Real estate saw year of contrasts – Medford News, Weather, Sports … – Mail Tribune

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Real estate in 2022 was a tale of two halves for Jackson County.
First came a robust market, which slowed dramatically in the second half as interest rates rose.
From January through June, 1,910 sales were recorded, but that declined to 1,416 for the second six months of 2022, a 26% decrease.
Prices, however, remained very steady with a median sale price of $430,000 in the first half, declining ever so slightly to $429,950 in the latter half of the year.
Colin Mullane and Scott Lewis with the Rogue Valley Association of Realtors talked about the market at a press conference in Medford Monday.
“It’s not a sellers’ marker or a buyers’ market,” said Mullane, who is with Full Circle Real Estate in Ashland. While prices remain high for sellers, they would have to purchase a new home at higher interest rates, which affects buying power. With a 7% rate, buyers could afford a $400,000 home versus a $600,000 home with a 3% rate, he said.
For all of 2022, 3,404 residential properties were sold, with a total value of $1.67 billion in Jackson County.
For the last three months of 2022, urban sales were down to 409 units compared with 738 for the same period in 2021.
Inventory of homes on the market started low but rose, then fell later in the year. In January, 337 units were on the market, but in July that figure had increased to 909.
At the end of the year, there were 597 homes for sale throughout the county, with potential sellers likely holding back due to the interest rates.
The 30-year, fixed-rate mortgage is the most popular financing vehicle. Those rates currently are at 6.3% after going over 7% in October. They started last year just above 3%, increased to 4% and exceeded 5% in late April. They first hit 6% in September.
Buyers are adjusting to the new mortgage rate levels, said Mullane. Those who didn’t want to take out a mortgage in the 4% to 5% range earlier sometimes regretted not doing so when they exceeded 7% in October.
“If they can afford the mortgage rate, even if undesirable, they are making the purchase,” said Mullane. The buyers are hoping to refinance later.
Mortgage rates over the past 50 years have averaged 8.5%, while the 3% rate of early last year was an exception, said Lewis, who is with John L. Scott Ashland. The low rates of recent years were a result of federal money policy keeping borrowing costs low.
Mortgage lenders are coming up with creative ways for buyers to help finance purchases, said Mullane. One vehicle is a 2-1-30 mortgage, where the buyer would finance at the current rate, but be able to lower payments if there are lower mortgage rates after the first and second year, before switching to a fixed, 30-year rate.
The new arrangements come with much lower costs to assume the lower rate rather than conventional refinances, where costs might run from $5,000 to $7,000 on a $400,000 home, said Mullane.
Mullane tells buyers to work with lenders to determine what sort of mortgage they can secure. In some cases, buyers will lock in a mortgage before they even begin looking for a home.
Many experts are predicting the rates will fall to between 5.2% and 5.7% in the latter half of 2023 which could support both buyers and sellers. “It’s like a gate. The buyers are behind it, waiting for it to open,” said Mullane.
Lewis says home ownership makes sense even with today’s rates when you look at appreciation over the years. Since 2002 on average in Medford, home value has increased by 161% for an average of 5.3% per year.
Median prices compared with 2021 saw increases. In Medford they went from $379,000 to $415,000, an 8.5% increase. The median increase was less dramatic in Ashland, where they went to $565,000 from $550,000 in 2021, a 3% increase. Central Point saw prices go from $385,000 to $399,000, a nearly 4% increase.
Medford’s increase is more representative of the entire county because it contains a mix of low-, middle- and high-cost homes, said Mullane.
Sales of rural properties declined from 187 units in the last three months of 2021 to 112 units in the same period for 2022. Median rural prices also saw a drop, from $595,000 to $575,500 for the same time frame.
Rural properties usually make up 10% of all sales, but those numbers increased during 2020 and 2021 likely due to the pandemic, said Mullane. People may have moved up planned purchases of rural properties due to COVID, which might account for the current decline, he said.
Out-of-area buyers are still “a large part of the market,” said Mullane, with California producing the most. “There’s just people from all over the county. It’s a highly desirable part of the country.”
Retirees may be attracted to the area due to the lack of sales tax, good airline service out of Medford, good medical facilities and lot of attractions and activities, said Mullane.
Using statistics generated by the opening of lock boxes on for-sale homes, association officials calculated that, on average, a home saw about 16 showings before a sale was made.
Reach Ashland freelance writer Tony Boom at tboomwriter@gmail.com.
© 2022 Mail Tribune

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