Clark County's real estate market in 2025 is expected to remain resilient despite potential economic headwinds and ongoing shifts in housing preferences. Key drivers shaping the market include sustained population growth, changing interest rate dynamics, and a continued demand for diverse housing options.
Clark County continues to attract residents due to its relative affordability compared to most of Portland and Washington County, OR. Our desirable quality of life. Proximity to urban amenities, a robust job market, and scenic surroundings make it a magnet for families, retirees, and remote workers. As the population grows, the demand for housing is expected to keep pace, particularly in suburban and semi-rural areas. So long as our legislature and new Governor don't get greedy, we will continue to offer a superior tax profile than our southern neighbors in Oregon.
Home Prices
Median home prices in Clark County are likely to see modest appreciation, continuing trends from 2024. However, price growth may be tempered by affordability challenges and higher borrowing costs. As of late 2024, the median home price hovered around $540,000, and projections suggest a moderate annual increase of 3-5% in 2025. I feel like the projections for appreciation are a little ambitious. Unless we see a 1/2 to 1 point drop in rates, appreciation will likely be more like 2-3%
Interest Rates
The Federal Reserve's stance on interest rates will significantly influence the market. If mortgage rates stabilize or decline slightly from their 2024 levels, buyers may return to the market in greater numbers, boosting sales activity. Conversely, persistently high rates could cool demand, especially among first-time buyers. it is important to keep in mind that current rates are only slightly above the 50 year rolling average. Having just exited a long period of well below average rates, younger borrowers are not accustomed to the "real normal." The fifty year average mortgage rate is in the mid sixes and we are currently averaging around 7%.
Inventory levels in Clark County are expected to remain tight, as new construction struggles to meet demand. Rising construction costs, labor shortages, and regulatory hurdles continue to constrain the pace of development. However, several new housing developments, particularly in Ridgefield aim to address these shortages.
- Single-Family Homes: Continued strong demand, especially for homes priced under $600,000. The classic median priced single family home remains firmly in the grip of sellers with about three months of inventory available.
- Multifamily Housing: Increased interest in apartments and townhomes as affordability pressures push buyers toward more budget-friendly options. This segment has been ferociously competitive over the last decade but saw some taming in late 2023 and early 2024. The end of the year saw things tighten again however.
- Luxury Market: Demand for high-end homes may stabilize but remain a smaller segment of the market. Vancouver's luxury condo market is just a bit saturated with inventory at the moment, but sales are steady enough to keep prices stable.
- Affordability: Rising home prices and higher borrowing costs remain significant barriers for entry-level buyers. Our area is one of the most expensive in the country, yet a significantly more expensive market in the Seattle Metro is driving substantial numbers of people to our local area.
- Inventory Shortages: Limited availability continues to frustrate potential buyers and drive competition. That situation however showed a great deal of improvement in 2024 and 2025 could see inventory levels rise a bit more. Seller's may yield a bit of the market back to buyers this year but I doubt we will move beyond a neutral market in 2025.
- Economic Uncertainty: Broader economic conditions, including job growth and inflation trends, could influence housing demand. Inflation has finally calmed a bit but remains slightly above average. A new incoming administration at the federal level and state level could move the market one way or another.
- Urban Growth Areas: Expansion in developing areas like Battle Ground and Washougal offers opportunities for affordable housing. Vancouver's Urban Growth Area still has large areas of available land for suburban and urban scale development.
- Remote Work Influence: Remote workers continue to drive interest in Clark County, where they can enjoy suburban living with proximity to a major metropolitan area. All four of the Portland Vancouver metro area counties provide this amazing synergy of a fast transition from rural to suburban to urban. This dynamic is typically only found in mid tier major markets like Portland-Vancouver, Sacramento, Las Vegas, Cincinnati, Nashville, etc.
Overall, the 2025 housing market in Clark County is expected to balance modest growth with ongoing challenges. There are opportunities for every price range locally so buyers need not be discouraged just know that in times of high housing costs, some buyers may have to settle for something a little less than ideal. But these are stepping stones to getting the perfect house.