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Home run Interest rates may open door to home buyers By DAMIAN MANN Despite a downturn in the economy, Jackson County real estate experts predict that low-interest rates could spark a robust home-buying season. "This is going to be a banner year," said Larry Frank, president of the Rogue Valley Association of Realtors. With inventory rising sharply, the peak home-buying season begins this month and continues through October. For the past decade, house prices have increased an average 6 percent a year, and Frank expects this year could be even higher. Home prices increased 14 percent over last year in Jackson County, with the average now at $162,717. "We will have a very strong summer," said Frank. He cites interest rates of 6.75 to 7 percent that will continue to fuel interest in home buying. Both Ashland and Jacksonville will remain the price leaders as buyers continue to pay a premium to live in those popular markets. But Frank says every area in the county offers good returns. "If you look at the city of Central Point, if you look at southwest Medford or the new homes coming up in east Medford � all will have a great appreciation." The only potential dark cloud could be a long downturn in the economy. Frank said, "If the interest rates start to go up, we could have a slowdown." Roy Wright, owner of Roy Wright Appraisal Service Inc., also predicts the market will do well this year, possibly better than last year. "For the first part of last year, sales were down," Wright said. "Toward the end of 2000, things began turning up. This made me believe the following year (2001) is going to be a very robust year." And so far, the first three months of 2001 have continued this upswing. Ashland will offer one of the best investment returns, Wright said. "It appeals to people who like the arts or theater. They tend to be a more liberal bunch." It also has the most unusual home-buying habits. About 65 percent of the houses bought are rented out, whereas in the rest of the county, 65 percent are owner-occupied. "Tourists buy houses even though they didn�t intend to buy houses," he said. "Then they rent them out. A lot of that goes on in Ashland." Ashland is also one of the hottest markets. Wright said a small house of about 800 square feet sold for $200,000 last year. Because it was on fashionable Granite Street, the owner turned around and sold it for $325,000 this year. Jacksonville, described as a more conservative community by Wright, also commands high prices for homes. "One sold for $825,000 after being on the market just two weeks," he said. But neither Jacksonville nor Ashland is representative of Jackson County as a whole. Of the 2,222 homes sold in the county last year, only 15 percent were from Ashland and just 68 sales were recorded in Jacksonville. Medford single-handedly produced 65 percent of the sales. Central Point had 15 percent, leaving just 5 percent for the remainder of the county, Wright said. Bill Allen, of Re/Max Ideal Properties, believes that it is going to be a good year that could get even better depending on whether the government reduces interest rates more. "If they drop a half percentage or three-quarters, this could be a great year," he said. Most areas of the county offer the potential for good returns on investments. "The home and the area you pick are the two most important things to look for," said Allen. For instance, dumping $50,000 into an older home in a neighborhood of older homes might not be as wise as choosing a newer home in a newer neighborhood. Konny Knecht, of Lithia Realty in Ashland, said, "Things have really started hopping. Our phones are just crazy over the weekend." She said the housing market in Ashland has remained strong over the winter months. "Although we had a pretty full year (in 2000), one of our busiest months was in December." In California, Knecht said, the housing market has recently gone from excellent to good, but she still rates Ashland as "excellent." Knecht said homes priced between $300,000 and $400,000 stay on the market the longest. Houses valued at $200,000 to $275,000 typically move well, but Knecht said that anything at $175,000 or less will immediately receive three offers, some over the asking price. She estimates that 80 percent of the buyers are from out of town, either from California, the East Coast or other parts of Oregon. The unseen cost: stress Selling or buying a house is one of the most stressful situations a person can face. To reduce some of the stress, real estate agents recommend both sellers and buyers spend a lot of time picking the right agent and familiarizing themselves with the market. "It is important for people to realize that all Realtors are not the same," says Konny Knecht, of Lithia Realty in Ashland. "I don�t have to be a used-car salesman in my line of work. I like people to feel comfortable." Sellers should prepare themselves for two things, agents say: costs in getting the house ready and frequent visitors. Larry Frank, president of the Rogue Valley Association of Realtors, says most homeowners can expect to pay up to $500 just to fix woodwork damaged by, say, a leaking toilet or sink before they put their house on the market. Other repairs may have to be made, especially on older homes or homes that haven�t been maintained. When it comes to visitors, says Bill Allen of ReMax Ideal Properties, "The home owner needs to get ready to be invaded on a regular basis." Homes sometimes must be shown on a moment�s notice, meaning the beds have to be made, the kitchen cleaned and the yard well-maintained every day. "It has to be very neat and tidy," Allen says. Owners should pay particular attention to the first impression prospective buyers will get when they pull up in the driveway. "Curbside appearance is very important," he says. Buyers should do their homework, especially on financial matters, agents say. "If people have a lot of cash, they should determine how much of that cash should be invested in the home, or in other places," Allen says. "The most important thing for a buyer is to find a house that he can afford." Then be prepared to have the house thoroughly inspected beforehand to avoid unnecessary and sometimes costly repairs later on, he says. Reach reporter Damian Mann at 776-4476, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.