Vancouver housing and real estate (Camas, Washougal: sales, 2013, apartment)

[ski junkie]

I've been doing a lot of searching on the web re this topic and have come to some preliminary conclusions. Comments as to whether my conclusions are somewhat correct or off base would be appreciated.

First, the Portland/Vancouver (P/V) job market has been hit hard by the recession and the unemployment rate is over 10% which is higher than the rest of the country.

Second, the sky high real estate prices of a few years ago have come crashing back to earth.

With the preceding in mind, I'm seeing a lot of available properties. I'll limit my focus to the Vancouver area and not Portland. Many of the properties outside of Vancouver, proper, are in brand new housing developments. A very high percentage of these properties are simply empty lots in these developments and the purchase price includes a not yet built house. I m not able to find any of the developers of the bigger developments.

Can I accurately conclude that these developments were built on speculation and when the market tanked, most, if not all, of these developers went bankrupt? Is it accurate to conclude that most of these developments are now owned by the banks or are in receivership?

It seems individual builders are offering to help potential buyers find properties and the builders will then build a house from a number of popular designs. Is this what's going on? If so, will the banks who hold these properties sell direct to the public? Do the properties that have been previously foreclosed upon ever come up for auction? Is there any kind of a real market for these properties or do they just sit there waiting for better economic times?

I don't see the prices increasing any time soon. In fact, I would not be surprised to see an additional 10 to 20% percent drop. I've seen some properties sell for as much as 45% less than their original asking prices. Obviously, I'm not comfortable buying a property at today's price and seeing it drop in value over the next couple of years. Are today's sellers, whoever they are, still willing to drop their prices rather than watching a further erosion in the price over the next couple of years? Are the banks or receivers motivated sellers or are they holding out for 2007 prices?

How has this affected the rental market? Are some of these properties with a built house on it available for rent? If so, what are the asking rental prices? Are they rented with an option to buy?

Any comments on the preceding would be greatly appreciated.

[StealthRabbit]

Your heading is not too specific as to what you need for information. If it is housing / or new construction (looks most likely) then you need to be VERY CAREFUL. Clark County and Vancouver have VERY HIGH permitting and impact fees AND it is seriously overbuilt for 'generic' and $400k- $600k homes ('California suburb specials'). I would not consider building in these markets. I really want to build an eco-senior focused village (gardens and energy homes with public spaces, greenhouses, shops, gardens), BUT I can't digest the 'risk' or development costs in Clark County. It is too bad as we have nothing similar, yet a big need.

RE: RE development in general...
You can probably do a search on Columbian website / archives, but local developers got hammered due to a number of reasons, the most painful being a bank failure of a local bank that was a heavy lender to developers. For what I understand... FDIC took it over and transferred assets and collections to another bank who sold the collectables (financing for subdivisions) to a hedge fund (of which a TARP drafter is a principle)... This Hedge Fund forced the notes due 100% NOW, and developers who had always paid their payments on-time and had plenty of equity 'on the books' were supposed to pull millions of dollars out of thin air to pay off this hedge fund. The Hedge Fund forced auction and the 'bargain's were snatched for pennies on the dollar. Several honest, credible, responsible, developers got 'cleaned out'. Ironically, the assets were snatched by a corporation that is made up of investors from previous said 'hedge fund' who know they are getting bargains while 'cleaning-out' legitimate local businessmen. NOTE: this same thing (force foreclosure) is happening all over USA to both business folks AND private homeowners who were never late or delinquent in payment. BTW... could you and your 50 neighbors cough up the cash to pay all your homes off tomorrow? (likely not for most folks). Its real ugly out there.

Yes, likely we will see a further downcycle in RE prices, or at least a very protracted bottom trough. For desired locations and properties, they are hot sellers even today. For mediocre properties (generic / tract homes AND high end properties...) the bottom (and time-on-market) is elusive. Vancouver was hit very hard in late 1970's and early 80's. resulting in a 10 yr RE market slump. (where I picked up some sweet deals... now long gone )

The auctions are tough to win a bid due to a team of local investors who control (purchase) the sales in a 5 county region. There is a lot of 'insider' pressure and you are not likely to have / retain a winning bid. Then there is the 8-12 month 'redemption' period... (for sheriff sales). More risk. It is possible to buy from banks. There are a certain few realtors who are representing these banks sales. You can figure them out pretty fast by looking at RMLS stats. They are the few realtors with very high sales volumes (~100% higher than the next highest activity). Often these are sold within 1 day of hitting the market, and yes there are some bargains.

Rentals are holding pretty strong since many people cannot qualify for the few loans available as the banks currently rake in BIG BUCKS on spread. while doing very little lending, and certainly NO 'RISK' lending.

At the moment, it is possible to pick up some nice positive cash flowing properties in the region.

IF you are planning to eventually come to Vancouver... It COULD be a good idea to pick up a positive cash flowing property that would position an asset for you within this region. Later, you could convert it to a primary residence, (5 yr occupancy is required to convert investment prop to primary res and get the $500k capital gains exclusion). You could also 1031 into a more fitting place, or retain for investment or private home. There are lots of bargains. Just be sure to buy something that has attractive resell. (good area, classic home, quaint, on a park, in the way of commercial development, ..., the usual). I prefer rural view properties (mostly outside of but adjacent to Clark County, and on paved roads within 5 minutes of a thoroughfare). When I go to sell, I have only a bit of competition, not thousands of tract homes just like it.

Many houses are available to rent (including some pristine rural view homes). Camas and Washougal have oodles of very nice NEW / near NEW homes that one can rent. (some were being offered for free to keep them occupied and safe from vandals). For 'market rents' the rates are ~ $800 to $1000 for 3bdrm homes in city. Rural can be more or less. You can easily find 'rent-to-own' and owner finance incentives. Frankly, I would look for best 'potential-of-appreciation-gain', and forget about a 'dream / just-right house'. If you can ride an appreciation gain and sell, you can collect FREE capital gains AND 'buy down' and do it all over (every 2 yrs). There will be excess homes in this region for many yrs. I know multitude of folks who wished they could sell and move on. (including me!). I need to move overseas to afford healthcare and flee Obamacare. 2013, is 'drop-dead' date Houses should be REAL cheap then, and you could capture a 'capital gain' on a 2011 purchase If you play your cards right.

[William69]

Hello there,

I am new to Vancouver, living in an apartment now but plan to buy a house. I am confused about the property tax here. Let say, if I own a house of 200,000, how much will I have to pay for property tax totally?

Thanks

[StealthRabbit]

Originally Posted by William69

Hello there,

I am new to Vancouver, living in an apartment now but plan to buy a house. I am confused about the property tax here. Let say, if I own a house of 200,000, how much will I have to pay for property tax totally?

Thanks

IIRC, Clark Count varies from $10 to $18 per thousand, so... $200k Valuation (not sales price) will run ~$2000 - $3600 / YR).

Talk to the assessor, as ONLY they know how much they need to soak you for taxes on a specific location (BTW, It's bound to increase...)

Tax districts are very unique to property location and may include extra levies from city, fire, library, local improvement district, sewer improvements, water district, roads, parks, transportation, police, Emergency services ... You name it, they tax to get it.

As mentioned, talk to assessor about specific mil rate for your chosen property. AND REMEMBER, WA properties are paying taxes in 2011, based on 2010 valuations. AND your purchase price has absolutely nothing to do with what the assessor thinks your Fair Market Value is. They will make it what they need it to be to cover their revenue needs. They use 'Sweet Spots' (i.e. nearby homes that bring a premium / or are held and rolled for 1031 investments.) I have fought my assessment many times, impossible to win a worthwhile concession, AND it grumps the assessor off, so you WILL get charge extra later. (If you fight your valuation may drop by a few thousand due to the hearing, but NEXT year they will get PAYBACK.


Disclaimer.. I am a very disgruntled Clark County Tax payer. (My current property taxes went from $800 / yr to $12,000 / yr ) That is a tad excessive ($33/ day). No one wants to buy my place, as they can drive another 30 seconds and get into the next county and have 1/10th the tax burden. (More realistic assessor)