The U.S. economy is a mess. The continuing coronavirus pandemic has led to scores of business closures, the worst unemployment since the Great Depression and the steepest economic contraction on record.
Yet, despite it all, the U.S. housing market has been spared and is experiencing a record year. In our valley, well, it can only be described as “hot” and the best real estate market since 2005 for sellers. Cooped-up buyers are seeking larger homes, first time home buyers want to cash in on record-low mortgage interest rates, and escapees are fleeing large metropolitan areas with the newly given option of working from home. They are all battling it out over a very limited supply of properties for sale or for rent in our valley.
Because of the demand, home sales and home prices are both on the rise. Homes sales in Jackson County grew by 9% for the 3rd quarter with 381 homes selling per month. Home prices increased by 11.3% in the same quarter, bringing a total increase in home prices to 42.4% since 2015. However, inventory dropped 64% over last year and we are down to 342 homes for sale, which is less than a month’s supply. We are experiencing the highest demand combined with the lowest inventory in the 18 years that I have been a Realtor. On the rental side, we have seen vacancy rates lower than 1% throughout the year.
In the midst of this record demand and low supply, we experienced the most devastating fires in our recent history – the Almeda and Obenchain fires, which destroyed well over 2,000 homes. So, now our valley desperately needs homes for fire victims as well as retirees, escapees and for those who seek to downsize or upsize. Every week our property management department gets scores of calls for rental housing and we have very little available. On the sales side, we watch buyers pounce on every home that becomes available. Some homes, especially under $350,000, are getting as many as 8 to 10 offers, so one buyer gets the home and 9 buyers lose out. Our valley desperately needs more homes for sale and more homes for rent to keep up with the demand on both.
It may take years to catch up to the housing demand but we can start today and we can all help. Expert Properties is helping by waiving six months of management fees for any owner that has an empty cottage, ADU, or vacant home that we can rent out. In addition, we are donating $1,000 per listing sold to local charities helping fire victims. If we all chip in, we can help our valley heal. Details of these promotions are printed on the back page of this publication.
Another encouraging change is that we are seeing our cities increase the number of acres that are zoned for Multi-Family Residential (MFR), allowing more homes to be built on one lot. This will increase the number of duplexes, triplexes and townhomes being built and accommodate more families in need of housing.
In a similar move, the City of Grants Pass is now allowing two Auxiliary Dwelling Units (ADUs) to be built on each city lot, provided there is space and you meet all the requirements. To help lower the cost of these ADUs, the city planning department has posted pre-approved ADU plans on their website that can help you get started. There has also been a lot of talk in the Oregon State congress to allow one ADU to be built on each rural lot located in our counties. To my knowledge, this is still in the talking stages.
With demand for homes booming and supplies dwindling we face a major shortage in homes for sale and for rent. Government needs to do their part by reducing restrictions and speeding up building approvals. We can do our part by renting our vacant homes, ADUs, cottages not in use and donating what we can to rebuild homes lost to the fires that were uninsured or underinsured. If we all work together, we can increase the supply of homes, help those who lost theirs, and continue to see our valley prosper.