The new year makes a convenient time to look back and also pull out our crystal ball. 2012 may have marked the bottom of our real estate market in Eugene & Springfield. Prices have trended up in the last few months. Mostly, this is brought about by lack of supply, that is too few houses actively for sale.
In real estate’s boom years, before 2008, supplies of houses for sale dipped below two months, which was a strong seller’s market. At the depths of the Great Recession, supplies greater than a year were seen around Eugene Springfield, indicating a strong buyer’s market. Lately, we’ve been at 6 months or less, which is a mild sellers market.
Why the lack of supply of houses for sale? One reason is Senate Bill 1552. This good intentioned Bill had the effect of decreasing the rate of completed foreclosures, so fewer of them are on the market and more are still in the process of foreclosure. The Oregon Supreme Court is scheduled to take a look at this in January 2013. My guess is that they or the Legislature will change something.
Fundamentally, the prices of real estate are affected by things like inward migration and unemployment rate. We’ve had fewer immigrants to Oregon in the last few years, and unemployment rates are stubbornly high, although decreasing.
My prediction for house prices in 2013 for Eugene Springfield is flat to mildly increasing. I’ve been wrong before, though, and we’ll have to wait and see.