Last summer, husband-and-wife team Dan and Laurie Jovick and their construction crew were hard at work building three homes in Ashland packed with environmentally friendly features.

This year, the couple has stopped one house at the framing stage as they wait for one of the finished homes to sell in the slow real estate market. They have suspended plans they made to start building a fourth house this summer.

Their business, Jovick Construction, specializes in houses built to Earth Advantage and Energy Star certification standards.

"People who have come by are specifically looking for a green-built home. Some parties have shown a lot of interest. But most people need to sell houses they own before they can buy a new house. A couple people have real estate in California," Laurie Jovick said. "So that's definitely affecting us."

The Jovicks' newly built homes are on the market as house sales in Ashland and Jackson County continue to drop from the real estate peak in 2004.

That year, 4,145 new and existing homes sold in the county at a median price of $224,000. In Ashland, 533 homes sold at a median price of $345,000, according to figures from Colin Mullane, spokesman for the Southern Oregon Multiple Listing Service Statistics Committee and a broker with Re/Max Realty Group in Ashland.

In 2005, 3,982 houses sold in the county at a median price of $275,000, while 506 homes sold in Ashland at a median price of $425,000.

Homes sales dropped significantly in 2006, to 2,727 in the county at a median price of $294,000 and 376 in Ashland at a median price of $440,000.

The slump worsened in 2007 when 2,289 homes at a median price of $275,000 sold in the county and 345 homes at a median price of $425,000 sold in Ashland.

Realtors, buyers and sellers are waiting to see how this summer plays out, but numbers from spring are not encouraging.

From January to the end of May in 2007, 1,020 homes had sold in the county and 142 homes had sold in Ashland.

But from January through May this year, sales had dropped to 686 in the county and just 77 in Ashland.

"This is significantly slower. It's slower across the board," Mullane said. "I think we're going to see this level of sales activity remain fairly constant. It has to reach the bottom and then stay there for a while."

He said he expects sales to remain down at least through the end of the year because consumer confidence is low, loans are not as readily available and 2008 is an election year, which exacerbates stock market and economic jitters.

However, Mullane said a real estate recovery in 2009 or 2010 could be threatened if gas prices remain high and continue to feed inflation and slow the economy.

The mortgage meltdown

Roy Wright of Roy Wright Appraisal Service in Medford said too much blame has been placed on borrowers for taking out loans they couldn't afford and lenders for making questionable loans.

Borrowers took out loans they could afford when interest rates were at 4 percent, but as Congress and the administration ballooned the national debt with deficit spending, the government, home buyers and people who wanted to start new businesses began competing for the same pool of money. That drove mortgage interest rates up to 6 percent and higher. Homeowners with adjustable 4 percent loans became unable to afford their house payments as their interest rates jumped, Wright said.

He said former Federal Reserve Chairman Alan Greenspan repeatedly testified before Congress that the growing national debt would make borrowing more expensive and slow the economy.

"Blaming borrowers is the same as going to a rape victim and blaming her," Wright said. "They borrowed money they could afford to pay back until the government ran up interest rates."

Whether borrowers, lenders or the government are to blame, most lenders have pulled back from making non-traditional loans that allowed people with imperfect credit or no down payment to buy homes.

C.R. Taylor, loan originator for Ashland Mortgage, said 99 percent of lenders &

whether they were banks or mortgage brokers &

made non-conventional loans. He even made a handful over the past five years, although he said Ashland Mortgage hasn't originated many of the so-called subprime loans.

Taylor said a potential home buyer today who can afford monthly payments on a house but lacks a large down payment can't meet the initial qualifications to get a mortgage.

"Twelve to 24 months ago, that person could buy a house," Taylor said. "Today they cannot. People with good credit and good jobs but no down payment can't buy a house."

"Jumbo mortgages" for homes that cost more than $417,000 to $422,500 are far more difficult to obtain now and the interest rates are usually more than 6 percent, Taylor said.

That has a disproportionate impact on Ashland, which has a high median sales price compared to most of the county and Oregon.

It could be affecting the Jovicks, who have their 2,600 to 3,300 square foot green-built homes priced from $724,000 to $750,000.

Many lenders have even stopped doing second mortgages unless a person owns at least 70 to 80 percent of his or her home. A few years ago, people could get second mortgages for up to 100 percent of the value of their houses, Taylor said.

For people who are having trouble making their house payments, Taylor said they should contact their lenders immediately and ask for "hardship modifications." They should check the income written on their home loan application, which may have been inflated, and have it changed to their true income.

Homeowners in trouble should send a letter to their lenders describing their financial situation and include pay stubs and a list of bills. Taylor said getting home loan terms changed takes hours of work and persistence, in part because many lenders sold their home loans to investors who expect a certain rate of return.

"If you've ever tried to call your cable company and entered a phone queue, magnify that by 10," he said. "They are backlogged beyond belief. It's very difficult for the average consumer because it's a maze of pressing numbers, leaving messages and they don't call you back. The fence is so high, a lot of them give up. You have to be tenacious and bulldog your way through."

Although consumer credit counseling agencies can help, Taylor warned that getting flagged as a client can damage a borrower's credit score. Getting help from a friend or relative who is comfortable dealing with financial issues might be a better bet.

Future uncertain

Bruce Roberts, principle broker and owner of Gateway Real Estate in Ashland, said Realtors began seeing more activity here and in California this spring, although sales were down from this time last year.

He said qualified buyers can get financing.

"Personally, I think now is the best time in the last 20 years to buy a house in Ashland," Roberts said. "Prices are competitive and sellers are willing to negotiate. It's a great opportunity for buyers to buy right now. There's lots of product available."

As for sellers, houses are staying on the market longer and sellers may need to adjust their expectations about the amount of money they can get from selling their homes, Roberts said.

Sales are more vibrant for houses in the lower to middle price range, although there have been sales of more expensive homes &

including some around the $1 million level, he said.

"A seller needs to really focus on pricing it competitively if you want to sell," Roberts said. "You can't live in the past. You have to live in the present."

He said Ashland is not immune from the real estate market troubles that have gripped the rest of the country, but it remains a highly desirable place to buy a house and live.

"We're looking with anticipation to this summer," he said.

As for the Jovicks, the young couple with the upstart green construction business has dropped the price on the most expensive of the homes they have for sale by $25,000. They hope to be able to ride out the real estate slump and put their construction crew back to work on the unfinished home.

"We're definitely in it for the long run. We just have to get through this period," Laurie Jovick said.

Reach staff writer at 479-8199 or vlaldous@yahoo.com. To post a comment, visit .