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State of the Ashland Market

After a number of years of downturn, it is refreshing to see a rebound in the real estate market in Ashland and Jackson County. The hard economic times that we all weathered through that started with the crash in the real estate market that was caused in large part by the lending practices and gambles made by investment firms on Wall Street seem to have run their course…this time.

We all hopefully learned from this cautionary tale, although when greed abounds I’m sure we are destined to make the same mistake again. But as individuals, we can all make decisions that are based on our personal needs and goals and stay within the bounds of safe real estate purchasing.

I anticipate based on my own research, and that of the head economists from both the Realtor and Home Building associations, that we have started a recovery that is expected to last many years. While I am personally hoping that the frenzy doesn’t lead again to another bubble and responsible purchasing and lending are the rule, we all need to be cautious and not overextend with the same misconception that real estate prices “NEVER” go down.

So where does that leave us today? The market here has definitely picked up steam and sales have been very strong. I said for years to people who asked me if we had hit the bottom of the market yet that the only way we would know would be 6 months to a year after it happened. And according to the numbers, I would say the bottom occurred back in the summer of 2012, although it could be argued easily that it was the summer of 2011.

Now that we have a full year of a strengthening market under are belts, it is a good time to look at what the numbers are.

In the summer of 2012, 49% of houses sold in Jackson County were distress sales, meaning either a foreclosure or a short sale.  In 2013 that number dropped to only 19%. While still significant, it is a huge one year improvement.

 

In the summer of 2011, the median sales price for a home in Ashland was $275,000. In 2012 the median sales price was $292,000. In 2013 that price jumped to $322,000. That is a 15% increase over 2 years. While I would be hesitant to call it appreciation, it does show the strengthening of the market due in large part to the reduction of distressed sales whose competition drag the market price down of all homes.

 

In 2011 there were 1650 houses for sale in Jackson County, and 300 houses for sale in Ashland. 2012 saw those numbers drop to 1210 and 238 respectively. Those numbers in 2013 held fairly stable over the year at 1181 and 230. This shows what looks like some stability in the supply side of the market.

 

The number of sales in May-July of 2012 in Ashland was 83, whereas the same period in 2011 was 62. That number increased to 100 sales in 2013. That is a 40% increase in the volume of sales in a 2 year period.

 

Now the final number I will throw at you is the absorption rate, which is just a fancy way to say supply vs. demand. In the 3 month period stated above, an average of 33 houses a month sold. There are 230 houses on the market. If no new houses came on the market, and houses continued to sell at the same rate…there would be no available inventory left in 6 months. Common wisdom states that a 6 month supply of housing is a stable market. Less than 6 months is a sellers market, more than 6 months is a buyers market.

 

So the conclusion is that we are looking pretty good at the current time in the housing market. There are buyers out there looking, and sellers are feeling that the market is healthy enough to sell. Those looking to move up or downsize feel the ability to do so. But if there is one thing the last 10 years has taught me is that anything can happen. All we know for sure is what is going on today, and we must all make out best decisions based on that point in time reference.

Where are the buyers searching

Common sense tells us that the lower the price, the more people who are in the market looking to buy.

Some statistics that I just got demonstrate what price ranges are being searched by consumers. These are numbers provided by the major players, Zillow, Trulia, Realtor.com, etc.

Last month, there were 28,171 views of 3 bedroom properties listed between $100-200k. There were 23,551 views of 3 bedroom properties between $200-300k.

And then the drop-off begins. Between $300-400k the number of 3 bedroom property views dropped to 11,132.

Just an interesting thing to keep in mind when looking at how much competition there is in the market with you. As a buyer, if you can raise your price range, you become a bigger fish in a smaller pond. And as a seller, if you can lower your price, you are in a pond with a whole bunch more fishes.

Eagle Point Inventory

I know I usually don’t report on Eagle Point homes for sale. But I am looking at property out there for a client of mine, and finding some interesting statistics. There are currently 4 houses for sale in Eagle Point for less than $200,000. There are 16 pending sales, and so far this year an average of 10 sales are happening a month. So if you have a house in that price range that isn’t selling…there must be something really wrong with it. And if you are looking to buy a house in that price range, better jump quick and be prepared for being in a multiple offer situation.

Inventory Is Low


Well, if you were looking to time the bottom of the market to buy a home, I think we found it about 6 months ago. All indications point to increasing prices. The most drastic one is the lack of inventory right now. There is a 3.5 month supply of houses to buyers right now.

 

2200 Houses for Sale 2010
1600 Houses for Sale 2011
1200 Houses for Sale 2012
What this means is if you are looking for a house right now, there is not a lot to choose from, but prices are still down considerably from 5 years ago.

And if you are looking to sell, now might be a good time to put your house on the market while competition is low.

Multiple Offers? Consistently!

So if you are out in the local real estate market in Jackson County right now…and say shopping for a house under $200,000. You may have notice something.

There are multiple offers on almost every house.

Why is this?

Well, it comes down to that basic economic principle of Supply and Demand.

Currently in Jackson County, there are 376 houses for sale under $200k. That is about one third of all of the homes currently available for sale. In an area of a hundred thousand people, 376 homes is a very small number.
So that is the supply….pretty darn low.

But you may wonder…in this economic environment, what is the demand for people purchasing homes? Well, in that same price range, the number of homes under contract currently is 371. Or in other words, for every house currently for sale, there is one house under contract. In addition, in the last month, 153 homes sold.
So demand is high.
If no other homes came on the market in that range…in 2 months or less the supply would be exhausted.

What is normal in a healthy real estate market for the ratio of supply vs demand?
Many experts say a 6 month supply.

And that is why there are so many multiple offers.

What everyone seems afraid to ask or….

What everyone’s afraid to ask….OR….. The “How’s the Market” Blog

Another year has passed in the great recession that we all are going through. It has been a tough time financially for many of us.
Being a real estate professional, I still get asked how the real estate market is, although admittedly not as often as it used to be. I believe many people don’t want to hear the answer.
So I will do my best without rambling to let you know what I feel is the state of the local real estate market.

This Is The New Normal

I don’t believe we are going to be seeing any big shifts in the real estate market in the coming year(s). What you see out there right now is pretty much how I think things will stay.
My statistics show that:
  • Roughly the same number of houses sold last year as the prior year.
  • Number of houses on the market for sale (inventory) is down 24% from last year.
  • Median prices are staying somewhat level…slightly up in some areas, and slightly down in others
  • Average days on market for listings is stable at about 90 days
  • Distress sales (Foreclosures and Short Sales) make up close to 50% of the solds…and 25% of the active listings
What this boils down to is there are a lot of great deals out there…especially in the distressed sale market. This can be good for those who are looking to buy.
However, those looking to sell are going to continue needing to compete with the distressed properties.
For more information on the Ashland Real Estate Market, visit my website. www.AgentInAKilt.com
Search for houses currently for sale at www.RealEstate-SouthernOregon.com

Ashland Summer Not So Hot

This has really been another mild Summer in the Rogue Valley. For an area that has normally seen a handful of 100+ degree days by now, they are nowhere to be seen.

Image by Cle0patra via Creative Commons

This is good news to many who do not like that hot weather…plus good news to keep the forest fires down, and the rivers and lakes full.

Unfortunately, Ashland Real Estate is not as hot as it could be either. Since Summer Solstice, there have been 36 sales in Ashland. There are currently 30 pending sales to go along with that.

But there is a supply of another 195 houses still on the market. With an average of about 19 houses per month selling, that has Ashland at a 10 month supply.

So to relate that back to the weather analogy.

If the normal real estate temperature at this time of the year is pushing 100 degrees, then this year we probably are looking at temps around 85 degrees. Still fairly pleasant, but definitely not hot.

Okay, enough silly weather analogies. I’m going to go out and enjoy the pleasant 85 while we’ve got it…cause you all know that fall is right around that next corner.

Cheers.

P.S. Remember…if you want to look at what houses are currently on the market you have find Ashland Real Estate Listings Here.

Ashland Real Estate Statisics-The lazy edition

Writer’s Block—-I’m going with that as the excuse for my extended absence. To push through the block…I am re-posting a previous blog post, except with all of the numbers current. If you want to see how it compares to the post in September of 2009, CLICK HERE

Ashland Oregon Real Estate Statistics as compiled from Southern Oregon MLS on March 25, 2011.

Currently there are 218 Residential listing in the city of Ashland. 41 Pending sales, and 22 places closed escrow in the last month. That actually is pretty good news as far as I am concerned.  An absorbtion rate (length of time at current sales volume for inventory to run out) of  just about 10 months is really pretty good in the current market. The breakdown goes like this:

  • 32 Listings under $250k with 17 pending sales and 13 closed transactions last month…absorption rate of 2.5 months.
  • 47 Listings between $250k-350k with 12 pending sales and 5 closed transactions last month…absorption rate of 9.4 months.
  • 50 Listings between $350k-500k with 6 pending sales and 3 closed transactions last month…absorption rate of 16.7 months.
  • 37 Listings between $500k-750k with 3 pending sales and 1 closed transactions last month…absorption rate of 15 months.
  • 24 Listings between $750k-1 million with 2 pending sales and zero closed transactions last month…absorption rate of 24 months.
  • 28 Listings over $1 million with 1 pending sale and zero closed transaction last month….absorption rate of 56 months.

(For those who want to do the math with me—I am calculating each pending sale as a half a sale for the purpose of absorption rate on the prices above $500k. Kinda need to do this to avoid having to divide by Zero…which just give me a big ‘ol E on the calculator. For those who don’t know what I am even talking about…ignore the stuff between the parenthesis)

 

End of Tax Credit

Pending sales are up nationally as the rebound from the “end of the tax credit” has worked its way through. I listen to a podcast from NPR called Planet Money.  They do a great job of making the financial news that we all keep hearing about, whether from the government, banks,  or Wall Street, etc…make sense. I strongly encourage you to  check it out.

But one thing they have had shows on recently is the inherent benefits and flaws from incentives. That incentives seem to be the best way to encourage behavior, but they almost always produce unexpected consequences.

You can see from the below graph the consequence of the tax credit, and you can make your own determination if it was worth the cost.

On a local note, our pending sales in Jackson County are just about where they were at this time last year.

An analysis of the effect of the home buyer tax credit

My last newsletter asked the question of what effect did the home buyer government stimulus money have?

My answer was I thought that the short term impact was huge. But I was really curious about what the long term impact was going to be.

And I concluded last time we’re really just in a wait and see mode to fully assess the impact.

And now we have waited…and now we can see. From the graphs, I would say that the tax credit worked, sort of. There is a definite bubble of activity that happened in April, but it was followed by a depression in July. And now, most indicators are pointing to being roughly the same as last year.

Therefore, what I thought might happen did appear to come true. People who were thinking of buying rushed their decisions, and bought early. Which did reduce inventory temporarily, but the after effect lull caused that figure to return.

I think the benefit of the credit, and a reason to do something similar again was to give 1st time buyers some cash to make repairs that are needed on many of the foreclosed homes that are dominating the market at the moment. But I could just as easily argue that the effect of that is probably not worth the cost of the entire program.

A different program that targeted foreclosed homes, and provided extra money to make them livable would be more likely to help. There are loan programs that are designed to do this, such as the FHA 203k loan, but the regulation and requirements for this particular loan can be a challenge to qualify for. I guess what I would like to see is a more streamlined method to borrow home improvement/repair money and incentives to do so. Especially for houses that will be primary residences.