Eugene Oregon Ranks #2 For Lowest Housing Inventory In The Nation
Good Morning!
Is it a perfect storm situation now taking its grip on the Eugene and Springfield housing market? The overall market here is now as quiet as I have ever witnessed in my 27 years as an area Realtor. Why would our market change from a blazing hot market to becoming this slow in just a few weeks?
The answer is complicated, but it is primarily being fueled by the Eugene and Springfield area having the second lowest inventory of homes on the market in the entire United States. Our home inventory rest at less that 1.7 months of active home inventory. This means that if no new homes hit the market, the current inventory would be exhausted within 1.7 months. This creates a tough market for potential home buyers. In our area, the hottest part of the market is median priced homes, which are typically the first time buyer homes. There really is no inventory at this price level currently. The majority of the active inventory is in the upper price ranges, where demand has slowed considerably. On top of this, we have had around an 8% rise in home values in our area over the past 12 months and a rise in mortgage loan interest rates. The combination of these two factors has made housing less affordable and pushed, even more, would be buyers into the median home price range, where there is no inventory. Another factor that is fueling our problem is that in the Eugene and Springfield area, there are very few building lots. The city and county's failure to expand urban growth boundaries has created a critical shortage of home building sites and virtually put a lid on new homes being built in the price ranges where there is demand. The building lot shortage along with increased costs in permits, SDC's, etc. has pushed lot prices to all-time highs making it impossible to build new affordable housing in our area.
Where our local market goes in 2017 remains up in the air. The one thing that I will caution everyone about is that if you are expecting a repeat year like 2016, it is just not going to happen. As long as home inventories in the median price ranges remain low, prices on these homes remain high and mortgage rates continue to climb, the market here will remain very quiet.
Have An Awesome Week!
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