 month regardless of the home. When you invest in Real Estate you can predict almost exactly what your income will be.

#2 Real Estate Investments can be Leveraged

Your investment can be 4 to 5 times greater than your down payment. The lending bank requires 20% to 25% down for an investment property and they will invest 75% – 80%. So, with $40,000 down you can buy a $200,000 investment. When it comes to your return on investment, you make a return on your cash investment or you can make a return on the spread between the interest on the loan and the rate of return on the property. In some cases, the leverage can be a lot higher; like buying a home with only 3% or 4% owner occupied financing and then turning it into a rental after a required one-year period of living in it. You can also buy a duplex or tri-plex with a small down, owner-occupied loan then live in one of the units and rent out the rest. Where else can you use other people’s money to buy and investment? You can’t borrow $200,000 to invest in the stock market and secure it with the stock you buy. So, leverage is, to me, the biggest benefit for investing in Real Estate.

#3 Real Estate Appreciates in Value

While appreciation is not guaranteed, real estate values in the US have increased an average of 6% a year over time. I always analyze a real estate investment based on its return without adding in appreciation, and see appreciation as icing on the cake.

#4 Real Estate Provides Equity Buildup

Equity builds in two ways.  Every year your tenants rent checks go towards paying down your mortgage so you build equity by debt reduction. At the same time appreciation causes home prices to go up which also causes your equity to build, so your equity grows in two ways

#5 Real Estate is Improvable

You can increase the value of your investment property with “elbow grease” and “sweat equity.” Real Estate is an investment that with hard physical work you can personally increase its value, or write a check to a contractor to improve its value.

#6 Real Estate provides many Tax Breaks

There are 4 ways of saving on your taxes by investing in real estate.

  • DEDUCT all expense incurred in owning real estate. Property upkeep,
    maintenance, improvements and interest paid on the mortgage. The deductions offset income and reduce your overall taxes.
  • DEPRECIATE your rental home (minus the value of the land). The deductions offset income and reduce your overall taxes.
  • DECREASED tax rate when you sell real estate. Real Estate profits, whether they be rent income or profits for the sale of a home are subject to capital gains tax which is far less than the tax you pay on earned income.
  • DEFER any taxes due by using a 1031 Exchange. As long as you re-invest in like properties, your profits from a real estate investment never get taxed until you sell that investment property and don’t re-invest. What I’m seeing now is elderly couples passing away and leaving their real estate investments to their children who, upon inheriting the properties get to value those properties at current value without paying any taxes. Taxes are only paid if they sell those investment properties in the future for more than the value of which they inherited it, and then, they only owe tax on the value that it has appreciated since they inherited it.

So, how do you get started?

Unless you can come up with 20 – 25% down for an investment property the best way to get started is buy a home, live in for one year, then convert it to a rental home. By doing this you can get an owner-occupied loan with as little as Zero to 3% down.  You can even buy a duplex or tri-plex, with an owner-occupied loan and live in part if and rent out the rest. If you already have a home, see if you have enough equity to borrow against for the down for  your first rental property.

Once you own your first rental property, it’s much easier to get the down for your second rental property. Here are three ways:

  • Save the profits from your first rental property
  • Borrow against the equity of your property (HELOC loan) 
  • Refinance your rental home and take out the equity

As time goes on and you have many rental properties, you can accelerate the acquisition of your rental properties. You can use your rental profits or equity to buy a few rental properties per year. You can count your rents minus your expenses as income to qualify for more investment loans. My personal experience has been I’m busy with my day job so when I get around to looking at the equity in my rental homes, I’m always pleasantly surprised. I find that the loans have been paid down substantially enough to give me a debt reduction and appreciation has caused the value of the home to go up substantially, even doubling in some cases. After I analyze how much equity I have built up the only questions is…. what can I buy next?

Here Comes the Hemp

In the last few months we have seen an explosion of hemp fields being planted along every road you drive as hemp quickly becomes the largest agricultural crop, surpassing pears and vineyards, in Southern Oregon. Based on statistics from the Oregon Department of Agriculture, Jackson County has 8,578 acres planted giving the county the distinction of being the largest grower of Hemp in Oregon. To provide some idea of the scale of hemp, Jackson County has 2,850 acres of grapes and 3,800 acres of pears.

The question becomes, what will be the effect of Hemp on our valley? Is Hemp a boom to our local economy because of the high demand, or a determent, because it is a cousin of cannabis and has a distinctive odor that some find objectionable.

Hemp is one of the fastest growing plants and can be used to make a variety of commercial and industrial products, including rope, textiles, clothing, shoes, food, paper, bioplastics, insulations, biofuel and on and on. In Southern Oregon, it is being grown mainly for CBD, or cannabidiol, which some studies suggest result in various health benefits as they react with the human body’s endocannabinoid system. I’m not sure what that means, but I do know many of my friends and family tout CBD’s healing capabilities in helping depression, anxiety, pain, and sleep disorders. Although I haven’t read a lot of conclusive research yet, the FDA has approved a drug using CBD called “Epidiolex” for the treatment of seizures associated with epilepsy. The FDA is in the process of testing many drugs using CBDs so how wide spread its use will be in prescription medicines, will soon be known.

The short-term effect on our local economy is being felt. Across our valley, pear growers, cattle ranchers, hay growers, farmers and those with pasture land that may have sat empty for years are now leasing their properties to Hemp growers for $1,000 – $5,000 per acre for the season. It’s great to see our local farmers making money again. Even minimum wage workers can leave their jobs for Hemp field work that starts at $14 an hour and goes up to $20 hour, all paid above the table, with taxes and Social Security. As for the Hemp growers they can yield $40,000 to $50,000 per acre, but the upfront costs to get the field ready can run to $20,000 an acre.

A rough calculation based on the 8,578 acres planted in Hemp times $40,000 an acre adds up to a crop that can boost the Jackson County agricultural economy by more than $340 million this year.

My personal view comes from living in rural Sonoma County and working in the San Francisco Bay area prior to moving here. The area I lived in was all farm land and once a year the dairy farmers would spray all their fields with a fertilizer consisting of cow poop and water. That caused quite a smell and attracted swarms of flies for about a month. You quickly got used to living in a rural area among farms and I realized fertilization was a necessary part of farming. Also, being from the SF Bay area, which was home to thousands of high-tech companies, I was surprised by the lack of good paying jobs and the lack of a successful economic base when I moved here. The greatest growth that I have seen in our local economy has come from tourism, the wine industry and the increasing number of escapees and retirees who move here and bring their money or jobs with them. It just feels really good to see our local economy growing from within, and the thought of adding over $300 million in to the economy is a nice boost to all of us.

Time will tell if the demand for Hemp increases and if the climate in Southern Oregon, the local expertise and the facilities will sustain a strong industry for the foreseeable future. But for now, let’s enjoy the growth in our local economy and remember, when you smell that distinctive odor, you may be smelling the smell of success.


To Be Retired In Jacksonville

For years we have helped retirees find their perfect retirement home in Jacksonville. It’s very enjoyable seeing their excitement as we tell them all about Jacksonville and Southern Oregon. Most of them have come from out of state so there is lots of education that goes on. From home prices, cost of living, weather, outdoor activities, theaters, restaurants, music scene, shopping, wineries, and culture; there can be lots to learn and lots of differences from the areas they are moving from.

This education has worked both ways as we have learned a lot from our retiring clients. We have seen a lot of smart planning, with some of our clients buying homes in Jacksonville years before they retire. They have us manage their retirement home as a rental home, giving them a yearly passive income until they are ready. When they do retire, they do so in a home that has appreciated in value and may be way beyond what they might currently spend for a retirement home. We have also seen retirees do a 1031 exchange from a rental property they own out of state to their future retirement home in Jacksonville giving them tax advantages.

We have also seen, from our newly retired clients, what a retired lifestyle looks like living in Jacksonville. One of my favorite stories is a day I walked into South Stage Cellars at two in the afternoon to pick up my credit cards I had inadvertently left the night before. As I entered the tasting room, I was greeted by four of my newly retired clients, all at the bar wine tasting. They quickly offered me a seat but I had to decline, telling them I had three more appointments to attend. It must be nice to be retired.

Just recently we had family visit us for a week and we decided to have a staycation and pretend we were retired without worries and with less responsibility. As it turned out, it might have been one of our best vacations. The first day started without the alarm going off and we wandered down the street to Good Bean for breakfast. There you could see tables of retired men and women, in what look liked a weekly gathering, catching up with each other. After breakfast we took our visitors on a tour of downtown, stopping at each eclectic store, buying gifts and gadgets you’ll never see in malls. Soon lunch came and we found ourselves in the sun on the back porch of Bella meeting up with the rest of our family. That evening we hiked up the hill to see The Little River Band at Britt, from our seats in front of the stage. It was a great concert, and I could only think of how lucky we are to live in a great town that just happens to have an amphitheater that attracts some of the best live music and comedy acts I have seen.

The next day involved an early morning hike in the Jacksonville woodlands, breakfast at Mustard seed, lunch outside at Jacksonville Inn and then on to wine tasting at South Stage Cellars. That evening we headed out to Red Lily to picnic on the Applegate River, hear live music and enjoy the beauty of the surroundings. We even watched a river otter swim up stream.

On the third day we woke up late, took a trolley ride around Jacksonville then headed to DANCIN for a great meal, great views and some great Pinot Noir. After that, we took our grandkids for ice cream under the La Fiesta restaurant. The kids were more enamored by the spoons that changed colors as they got cold than they were by the ice cream. For the adults, we were just grateful to hang out with the kids as an excuse to enjoy ice cream. After an afternoon nap we had a big BBQ at home for our guests and all of our family, then sat in our front yard and watched the energy build as 2000+ concert goers ascended up the hill to that evening’s concert. The evening was topped off when Jacksonville came alive with those 2000+ somewhat inebriated concert goers descending down the hill, many staying to enjoy the local restaurants, pubs and bars.

The staycation could have ended here, but on the fourth day, we headed up to Lake of the Woods for three more days. We swam, kayaked, boated, BBQed, hiked, roasted smores on the fire and reveled in the smells and sights of the high mountains. We even took a drive to Crater Lake, ending up at the historic lodge for lunch then sitting on the rocking chairs overlooking the lake.

We headed back to Jacksonville for the last day of our pretend retirement. We hung out at Daisy Creek Vineyards, listened to live music and talked about not what we did, but what we didn’t do. There wasn’t enough time to raft or Jet boat the Rogue River, go wine tasting in the Applegate Valley, see a play at OSF, go to a dinner show at the Cabaret, drive to the Redwoods or try the Jacksonville Segway tour.

The week went by too quickly, and when we dropped our relatives off at the airport, they vowed to do this again next year – another staycation in Jacksonville pretending we are retired. As we drove back into town, we realized Jacksonville is not a town, it’s an experience.