IVN Contributing Writer
Cave Junction continues to expand its housing construction sector. Since 2017, 117 new homes have been built here. But the recent increase in mortgage interest rates may have started to cool things down.
Economists differ on the effect of interest rates on the housing market. Nadia Evangelou, senior economist and director of Real Estate Research at the National Association of Realtors, said that “when the borrowing cost is larger, more buyers are being priced out. Consequently, home sales activity is slower and home prices typically fall.”
Alternatively, Jessica Lautz, deputy chief economist and vice president of research, also at the National Association of Realtors, said, “It is important to note that housing supply is extremely limited, and even with higher mortgage interest rates, home prices may not decline. Bidding wars are still occurring in some areas of the country, which puts pressure on home prices.”
Both of these apparently conflicting opinions are a comment on overall trends. But what’s the story in little Cave Junction? To get a handle on that, the Illinois Valley News interviewed two local housing developers.
Reggie Boltz has built and sold five homes on one acre lots and has one under construction at Illinois River Estates, below the Taylor Sausage plant. Sale prices were in the high $300,000s to the low $400,000s. At the Cedar Brook 55 plus community where lots and houses are smaller, he has sold four in the low $300,000s and has two more under construction. Boltz describes the housing market as being in neutral, with a little bit of movement but not a lot.
“We have a number of lots to build on but we’ve slowed way down on the housing starts. We don’t want to have houses we built and not sell them. Some people are still buying homes but they’re mostly from California and they have the money.”
Barbara Howard owns 61 lots in the gated Pomeroy Subdivision and has built 57 homes on one-quarter to one-half acre lots. All the homes were presold for around $400,000. But she believes we are starting to see a cooling of the market. “Areas like CJ get hit first and get hit hardest because there’s not the amount of money and jobs that places like Eugene have.” She added that most recently she is starting to see all cash buyers, for whom interest rates are not an issue.
Incidentally both developers had nothing but good to say about their experience working with the city of Cave Junction. The city is currently facing an $8.4 million lawsuit from housing developer Siskiyou Pines, owned by David and Nancy Garcia, who have charged the city with putting impediments in the way of their development.
“I’ve found that when you follow the rules everything goes smoothly, but when you don’t follow the rules, it’s a bumpy road,” Boltz said.
According to Howard, “Cave Junction has been most helpful, courteous and professional … Cave Junction really cares and they really want development here. But you have to abide by the regulations.”