Let’s start with a little fall color. This is my favorite fall tree – the liquidambar. I used to have a big one in my front yard, and even when I was ankle deep in leaves to be raked I would say “I forgive you” because it was so beautiful.
A topic of some discussion in our Rogue Valley real estate community is whether or not buyers are beginning to push back harder on rising home prices. Prices have been rising steadily in Jackson County for over 5 years at a compound rate of about 9% per year. That rise mirrors the pattern that you hear so much about in all the big west coast cities. Most have been a little faster, about 10%-11%/yr, except Seattle, which has been more like 12%/yr – that’s 1% a month price increase! These are not the sky-rocket increases we saw in the 2004-2006, but they still add up. Median home prices in the San Francisco/San Jose area are now over $1million. Our own Medford median price is up 68% in 5 years, from $151,000 TO $254,000, and Ashland is up a similar percentage, from a higher base, as you can see in these charts.
Now back to the topic of price pushback. Medford area housing affordability has fallen quite a bit in the past couple of years. We were at an affordability index of about 50, meaning a family with median income could afford about 50% of the houses on the market. Now we are down to an index of 40 – only 40% of the houses on the market are affordable to a family with median income. The charts show we’re still way better off on affordability than the San Francisco folks, but we’ve both lost ground. Maybe it’s time to move to Kokomo!
The preponderance of working families in the Medford area might explain the pushback or flattening effect on prices there that we see in the past few months. And perhaps the higher proportion of retired folks buying in Ashland might explain why we don’t see the same flattening there.
It’s early days for these observations. We’ll see how they play out in the next few months!
Chuck Reiling – Licensed Principal Broker, John L. Scott Real Estate
541-301-5449 | email@example.com