When you look at home values, you get a better picture if you look at long-term trends and not short-term trends. Quarterly, home prices go up and down, but yearly growth and long-term growth give you a much better picture of where the market is going.
Home values in Jackson County hit their all-time high in 2006, but then began to fall as the housing recession hit. Prices continued to decline until they leveled in 2012, and began to rise in 2013. Prices have continued to rise into 2016, and we ended the year with prices increasing 62.4% since their low in 2012. Home prices are still 7.5% lower than the all-time high in 2006, so we have a year or so before home prices are back to their all-time highs. We predict that home prices will continue to increase in 2017 due to three factors:
1. There is a very low supply of homes on the market which is pushing prices up.
2. Rental rates are extremely high, so in many cases it’s cheaper to buy than rent.
3. We have an increasing amount of retirees moving to the area.
All three of these trends will lead to higher home prices.
As for any average growth in home prices, you have some areas that have faster price growth than others. Lower priced homes in Medford and Central Point have seen price growth that is twice that of price growth in Ashland and Jacksonville. Here are some numbers:
5 Year % Change in Existing Home Prices _ Median Price in 2016
Ashland + 39.1%$394,000
Talent + 64.8% $278,500
Phoenix + 47.6% $222,900
Jacksonville + 43.8% $365,000
East Medford + 61.1% $265,750
West Medford + 85.3% $161,250
Eagle Point + 63.3% $249,000
5 Year % Change in Jackson County: 62.4%
The number of homes selling is also on the increase even though there is very little inventory available. In 2016 there were 2633 Homes that sold in Jackson County compared to an all-time high of 2647 in 2006.
The rental market continues to see 2% vacancy, which is the lowest level since 2000. Rental prices have increased and supply is limited so we see the same trend continuing for 2017.
Mortgage rates have increased and the average 30-year fixed mortgage rates are expected to average over 4% in 2017. The Federal Reserve announced they might increase the prime rate in 2017 which may drive mortgage rates up further. That said, as mortgage rates are increasing, some government loans, such as FHA, have decreased the fees they charge for mortgage insurance so the net to the borrower can be the same as prior to the increase.
As we begin a new year and a new administration leading our nation there is a lot of uncertainly, but local home sales in Jackson County seem more affected by the number of aging baby boomers retiring than by any other factor. At last, home prices are nearing the record high and home sales are in reach of the all-time record, and best of all, the trend seems to be sustainable.