Relentless demand funneling into a narrow assortment of available homes continued to push Jackson County housing prices higher this summer.
The question is how far the median will rise before it hits resistance.
Southern Oregon Multiple Listing Service reported that the median price for sales of existing single-family residences between June 1 and Aug. 31 spiked 10.9 percent, to $275,000 from $248,000, a year ago.
"There is going to be a slight slowdown," said John L. Scott Real Estate agent Terry Rasmussen. "Year-over-year appreciation of nearly 11 percent is pretty good growth, it's unsustainable and would lead to an unhealthy market."
The pace of summer sales picked up 7.9 percent, with 782 houses sold compared with 725 a year ago. Homes were snapped up after an average of 34 days on the market compared with 42 during 2016.
Rasmussen and others see the rate of appreciation backing off in coming months. Supply and demand, however, are supporting present levels. The inventory of houses on the market dropped 1.1 percent to 1,043 at the end of August. New listings also declined by 3.3 percent, to 353 last month from 367 in August of 2016. Meanwhile, pending sales last month rose 6.6 percent year-over-year to 341 from 320 a year earlier.
"You have fewer houses on the market and there is still strong demand," Rasmussen said. "There are still people needing houses, and new construction isn't keeping up with demand. Having fewer listings definitely puts a squeeze on the market."
Every urban region saw year-over-year median gains. Ashland's 19.8 percent median bump to $442,500 was underscored by the August median of $449,500. Jacksonville's median soared 23.9 percent to $429,500, again bolstered by August, where half the deals struck were for more than $525,000. Gold Hill and Rogue River also saw a big jump, with the $236,000 median surpassing last year's level of $177,000 by 33.3 percent.
While prices are rocketing higher in the Pacific Northwest's major metropolitan areas, Windermere economist Matthew Gardner said there is a difference between Seattle and Portland and Jackson County.
Seattle's wage income growth is between 3½ and 4 percent. The country as a whole is seeing 2 to 2½ percent wage growth.
"Jackson County's increase is clearly unsustainable for a simple reason, incomes are not rising to compensate for the higher housing prices," Gardner said. "When you find home prices escalating at this kind of rate, the demand is forcing prices up."
The consequence is that buyers begin getting creative in their quest to make a deal.
"People start figuring out how they can make it work, using interesting financing vehicles," he said. "You see a lot more co-borrowers such as parents signing on to a mortgage purely because their children are having a hard time qualifying for a home."
The median price for a rural home in the county was $362,500, up 6 percent from last year. A total of 154 rural homes sold during the period, averaging 61 days on market.
— Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.