Friday, January 3, 2025

2025 Clark County Real Estate Outlook

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.

Population Growth and Demand

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%. 

Housing Inventory

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.

Market Segments
  • 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.
Key Challenges
  1. 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.
  2. 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.
  3. 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.
Opportunities
  1. 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.
  2. 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.

Friday, December 20, 2024

Happy Holidays!

With the ZoomInfo project complete, Downtown has another quality public space available and another 500 parking spaces for the general public to use. Check out the completed project at Terminal One. Ascend the six flights of stairs to the plaza in between the two high rises to enjoy nice city views to the north and rive views to the south. You could also park in the garage and take the elevator up tot he 5th floor to make the ascension more comfortable :)

The Couv Life wrote an article about it here.

Vancouver is doing a good job of creating through development incentives public spaces that enhance the urban living experience. The Port of Vancouver is doing the same and this will eventually connect to the public market and cruise ship landing when the new dock is finished in a couple years.

If you are interested in living Downtown take a look at the Urban Living in the Couv website that covers all of Vancouver's urban condominiums and many of the apartment buildings in detail. 

Have a warm and delightful holiday season.

Friday, December 6, 2024

How is the market these days? Well this summary from Chat GPT is a good start, but I'll embellish at the end :)

The housing market in Clark County, Washington, has remained relatively dynamic in 2024, reflecting broader national trends while showcasing unique regional characteristics. As of December 2024, the median home price in the county has increased to approximately $575,000, representing a notable rise from last year. However, homes are staying on the market longer, with an average of about 40 days compared to 25 days in 2023. This indicates a potential cooling from the hyper-competitive conditions seen in recent years.

One of the key challenges for the market is the high mortgage rates, which, though slightly lower than earlier in the year, continue to influence buyer affordability and activity. Inventory remains constrained, with just over 2,400 homes available as of November, making competition for quality properties intense. Sellers often achieve near-list prices, signaling strong demand despite these affordability issues.

For buyers, the market presents a mix of opportunities and hurdles. The extended time on market can provide more room for negotiation, but limited inventory and competition still require decisive action. Meanwhile, sellers can capitalize on stable prices but need to be strategic with pricing to ensure a timely sale.

In conclusion, Clark County's housing market reflects a balanced yet competitive environment. Both buyers and sellers must navigate these conditions with informed strategies to meet their goals.

The AI managed to fish out an important bit of market reality that it mentioned but needs a bit more context. Quality properties are in high demand and these are the properties that when priced right will fly off the proverbial shelf, so to speak. Lesser quality properties such as older outdated homes or those needing some classic TLC will sit on the market. These are the properties that buyers struggling to afford a home should be targeting. As long as the house is good enough to be financed by a bank and provides immediate shelter, buyers really should try and get in while they can. If rates get better one can always refinance, but if they go higher it could be years before the lower rates return. Even if our market sees a correction in the next couple of years, buyers can ride that out. The worst real estate correction in three generations happened in 2009-2012 and most buyers that rode it out saw their homes back at pre-crash value in less than five years. Buyers should prepare to stay in the home for five to seven years anyway, owning real estate is a long term play. Short term living arrangements are what rentals are designed to facilitate.

We have seen the median home price continue to creep up even as inventory levels have risen. Until we see 6-8 months of inventory we will likely continue to see rising prices. Inventory sits at about 3 months right now.