In an article two months ago, we talked about how the real estate market was being negatively affected by the smoke and repeated closures of interstate 5. Now that summer has ended, we can look back and survey the actual effect the fires had on our summer home sales.
Since 2013, the real estate market in Jackson County has seen year over year growth in both the price of homes and the number of homes sold. 2018 will most likely be no different, except that the pace of growth will be slowed down due to poor summer sales. If you look at this summer’s sales, July 1st through September 30th, the number of homes sold decreased by almost 15% compared to last summer. The decrease came in the higher end real estate markets, mainly Jacksonville, Ashland and East Medford. These are areas of higher end homes that cater heavily to out of state buyers. Jacksonville was the worst hit with 46% less homes sold this summer than last summer. Not everyone saw home sales decline as we had very healthy increases in homes sales in West Medford, South West Medford and areas of lower priced homes catering more to the local buyers.
Home prices this summer increased an average of 4.5% over last summer. This number represents one of the lowest increases we have seen in a while and, again, areas of more expensive homes were harder hit, some seeing a price decline. The median price of homes in Jacksonville fell by 4.1%, Ashland fell by .6%, and East Medford increased by only 3.4%. In areas of lower priced homes, we saw some drastic price increases this summer with North West Medford increasing by 25.5%, West Medford increased by 16.2% and White City increased by 9.2%. The overall median price of a home in Jackson County has increased over 43% the last 5 years and is currently at an all-time high of $290,000, with it likely to hit $300,000 by the end of the year.
To sum it up in one sentence, this summer brought increased home sales and higher prices for lower priced homes and lower prices and lower sales of higher priced homes. The local home buyer continued to shop for homes but, by all accounts, the out of state buyers chose to stay home.
The question now is how quickly the higher end housing market will recover from a smoke filled summer. We hope there isn’t much long term effect to our market but we do know some of our clients have decided to retire in other areas with fewer forest fires. We also are seeing some first time home buyers that are getting squeezed out of the housing market by rising interest rates.
On a positive note, the economy is doing well, our area is growing in population, we have full employment, and 10,000 baby boomers are hitting the retirement age of 65 every day. Many of these retirees are deciding to retire to areas outside of where they are currently living that are less crowded, less expensive, and offer more activities. Southern Oregon is perfectly positioned to take advantage of the exploding number of retirees, as long as we can curb the fires.