Is the Vancouver/Camas housing market finally starting to cool a bit?

[texasdiver]

Some actual data from Today's Columbian: https://www.columbian.com/news/2018/...-in-september/

Here's an excerpt

New listings, pending sales and closings fell in September compared to August, and they came in below levels in September 2017. Average and median sale prices also fell from August, although they came in higher than the prices reported in September 2017, continuing an overall trend of higher prices in 2018 compared to the previous year.

Mike Lamb, a local real estate broker at Windermere Stellar, said that the market still saw its fourth best September for new sales since 2005 despite the declines in sales and listings.

“Whatever the causes, whether it was the teacher strikes, interest rate increases, the weather or something else, the September market was still good by historic standards,” Lamb wrote in his monthly report analyzing the Clark County data.

The average sale price of Clark County homes for the first nine months of 2018 was $392,300, an 8.9 percent increase over the $360,400 average for the first nine months of 2017. The median sale price for the first nine months jumped 9.2 percent, up from $325,000 in 2017 to $355,000 in 2018.

Those rates of increase are likely to slow next year, said Terry Wollam, managing broker for ReMax equity group in Vancouver, although prices overall will probably continue to move upward.

“For next year, I would assume that we’ll see a plateauing of pricing — maybe appreciation that will take place equal to the inflationary rate, in that 2 to 3 percent range,” he said. “I’m not seeing our prices softening, just because inventory still has a ways to go before prices fall from it.”

The overall number of active listings in the county has been growing in the past few months, and rose to 1,979 in September, the highest number in any month since the start of 2016. Camas, Washougal, Battle Ground, Ridgefield, Brush Prairie, north Salmon Creek and Evergreen had the county’s most listings.

[MtnSurfer]

Originally Posted by texasdiver

Some actual data from Today's Columbian: https://www.columbian.com/news/2018/...-in-september/

Here's an excerpt

Yes, it does look like a cooling is happening even if slowly. That doesn't mean prices are falling or anything severe is happening like an impending crash. But there does seem to be signs of a shift now more toward a buyer's market. The next few months will be telling as new homes continue to be built while existing homes stay on the market longer. There is also the likelihood of another interest rate increase. Combining all those, I think its a safe bet that there will be a leveling off. The amount of that change is still the biggest unknown.

Derek

[cyberous]

Originally Posted by MtnSurfer

Yes, it does look like a cooling is happening even if slowly. That doesn't mean prices are falling or anything severe is happening like an impending crash. But there does seem to be signs of a shift now more toward a buyer's market. The next few months will be telling as new homes continue to be built while existing homes stay on the market longer. There is also the likelihood of another interest rate increase. Combining all those, I think its a safe bet that there will be a leveling off. The amount of that change is still the biggest unknown.

Derek

As a prospective home buyer/relocation how does that make you feel?

We are looking at a vacation home/luxury item and holding off with the belief that we will see a significant correction.

[texasdiver]

Originally Posted by cyberous

As a prospective home buyer/relocation how does that make you feel?

We are looking at a vacation home/luxury item and holding off with the belief that we will see a significant correction.

Interest rates are also rising so the two effects may cancel themselves out. A 1% rise in interest rates from 4% to 5% increases the monthly payment by about 11% So if interest rates rise 1% and home prices fall 11% you may very well end up back at the same point.

Using the google mortage calculator:

$100,000 loan for 30 years at 4% produces monthly payments of $477
$88,800 loan for 30 years at 5% produces monthly payments of $477

Of course if you are planning to pay cash for a vacation home rather than taking out a mortgage then it is obviously a different calculation.

Vancouver home prices basically follow lock-step with the greater Portland metro area. All real estate is basically local. To me the Portland area looks more like San Francisco than say Houston in that there are tremendous NIMBY and regulatory restrictions that prevent large increases in the overall housing stock. Most of Portland is zoned for single family and there are rigid urban growth boundaries and strong NIMBY politics. So the increase in supply is likely to never keep up with increase in demand as long as the metro area continues to grow.

What are the chances that the Portland metro area will see an economic crash in the future that causes people to flee in large numbers like the Boeing crash in Seattle in the early 70s and early 80s. Or the Houston oil crash in the 1980s? I have absolutely no idea. The Portland area economy is more diversified and will always be a generally appealing place for people to move to due to the quality of life. I honestly think a national recession like 2008 is the more likely scenario to crash Portland housing prices rather than something local that crashes the Portland market without affecting the rest of the country. Just because Portland is a generally appealing place to live and the world economy increasingly global and electronic and less tied to specific geographic locations based on natural resources and transportation. Housing prices in Portland could also become affected by things like waves of Chinese or other foreign buyers just as has happened in San Francisco and Vancouver BC.

Bottom line? If I was moving to the area today I'd still be buying and locking in the best rates I could find. Even if housing prices soften in the next year or so it isn't necessarily going to be any cheaper or easier to buy if rates continue to rise. But I also wouldn't buy unless I was thinking long term, at least 5-10 years.

[MtnSurfer]

Originally Posted by cyberous

As a prospective home buyer/relocation how does that make you feel?

We are looking at a vacation home/luxury item and holding off with the belief that we will see a significant correction.

Overall, I really like that things are shifting. Market conditions I do not like are similar to what we've had:

1. Bidding wars on homes selling above listing even if they are nothing that special
2. Limited inventory to choose from
3. Sellers feeling so embolden they could 'care less' if their home is in need of repairs after inspection. This leads to an unwillingness to negotiate, make concessions for problems found, etc...

The rest is simply about timing. With a cooling market I am already seeing a greater frequency of relative good deals. As an old appraiser, those are the homes selling under other recent sales in those same neighborhoods (the comps). Maybe the sellers are more motivated and want a quick sale or are tired of the house sitting on the market. If something like that comes along when we're ready to buy it becomes a lot more interesting than the same old things - either overpriced or in a mediocre neighborhood.

As texasdiver mentioned, rates are rising. But I wouldn't run out and buy any old thing just because. We're not ready yet anyway with kids finishing up the school year. As a second home purchase, I would simply be waiting and watching for good values. Then see if there is some room for negotiations.

Derek

[cyberous]

Originally Posted by cyberous

I think supply is finally catching up with demand in downtown. The Uptown development has many vacant units. This is one of three multi housing complexes that just finished in the past year. Five new properties listed in the "Zone" and all look to be way overpriced (people late to the game) but we will see.

Rising interest rates limit the purchasing power for most buyers.

To my surprise and dismay all 5 houses sold in a relatively short time, two did have price reducitons. Houses still look to be moving, I guess downtown is just a hot market and still relatively "cheap" to outside buyers.

[texasdiver]

Originally Posted by cyberous

To my surprise and dismay all 5 houses sold in a relatively short time, two did have price reducitons. Houses still look to be moving, I guess downtown is just a hot market and still relatively "cheap" to outside buyers.

I think downtown is so popular because it is becoming more of an extension of Portland. It is really only 8 miles and about 10 minutes between downtown Vancouver and downtown Portland and there are reasonable (but not ideal) ways to commute to Portland that don't involve getting stuck in cars. Plus the area is really looking up in terms of walkable attractions downtown and in the neighboring uptown area with all the restaurants and breweries. They are making apartments as fast as they can and a new grocery is apparently in the works for the area next to Esther Short Park so it is by far the most urban part of Vancouver and that is what a lot of people want. The rest of Vancouver is much more suburban and car-dependent which is also what a lot of people want. But there is a WHOLE lot more of that and very little of Vancouver that is truly urban so I think that explains the demand downtown. When I was a kid there were industrial breweries and paper mills around downtown Vancouver. The change since then has been remarkable. But I guess that is the case for much of Portland. When I was in college there was nothing north of Powell's bookstore except industrial warehouses and the Weinhard brewery. When I was in college you could smell the rich odor of hops and barley from Powell's. The entire Pearl District is all new since the 1980s.

If it were me and I was working in downtown Portland I would contemplate biking across the bridge and then hopping the light rail from there as there are bike racks inside the trains. It is a 2 mile bike ride from Esther Short Park in downtown Vancouver to the Yellow Line train stop at the Portland Expo Center so easily done. Or better yet, get a nice folding bike that you can then carry into your office in downtown Portland and put under your desk in your cubicle so you don't have to worry about thieves. That is as easy of a commute as from many parts of Portland proper and frankly easier than from many parts of outer Portland or places like Beaverton. Once there is a proper grocery within walking distance of downtown I think the area is really going to explode.

I guess there are also express buses that are a reasonable option but that puts you into the same traffic as the cars.