Friday, January 17, 2020

Infill Continues in Vancouver's Older Neighborhoods

Vancouver has been pushing urban infill for years now and the trend of tightening up older areas and vacant lots has not slowed. It has continued at a blistering pace. The city is pushing developers to build more units per acre and is quite ready to authorize high-rise and mid-rise apartment and condo buildings to help keep the city growing without gobbling up the remaining open space in Clark County.

The city is also allowing a fair number of ADUs (Accessory Dwelling Units) in town including many of the older neighborhoods such as Rose Village.

These accessory dwelling units are not intended as multi-family but in fact act a bit like it. Housing, particularly affordable housing for young people and elderly people is very tight in out local market. ADUs are generally something that is ideal for an elderly parent or an adult child either of which prefer to remain close to "home" but independent. Often an ADU is built for that specific purpose but later on when the family member no longer needs to ADU often it becomes an affordable rental for someone.

Vancouver has been reasonably loose on issuing permits for these types of structures and in the current state of our local rental market it is a good thing. The city has been concerned with urban sprawl and ADUs are one way to help combat it.

One only need to drive around the city to see that density has been the modus operandi for much of the new development, especially in the greater Downtown area. with current trends, and ADU can significantly increase the value of a property. Whether the value will increase commensurate with the cost of improvements depends largely on the type of improvement needed to pull it off and the local governments continued support of ADUs as rental units.

An ADU can be as simple as a converted garage, of attic over the garage to a completely detach and separate structure. The latter is likely a fair bit more expensive. Before any homeowner starts hammering away, a check with the local government to be sure any proposed project is in compliance is a must.

Depending on a homeowners circumstances and ADU may solve a personal family dilemma while improving the vale of the property.

Friday, January 10, 2020

State of the Market 2020

Last week I gave brief outlook on the market for 2020 but today I will dive into the "state of the market" at the moment. Right now we have a bit of a tale of two markets if you'll pardon the Charles Dickens reference. In fact it may be a tale of three markets.

Breaking down conditions by relative price points will show that conditions vary wildly depending on price range. Now locations and neighborhood specific variables always play a big role in the real estate market, we tend to have broad market indicators that typically effect most segments similarly. But not so much right now. I will rate the market conditions based on a 20 point scale 0 is dead neutral. 1-10 Seller's market and -1 to -10 Buyer's Market. Take a look below:

Single Family Detached housing


  • < $300,000 +5 Seller's Market multiple offers common on well priced properties, overpriced listings linger but ultimately sell.
  • $300,000 - $400,000 +3 Seller's Market multiple offers on well priced home under $350k not so much above that. Marketing time @30 days
  • $400,000 - $550,000 0 Neutral Conditions are prevailing with neither side seeing an advantage. Even well priced homes may require some marketing time. Typical days on market 30-45
  • $550,000 - $700,000 -2 Buyer's Market. Buyers have the upper hand here due largely to an expanded inventory and a fair amount of high end new construction filling the space. Marketing time in this price range for properly priced homes is likely to exceed 60 days.
  • $700,000 - $1,000,000 -4 Buyer's Market. Although pricing in the range is holding steady inventory exceeds buyer capacity at this price range. Buyer's have many options. Marketing time in this segment will approach 90 days for properly priced properties, well priced properties will sell faster, of course.
  • > $1,000,000 -6 Buyer's Market. This segment is notoriously slow due largely to the limited number of qualified buyers in this upper range of pricing. Again like the last segment, pricing is holding up, but demand is weaker in the lofty price range so marketing time can be quite long.

Often times news media will present broad market conditions and as such this broad market is neutral with neither buyers nor sellers holding the advantage. But looking more closely at individual segments tells another story. So broadly speaking, it is neither the "best of times", nor the "worst of times" pardon again the Dickens reference. But buyers in the bottom pricing segments will still find a competitive environment, mid range is neutral, and high end buyers can kick a few tires before buying.


Generally these conditions are healthy and sustainable. Pricing appreciation should remain in the 2-5% year over year range and that is long term sustainable that allow incomes to keep pace and homeowners to gain needed equity.

2020 is looking good.

Friday, January 3, 2020

Happy New Year: 2020 Real Estate Outlook

Well here we are again in the US another presidential election cycle... yay... you feel the lack of enthusiasm? I will not venture into politics here but I will encourage everyone of legal voting age to vote. So presidential election years often lead to flat economic conditions. It seems the closer we get to the election the more reservations in the financial markets. This has stood the test of time immemorial. This is not to say that recessions result, rather quite the contrary, things tend to stay in the status quo. So the 2020 economic outlook is more or less the same which has been fairly strong of late.

Residential real estate however is a notable exception. Most residential real estate is individuals buying or selling their own private property. They are impacted by supply and demand as well as capital markets such as mortgage banking and construction finance, but residential buyers and sellers decisions are based on their personal needs and situation at that moment in time, elections be damned.

The outlook for real estate in SW Washington remains positive with 2020 quite likely to continue this trend of near neutral market conditions and modest year over year price growth. Sales volume has been rather brisk over the last 12 months almost as if the market were favoring sellers, yet the market favors neither sellers or buyers in a broad sense. Individual macro markets are all over the board with high end properties facing more buyer resistance and entry level properties still firmly in favor of sellers.

The trend over the last several months has been running between 650-750 closed transactions every month in Clark County, which is rather healthy. I think we may see a slow down in overall new construction in the single family homes market, but a continued build up of urban properties like apartment towers and condo towers downtown and on the urban corridors.

Expect interest rates to be relatively flat and sales to continue at a brisk pace. 2020 ought to be a strong year in real estate that should be positive for both buyers and sellers.

Happy New Year!