Friday, March 28, 2014

Long term land prices could get hot.

It has been an amazing half-decade these last five years. After the "crash" it seemed as though Clark County, WA had a lifetime supply of ready to build lots owned by a variety of investment and banking groups. Yet suddenly we find our selves in a bit of a land crunch. Developers are trying to find new build able parcels and are finding that market increasingly tight.

The politics in the area have long been running towards sustainable, non-urban sprawl. It has become necessary for builders to look at urban infill projects and higher densities. The further belabor the issue, the State has created new requirements for storm water mitigation on new subdivisions. All of this leads to higher land prices and greater expense passed on to the buyer of new homes.

Those buyers wishing to take advantage of low interest rates on a brand new home should step up the pace as prices will likely rise faster on new construction than resales. That said, the resale market will benefit long term from increased building costs. The more expensive new homes become the more people will turn to resale property to meet their needs. Furthermore, urban infill on small lots is not for everyone and many families will choose and older home on a big 10,000 foot lot over a newer homes stuffed into a neighborhood like anchovies in a can, on 4,000 foot lots.

The real estate market is in a dynamic flux moment, hey that sounds really cool. What I mean is that we are on the precipice of a shift in they way our community will grow. Clark County has hung on to suburbia and rural development but alas, the time is near that builders will need to move towards a more urban profile in their projects. We have already seen this paradigm shift over the last decade, particularly in Vancouver and that will spill over to much of the county as time marches on.

To the left is the current Urban Growth Boundary map for Clark County. There are still some areas of nice flat build able land, but pickens' are getting slim and that has the building community a little edgy.

In the end build able land will become increasingly expensive and builders will either have to build more dense or more expensive. Any opportunity that a buyer has to acquire property now will likely be money well invested for the future. Interest rates remain low and prices, although on the rise are still below the levels of 2007. This adds up to a great value proposition.

Friday, March 21, 2014

Urban Contemporary Living in Clark County

I wrote a blog post on another real estate blog of mine about view properties in Downtown Vancouver ("Enjoy the View - The Urban Contemporary View is Alive and Well in the 'Couv'". It got me thinking about what a great value opportunity we have in this market for urban condos.

A quick local history lesson will help illuminate our fantastic opportunity here in America's Vancouver. Lovable former Mayor of Vancouver, Royce Pollard led the city on a quest to renew the urban Downtown core of Vancouver that was in derelict condition. Although the epic recession of 2009 delayed some of the development, the Downtown was truly rejuvenated by these efforts and a tremendous live/work walk-able urban environment was successfully created. It is most notably present in the area surrounding Esther Short Park.

In the mid 2000s and until the real estate market crash in '09 the area was booming and some urban condos on the upper floors of the taller projects were fetching seven figures. But the crash was hard on the condo market. Condos all over the city are still a great value. The downtown core offers modern amenities in buildings that are less than 15 years old across virtually all price ranges. There are listings starting as low as $129,000 for units that front the park! For the more luxury minded buyers there are fabulously decorated units with Brazilian cherry, travertine and marble, granite, etc; available in the $400-$600k range. These units are often large, often exceeding 2000 square feet and are perched up high enough to provide amazing panoramic views of the Vancouver Urban core, the Columbia River, West Hills of Portland and even Downtown Portland's prominent buildings.

This is a true value proposition. Vancouver's Downtown does not get as much attention down in Portland as their own urban contemporary projects in the Pearl District or the South Waterfront. This keeps Vancouver priced well and there are many advantages to our Downtown. The 'Couv' is busy enough to give a city buzz, but not so much as to keep you awake all night. Most of the Esther Short Park area is very walk-able with nary a need to drive. Furthermore, the upcoming waterfront redevelopment will bring national spotlight attention on our impressive modern urban environment in the Downtown area. That should help boost values in the recovering economy.

I mentioned in the linked post above, that young singles with entry level income can often qualify to buy the less expensive Downtown condos. It is often young people that enjoy the vibrancy of a downtown scene and they are routinely priced out of that experience either as a renter or owner. Right now that may not be the case. This current situation in the Downtown Vancouver area is likely a fleeting opportunity. As the price of single family detached housing continues its robust upward movement, pressure will mount on the condo market and this low price opportunity will evaporate.

For buyers that fancy the urban scene; Downtown Vancouver is worth a look.

Friday, March 14, 2014

St. Paddy's is here and so is the Spring Market!

That venerable March holiday that brings out the Irish in all us is just around the Corner. This is a time to start thinking about the Spring real estate bump. St. Patrick's Day is not just a green beer holiday party. it signals the early tingles of Spring. The Vernal Equinox is just a few days after the Celtic Celebration The temperature begins to warm, the rains turn to showers, and the sun decides to hang out for more than a peek-a-boo moment. People start thinking about going outside. Driving the old hot rod or walking in the park. And they start looking at homes.

Here in the Pacific Northwest; the early portion of spring can be a fickle time for weather. It is an ideal time to start your real estate adventure. Listing a home in March can be quite successful as discussed in this post from two weeks ago. For buyer getting the process started early is also a good idea. As the month ends and April begins a surge of new listings will appear on the Market. The buyers that started early have the upper hand over those that dive in late. Either they secured their dream home before the "rush" or they eliminated homes, styles, features and neighborhoods they don't like and can concentrate on what they want and like. These buyers can pull the trigger when the spot the right house.

There is more to Real Estate Spring Fever than just the weather. Spring Fever catches all of us. The home and garden shows start up, the Farmer's Market and a whole slew of spring activities that get people thinking about their own home and perhaps new homes they would like to have. This is a great time to start looking at house to buy and or list a home for sale.

Friday, March 7, 2014

Rate of Foreclosure Down, Very Good Indeed.

The rate at which banks are foreclosing on property has dropped substantially over the last twelve months. In general this is of course a very good thing indeed. The National Association of Realtors® has published an article on foreclosure data with which a link to the public portion is included below. Generally foreclosure rates run under 1% in a healthy market and many markets are already at or below 1% foreclosure rate.

Low foreclosure rates inspire buyer confidence and keep under market priced 'as-is' REO from undermining local prices. This can help move the market upward.

Not everyone however benefits from reduced foreclosures. Investors looking for non-financable homes at a bargain price are beginning to feel the pinch caused by a lack of inventory. The last thing a real estate investor wants is competition from an owner occupant buyer. Owner occupants typically use financing from a bank so investors can capitalize on cash only properties without a primary residence buyer inflating the price.

All of that aside, lower foreclosure rates is good for the market and good for the economy.

Public version of the NAR article on foreclosures at the link below.
Foreclosure Rates and Changes: Q4 2013 vs. Q4 2012