Rockwell Real Estate, KDRV Channel12 & The Salvation Army have teamed up to help a local family in need. With rental rates on the rise and inventory at an extreme low we are finding that many people
Latest Real Estate Stats
Real estate in Southern Oregon has been on quite a run. New statistics provided by MLS show us moving forward in a seller's market with full steam ahead. Buyer demand remains high and inventory struggles to keep up despite more homes being introduced into the market. It's no wonder prices have gone up. How long will it last and what does it mean for those considering a purchase or a sale? Here is my short take on real estate stats through July 2017.
Mostly everything here looks great, in fact real estate has been brag worthy. But, I do have one area of concern and that is the drop of the Housing Affordability Index (HAI). In my opinion this is something to watch with a careful eye.
"The Housing Affordability Index (HAI) measures the ability of a family with median income to afford monthly mortgage payments on a median priced home. The HAI is calculated using the most recent census data for the area and average interest rates reported by Freddie Mac. Index values under 100 indicate less affordability, while values over 100 show increased affordability."
In July of 2016 the HAI was a reported as 114.2 and by July of 2017 the HAI fell to 97.2: a decline of 14.9% in that one year of change. I find it interesting to note that in 2007, before the market crashed, the HAI was at 81.2 according to MLS data. My math tells me if prices continue to rise at the same clip we aren't but more than a year and change away from numbers that were unsustainable before.
Mortgage interest rates play a tremendous role of housing's affordability, too. Mortgage rates have been flat for a long time and hovering at all-time lows against the rise in real estate values. An increases in mortgage interest rates applies downward pressure on the HAI and could conceivably be the catalyst for change in the market.
The real estate market is like a large ship cruising through the ocean: It won't stop on a dime. However, tomorrow when you drive by a local bank that is advertising mortgage interest rates at 4% in their window realize when that rate goes up to 5% it will represent a 20% increase. Perhaps more important than percentages of mortgage rate increases is how significantly a increase in mortgage interest rate will impact the affordability of housing demonstrated through the HAI. When rates go up homes become less affordable and all of the sudden the soup is way too salty.
Seller's markets are great for sellers because homes sell fast and they sell for top dollar. That, in a nutshell, is it. If you are considering selling real estate you own, right now is the perfect time! The market is in your favor and you might want to take advantage of it.
I think it is important to recognize that the market we have been in now for several years has created great opportunities for buyers too. Back to mortgage interest rates -- they are close to as low as they have ever been! Plus, the market has momentum, which means fast equity and cheap money available for new home buyers, and to top it all off real estate (even at today's prices) is still affordable and in my opinion will always remain as a solid investment.
To view all of the stats provided by our local MLS and Rogue Valley Association of Realtors click here.
Rocky is a lifelong resident of Southern Oregon and has been a licensed real estate broker with John L. Scott Medford since 2001. In that time he has won numerous awards for top sales production and ....