After a bounce-back year in 2009, the Jackson County real estate home market may be hard-pressed to repeat that showing in 2010.

After a bounce-back year in 2009, the Jackson County real estate home market may be hard-pressed to repeat that showing in 2010.

"At some point, we will stop seeing double-digit growth," said Steve Blanton, chief executive for the Rogue Valley Association of Realtors, during a Thursday morning news conference.

Low interest rates, a federal tax credit for first-time home buyers and declining prices contributed to a 35.4 percent gain in activity last year. But two of the components driving the market — very low interest rates and tax credits — will likely be gone by the time summer home-buying season comes around.

The Federal Reserve reaffirmed this week it plans to end its $1.25 trillion mortgage-buying program by the end of March.

Without other investors willing to buy those securities from Fannie Mae, Freddie Mac and the Federal Home Loan Bank, rates will rise as lenders search for cash to fund mortgages.

Rates that have hovered around 5 percent for a 30-year loan could easily rise to 6 percent or more, industry observers say.

Does all that portend a rocky time for Southern Oregon's residential market later this spring?

"If the buyers disappear, we will see a growing supply again," said Colin Mullane, president-elect of the Rogue Valley Association of Realtors.

That could jeopardize the momentum of 11 straight months of double-digit gains in local residential sales activity.

"Our hope is that buyers will say, 'Prices are low; hey it's only eight grand,' " Mullane said of the loss of the $8,000 federal tax credit. "If prices continue to fall, most likely that will make up the difference."

The median price for the 1,809 existing Jackson County homes sold in 2009 was $186,000, down 17.3 percent from the 2008 median of $225,000.

Mullane said the continued pricing trend alone should be enough to entice buyers.

"Buyers are still able to get a great value compared to three, four or five years ago," he said.

While existing home sales fell 16.7 percent nationally in December, he said the Rogue Valley saw a more muted 7.8 percent decline.

Further, while distress sales — foreclosures and short-sales — accounted for 45.9 percent Jackson County transactions throughout 2009, declining in the second half, it was far less than in some regions, where banks held off selling dozens of foreclosures to avoid flooding the market. West Medford and White City sported the biggest activity gains over 2008, primarily because of lower-priced homes and the large number of properties in default.

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.