Residential real estate industry leaders got all they were hoping for and more in 2012.
Not only did the market shake off its lengthy decline in property values, but the marginal improvement shown in 2011 solidified as sellers gained the upper hand for the first time since 2005.
Jackson County's median sales price for all of 2012 was $165,000, 11.9 percent higher than the $147,500 median in 2011. Substantial gains were reported in eight of the 11 urban areas tracked by Southern Oregon Multiple Listing Service.
"This time last year we were hoping the median value for home prices in Jackson County would stabilize," said SOMLS spokesman Colin Mullane during a Wednesday media briefing. "With foreclosure and short sales, inventory would be reduced and conventional sales would see somewhat of a resurgence."
What the industry got was a year in which transactions were up nearly 19 percent, with the average time on the market nearly a month less than in 2011.
The 2,195 existing home sales last year were the most since 2005 when 2,509 single-family residences exchanged hands and corresponded with the 2,190 units sold in 2003 — a year, Mullane said, that was considered normal.
"This number is a great one for us," said Mullane, pointing to the 2,195 on his screen.
One component applying upward price pressure is the inventory of available houses, which has dwindled from 1,310 units a year ago to 780 at the start of this year. In that period, the inventory based on rate of sales has declined from 7.2 months of housing stock to 3.5 months.
"That is well below the norm, even in a healthy market," Mullane said. "That's in line with what we're hearing from the Portland metro market and other large cities such as San Francisco. The heat in the market is coming from the lack of supply."
There also was a steady decline in distressed sales throughout the year. There were about 200 short sales on the market last January, but that had dropped to fewer than 75 in December. There were more than 150 foreclosed properties listed at the start of 2012, but only about 50 by last month.
Part of the drop in distressed sales, he said, was due to a state law kicking in during the summer requiring major lenders to mediate with homeowners who were in default.
At the start of 2012, 39 percent of sales were normal sales. That number grew to 52.4 for the entire year.
Foreclosures were also slowed by a court decision that forced most foreclosures to go through the judicial system, rather than through a more expedited system set up by lenders.
Inventory will likely increase in the next few months as the judicial foreclosures begin entering the market, joined by sellers who bided their time during the long slide.
"If we see an incline (in foreclosure listings) during the next year, it doesn't mean we're entering into another housing problem, it just means the (foreclosure) process will be picking back up," Mullane said. "I don't think it will be an issue that will affect prices or slow down the market."
He said he expected mortgage rates to climb slowly in the coming months, because the Federal Reserve has indicated it won't be buying mortgage-backed securities.
Reach reporter Greg Stiles at 541-776-4463 or e-mail email@example.com.