The tax breaks might be gone, but mortgage rates remain attractive to home buyers.

The tax breaks might be gone. Nonetheless, mortgage rates remain attractive to home buyers.

The latest figures compiled by Southern Oregon Multiple Listing Service showed Jackson County residential real estate sales continued on an upswing.

During the three-month period that ended Monday, 503 homes sold, up 19.2 percent over the corresponding period in 2009, when 422 houses changed hands. Federal tax credits for buyers that expired at the end of April played a role in the surge.

"I'm optimistically cautious," said Keller Williams Real Estate agent Ron Galbreath. "When I looked (Thursday) morning, the interest rate for a 30-year mortgage was 4.625 percent."

The median sales price for the period was $162,000, down 14.7 percent from $190,000 during the same period in 2009. May's median sales price for homes excluding new construction was $157,500, down from $194,500 in 2009.

Galbreath said there was a drop-off in early May as agents prepared paperwork to get the deals they made in April closed by June 30 in order to get the tax credits.

But there is good reason to think buyers will appear this summer.

During the real estate boom, the Rogue Valley often showed up on lists highlighting lifestyle changes or retirement destinations.

Earlier this year, Medford made U.S. News & World Report's "10 Cities for Real Estate Steals" list. Medford followed Memphis and Salinas, Calif., and was just ahead of the Washington, D.C., metropolitan area.

"The national housing bust has hit the outdoor wonderland of Medford, Ore., with a one-two punch," the weekly magazine wrote. "Because its timber industry is crucial to the local economy — wood-processing jobs represent at least a quarter of all manufacturing positions — the collapse of the new-home building market triggered higher unemployment in the area. Meanwhile, after moving significantly higher during the first half of the previous decade, home prices have dropped more than 23 percent in recent years. As a result, Medford's already affordable housing market has become even more so. Its price-to-income ratio stood at just 1.01 through the third quarter of 2009, well below its average of 1.46 for the 15 years ending in 2003. Moody's Economy.com expects home prices to hit bottom this year."

Galbreath said recent buyers should plan on holding on to their houses until the market begins pushing uphill.

"We're telling buyers to hold for three to five years in order to recoup closing costs and actually see good equity," Galbreath said. "We're near the bottom and we'll only know when we come out of it."

Reach reporter Greg Stiles at 541-776-4463 or e-mail business@mailtribune.com.