Housing, Real Estate, Building Permit and Construction Trends in the Rogue Valley
November 4, 2024As one of life’s most basic necessities, shelter plays a critical role in the lives of residents of any community. Increasingly, challenges surrounding homelessness, housing availability, and escalating prices are becoming a common refrain in many communities. Whether you are looking at housing for those without a residence at all, to families or individuals who are paying a considerable portion of their income for shelter or can’t make the leap from renting to home ownership, it is a challenge that many are facing.
According to data from the Census Bureau’s 2023 American Community Survey, 44% of Oregonians are considered “rent burdened”, meaning they pay 35% or more of their household income on gross rent. In Jackson County, 46% were estimated as rent burdened. For those with a mortgage, 23% pay 35% or more of their household income on “selected monthly owner costs.” In Jackson County, 24% spend 35% or more of their household income on selected monthly owner costs.
To address this growing crisis, in 2019, Oregon Housing and Community Services launched the agency's first five-year Statewide Housing Plan following extensive listening sessions across the state. The purpose of the plan was to identify areas of critical need and provide a strategic framework for OHCS to inspire coordinated action and build support for addressing Oregon's housing challenges. A progress report was recently published at: https://www.oregon.gov/ohcs/pages/oregon-state-wide-housing-plan.aspx.
Here in the Rogue Valley, efforts to address houselessness have also had some success, although the need continues for many. Most recently according to an article published in the Grants Pass Daily Courier, Oct. 6, 2024, “Rogue Retreat will get $315,179 to expand its transitional housing for people leaving residential addiction treatment or the indoor Kelly Shelter in Medford for homeless people. The nonprofit group has three housing facilities for men, women and families, and plans to buy a house to expand transitional housing. The council also approved using $331,647 to cover improvements at the Rogue Retreat Crossings site, which features tiny houses, tents and facilities with running-water toilets, showers, washers and dryers. Upgrades will include a sidewalk for better accessibility, removal of a dirt pile left over from construction, and other improvements.” The Grants Pass Daily Courier also recently noted, “Grants Pass will have two authorized sites where homeless people can rest — the vacant lot next to the police department at 726 N.W. Seventh Street and another site that's already open in a large field at 755 S.E. J St. At the site next to the police department, the city recently finished tearing down an old building to prepare the lot to become a homeless campground.” According to city officials all authorized campgrounds are considered temporary. A proposed water treatment plant is slated for one of the currently used parcels.
Prior to the 2007-2009 Great Recession, the problem of providing adequate, affordable, and attainable housing was already an issue on the public agenda. Since 2006, when the Southern Oregon Workforce Housing Summit occurred to address affordable workforce housing in the local area, the housing market has been affected by several national and global events. Some of those were a bursting of a housing bubble and the Great Recession, a global pandemic, and in the Rogue Valley, the sudden loss of 2,500 housing units, much of the area’s naturally occurring affordable housing, during the Almeda fire and other fires four years ago. This update looks at a few recent data points that show where we at today in some of those metrics surrounding the topic of housing.
Residential Building Permits
Building permit data, a proxy for the supply of shelter or residential housing units, gives a forward-looking indicator of potential housing supply. If a permit is issued, it’s not a certainty that it will be built, and when the residential housing unit is finished and ready for occupancy is not known. But overall it’s a good measure of the pace of residential construction activity over time. Following the Great Recession, residential permits have shown modest recovery.
In the Rogue Valley, residential permits have ranged between about 1,475 and 1,600 units from 2021 to 2023. While above the low point of around 500 annual residential permits issued in the 2009-2010 period, the level most recently is far below the 2,700 to 2,880 or so residential permits issued back in the housing boom era of 2003-2005. During the first seven months of 2024, year-to-date totals show the Rogue Valley on a similar pace for residential building permit issuances as in 2023. Part of the recent uptick in residential building activity is related to the recovery from the Almeda fire. The Phoenix and Talent cities’ share of Jackson County building permits ranged between about 2% and 10% of the county’s annual residential building permits from 1993 to 2019. In 2022, those two towns accounted for about one-quarter of Jackson County’s residential building permits, when Phoenix and Talent totaled 251 residential permits.
Construction of accessory dwelling units (ADUs) can also help with the housing supply. Various legislation actions have encouraged increased production of ADUs in some cities in Oregon. Data from BuildinganADU.com show that from 2018 to 2022 Medford issued permits for 110 ADUs, Ashland issued 71 permits. Statewide, 3,231 permits for ADUs were issued, with Porland accounting for 1,655 of those according to these estimates. You can find more resources at https://www.buildinganadu.com/
Construction Employment
Oregon has recovered construction jobs that were lost during the Great Recession, reaching the housing boom-era peak again by 2018, on an annual average basis. During the pandemic, not seasonally adjusted data shows Oregon lost jobs only in April 2020, and then regained those lost jobs during May and June. By May 2021, Oregon construction employment reached 111,400, 1,900 jobs above the prior May employment peak in 2019 when construction employment totaled 109,500. As of August 2024, Oregon construction employment was 7.6% or 8,700 jobs above the August 2019 pre-COVID total.
The Rogue Valley hasn’t been as quick to recover jobs lost during the Great Recession. Locally, construction employment peaked in late summer 2006, with about 8,000 payroll construction jobs. There are many who are self-employed in construction and are excluded from this analysis. Six summers later, after the bursting of the housing bubble and near collapse of financial markets resulted in recession that cost the industry about one-half of its prior employment, construction declined to about 4,000 jobs. Summer peak employment plateaued at about 6,000 jobs in 2018 and 2019. During the pandemic in 2020, the industry only lost jobs in April and had recovered those losses by July when employment was again about 6,000 jobs.
Recently, construction employment reached a peak of about 7,000 jobs in August 2023 and is down about 180 jobs as of August 2024, at 6,820 payroll construction jobs in the Rogue Valley. Even with the steady gains, August 2024 construction employment in the Rogue Valley was about 1,130 jobs below the total reached in August 2006.
Many construction workers who lost jobs during the Great Recession found work in other industries during the recovery. In addition to construction worker retirements as the workforce ages, fewer younger workers may have been attracted to this sector that experienced a large contraction in the early 1980s and again in the late 2000s. Workers who leave an industry, retiree, or migrate to a different area all create job vacancies in addition to job openings due to growth. Even in slow growing or even overall declining industries, there are many vacancies created due to replacement openings and a constant need to train the next generation of workforce. In our 2023 Oregon Job Vacancy Survey, the construction industry had 435 vacancies with an average wage of $26.19 in the Rogue Valley, fourth behind the health care industry with about 1,980 vacancies. Construction and extraction occupations accounted for about 7% of Rogue Valley vacancies in 2023, according to our survey.
To improve the availability of skilled and trained construction workers, the Rogue Construction Partnership fosters talent pipelines, educational and K-20 outreach, and business-to-business partnering. A new skilled trades pre-apprenticeship program is starting up in the Rogue Valley soon. More information can be found at the Bureau of Labor and Industries.
Home Prices in the Rogue Valley
With less construction employment recovery relative to Oregon, and less permit activity than before the Great Recession, area home prices and housing costs are relatively high. Many millennials looking to transition to home ownership and positive net migration have been conspiring to squeeze the supply of available homes, putting upward pressure on home prices. The remaining analysis focuses on the home sales market. Zillow publishes a home price index for our counties, estimating home prices for mid-tier housing units – those selling between the 35th and 65th percentiles of all home sales.
It took a number of years for Rogue Valley home prices to reach their prior peak reached during the housing boom years in the mid 2000s. By 2018, home prices in Jackson County hadn’t quite reached the peak of 2006. Recently, home values in the Rogue Valley peaked in summer 2022, when the mid-tier home price for Jackson County reached $447,304, quite a bit above the prior peak value of $338,641. Josephine County home values reached$414,839, also substantially higher than the prior peak. Since then, price growth has eased and the index drifted a bit lower, showing Jackson County at $429,283 and Josephine County at $400,741 as of August 2024.
Other government and private sources of home price and sales data corroborate this theme of escalating shelter costs. One source is the Federal Housing Finance Agency. They publish a quarterly home price index for Metropolitan Statistical Areas. As of the second quarter 2024, U.S. home prices rose by 4.5% from the same quarter in 2023. Among the 260 or so ranked Metropolitan Statistics Areas, the Medford MSA (Jackson County) home prices rose by 0.8% from second quarter 2023 to second quarter 2024, the 236th fastest increase. Jackson County’s average home prices rose by 39.0% during the past five years. Among unranked areas (due to too few home sales transactions), Josephine County home prices rose by 1.2% over the year and by about 43% during the prior five years. Among Oregon MSAs, Bend had the fastest price increase, up by 5.3%, or the 145th fastest among the 260 or so ranked U.S. MSAs. The advantage of the FHFA data is that it compares the change in prices for the same residence over time, whether it is sold or refinanced. They also publish a purchase-only index for larger geographies.
Another rich source of local real estate, home sales, and price data is available from the Southern Oregon Multiple Listing Service. Visit their statistics page for Rogue Valley market summaries and reports. In the July through September 2024 period there were 559 urban homes sales in Jackson County, down from 578 the same period one year before. Josephine County urban sales were little changed from 153 to 149 over that time. Median existing home sales price during the July through September 2024 period rose by 10% from the same time in 2023 in Jackson County and by 2.6% in Josephine County. Jackson’s median existing home sales price was $400,000 while Josephine’s median urban home sales price was $380,000. The average time a home spent from listing to a pending sale also rose during that time, from 18 to 24 days in Jackson County and from 19 to 36 days in Josephine County. During the past year, inventory of homes for sale increased. On Sep. 30, 2024 there were 842 homes listed for sale, up from 733 homes one year earlier. Josephine County inventory rose from 354 to 414.