Southern Oregon Housing Market Update 3/19/2021

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Alice's Analysis_ Southern Oregon Housing Market Update 3.19.21

Well, good morning, real estate fans, Alice Lema, here, Broker, John L. Scott, Southern Oregon here with another, update on what's happening in our local housing market. And, you know, as we open up more from the COVID and we even have some kiddos going back to school, the housing market is making some interesting changes.

[00:00:20] You know, last year during the shutdown, we had a surprisingly high, spike, in our prices as people relocated, not only from other places to our area, but also our local community kind of branched out, got bigger houses. Cause they were making a commitment to working from home. They were making a commitment to schooling from home.

[00:00:40] They wanted a little more elbow room. They wanted, you know, I always make the joke that chickens and rabbits they're on water. So we still have that trend happening. But the, the frenzy seems to have subsided Here we are the middle of March, getting ready for tax season. The IRS has postponed, taxes for a month.

[00:01:00] So now that's not due until April. I'm sorry, not April, but yeah, due until May.  And all these things are kind of working into, some kind of flattening of our market. Now we still have, kind of high prices, but all of a sudden we have a lot more inventory and this is what I want to talk about because there's a lot of rumors going around that, the price is going to keep going up, that we're going to have more spikes. And, you know, just mathematically, unless we have another event of some kind to foster that upward motion, we really don't have that kind of a foundation.

[00:01:37] So I just want to talk to you a little bit today about what to expect in the coming months. So if you are a, If you live in town and you have four bedrooms or you have three bedrooms and an office, if you have a pool, if you have a bigger yard single story, then your prices are going to be probably above 400, maybe into the low five hundreds.

[00:02:00] And, and I don't know how much further, it will go up, but I don't know that it's really going to go down much. That's kind of where the masses, so to speak, want. That's kind of the property, most people want. Additionally, that kind of a home, but out in the country, but with small acreage, I mean, we do have some sales in our luxury market.

[00:02:21] Over a million dollars over 2 million, you know, the really big spreads are really big properties. They're really big houses, but most of us are going for either something, a little larger square footage in town or small acreage. And we'll define small acreages, almost half an acre up to three acres.

[00:02:38] And, you know, what's interesting is that was kind of the target property for a lot of our active, retired, community, which is what Southern Oregon was really known for, the last couple of decades. Anyway, we were one of the hotspots for relocating, active retirees. Now we have relocating tech workers.

[00:02:59] We have relocating work from home people, remote, remote people. And so they're liking that. That category of small acreage, little larger house, everybody wants a little more elbow room. And out in the country, at least here in Southern Oregon, those properties have now spiked, usually starting in the five hundreds and then going up to the eight or nine hundreds, which for us here locally, that that's a lot of money.

[00:03:27] I know if you're from a big city, that doesn't sound like a lot, but to us here, that is. So the only saving grace is the low interest rates. So, some of those have come up a little bit. I noticed some of our, our newer buyers are getting locked in more at 3.2% to 3.7%, which still, you know, is low for us older folks who maybe started our real estate buying and selling careers at 11% or 16% back in the eighties. We still think of 3.2% to four% is basically free money. So, but that, that 3.2 to 4%, if you will, is still kind of a big bump up from what we were closing deals at. Even a month or two ago, we had people closing in the low twos, to a high twos.

[00:04:19] So that does have an impact on your payment. And here in Oregon, you know, the property taxes are high because we don't have sales tax. So I just want to prepare you the next, few months we should see a stabilizing market price wise. The interest rates are very slowly creeping up. The federal reserve bank makes a point of updating, you know, everybody on a regular basis, but quite frankly, they change their mind on a whim if they want.

[00:04:49] And that's the thing I worry about. So people say, well, I want to see if the rates are going to down. I want to say the prices are going to go down. And it's like, you know, as an older person myself, I'm thinking. If you have a goal of owning a house of owning an investment property, owning a second home, something like that, it's really about the payment and finding the property that works for you.

[00:05:09] So if you have that scenario where you find what you want, it's in your budget and you're good with the payment, I'm thinking, just go with it. Because if the economy, is going to do really well more. If the economy is going to do better than as expected, then the federal reserve bank can just, you know, raise the interest rates if they think they want to.

[00:05:29] So, and I am not, Nostradamus. I don't know. I make my predictions based on what I see in all three counties. Also watching the financial markets of the world. I get up early. It's, that's what I do. It's, I'm just a geek that way. Um, but also watching the different, what I call mini markets here in Southern Oregon.

[00:05:49] We've got everything. From seniors downsizing to, mobile home parks,  the ones that are left anyway, cause you know, we lost a lot of them in the fire, to construction new construction to buildersAnd then just, folks wanting, their first home or they want a bigger home. So, so we watch all these different little, neighborhoods and markets in Southern Oregon.

[00:06:13] Cause they're all unique, they're all different. They all have their pluses and minuses. They all have their own price points. And they all have their, their own days on market. If you see online that Dom, that means days on market and you know what the normal neutral market days on market is 180 days, 120 to 180 that's four, five, six months.

[00:06:36] That's what a normal, Selling market is supposed to be not 180 seconds. But we are seeing some buyer behavior change. And this is so important if you're a seller because the frenzy is over. We're not getting as many multiple offers. They're not as high. They're not as, they're not as aggressive, as they were even 30 days ago. So whatever you're seeing online or whatever you're hearing about the local market, I just want you to take it with a grain of salt because we are getting more inventory. The buyers are not as panicky or as, they're not as motivated to move quickly, into these situations.

[00:07:21] Since we have quite a few bailing out, we call that back on market. If you see online BOM, not all the websites track that, but it's something I track very closely because when something falls out of escrow, that's huge. And, and in a sellers market, quote unquote, you don't have much back on market. But if you start getting more back on market, then you better pay attention because that means something is changing in the hearts and minds of the buyer or the economy.

[00:07:48] It can be a leading indicator if you will, to a changing trend. So one of the things I wanted to mention. Today is that in Jackson County this week we had 130 new listings come on the market. We had 38 back on market. So that is, you know, you add those together. That's your total inventory. You cannot track just the new properties that are coming along well, you can, but I don't think it reflects the accurate market conditions. So if you get 130 properties on the market in Jackson County and you get 38 back on market, I think that's. still not enough, don't get me wrong, but at the same time, that's still more than what I think the sellers are realizing.

[00:08:38] And then additionally, in, Jackson County, you know, at 130 new properties come on the market. 38 back on market. We had 120 pending. So we're still, you know, the buyers are still hungry. They're still scooping up. I still think a lot of it has to do with the, um, the low interest rates. And quite frankly, I think that should be a motivating factor because, whether you're buying a property to live in or you're doing investing, I think that, you know, nailing down that 30 year fixed mortgage can just be golden. It really, really can.

So I'm still, recommending to most people that, they buy now, because I just don't know that we're going to get this kind of low interest rate again. Having said that, that's what we said during the crash. You remember, during the meltdown of 0 seven two.

[00:09:36] 11 or 12, you know, it was different for every little municipality, but you know, the housing crash, we didn't think we'd see low interest rates again. And here we are. So again, we'll just have to see what the future brings, but if you're selling be very careful about your pricing. And remember if you go on the market and in two or three weeks, you don't have any offers and your feedback is not positive, then you need to make some adjustments. Either you need to do something to the property, so that it's more, uh, gee, to the buyer's liking, or you need to change your price, or you need to change your marketing. There's really only those three things to manipulate in a in a housing sell if you're buying. Um, I bet you're feeling a little more, more empowered for the first time in many months, because there are more properties on the market.

[00:10:25] And I noticed seeing even the locals are not, as, quick to make a deal or quick to take a property that does not really suit them. And so, again, that's another behavior change. When something is coming out of a sellers market going into a neutral market, and then we have our higher end properties.

[00:10:45] The over 800 to us over eight hundred thousand is a luxury. And they're just not only not selling, they're sitting for a long time and there's more and more of them. So here we are in the middle of March. I'm predicting that again, through the rest of the summer, maybe into early fall, we're going to see a more normalizing situation.

[00:11:08] But quite frankly, that would be such a relief because we have had so much upheaval in the last year. It would just be nice to have some steadiness and have some predictability in at least that part of our life. And then even though the schools are opening, I still see a lot of our parents wanting to continue to do online schooling at home either full-time and some of the schools, you know, they're still doing a hybrid, so you still have to do do that anyway.

[00:11:39] So we still have a high demand for more than three bedrooms or three bedrooms and an office. And we still have a high demand for swimming pools and bigger yards. So if you have a property like that, let me know. Cause we have like a long list in every zip code. And then before we sign off, I do want to mention, Josephine County and Klamath because Jackson County had 130 new listings ,Josephine had 56 and then Josephine County had six back on market, which is not very much. And then Josephine County had 46. So Josephine County, 56 new properties on the market, only six back on market and, 46 pendings. So again, kind of a similar ratio with the, new property to pending, which means a buyer went into contract.

[00:12:29] They, they came to an agreement with the seller and it's not on the market anymore. And that's what pending means. So, but that's a similar ratio, to Jackson County, even though the numbers are bigger in Jackson County, the only thing is in Jackson County, the back on market, is proportionately higher.

[00:12:43] So that's kind of interesting. And then Klamath County has 53 new properties come on the market, 16 back on market and 51 pending. So Klamath County proportionally has quite a much higher, back on market rate than Josephine or, or Jackson County. But I do know that a lot of, a lot of folks are relocating up to Klamath County.

[00:13:09] Cause you get so much bang for your buck. You can get like a big, beautiful farm for under $500,000 with a, a pretty good house irrigation rights and you know, the whole kitten caboodle. So, and it's interesting as the prices are starting to go up quite a bit in Josephine County, it's still less than Jackson County.

[00:13:29] But You know, again, as people have more choices of where they live now, because it's not all about location anymore. And I think that is a permanent game changer. We'll see if I'm right. So this is Alice Lema Broker John L. Scott here in Southern Oregon. I just want to say, have a beautiful Southern Oregon weekend I'm around and I'm here to help.

[00:13:48] So call me, text me 541-301-7980 , . And some of you are getting notes from me, asking if you're open to considering a conversation, to sell your property, or if any of your neighbors are. And that's because I have buyers, I have buyers that want your kind of property.

[00:14:06] So if you get a letter from me, it's from me, it has my card in it. Please call me and text me. And let me know if you or any of your neighbors are thinking of selling. Having said that, again, have a beautiful weekend and we'll chat again next week. Bye now.