Friday, February 19, 2016

Our Healthy Market

Despite some media claims to the contrary the current real estate market in Clark County and the greater Portland Metro Area is not as hot as it was pre-crash. Don't get me wrong, the market is hot, but we are not seeing double digit growth across the whole of the market. Some areas are hotter than others and certain segments are crazy right now. The entry level market is a 'dog-eat-dog' situation with a frenzy of multiple offers on well priced homes under $240k.

Data for the local MLS for Clark County, WA reveals a healthy market. Remember, the robust boom is exciting when prices are rocketing into the stratosphere, but those conditions often suffer a hard landing. Real estate pricing is limited to the market's ability to pay. Incomes only rise so much. We are in a nice healthy situation where home prices are rising nicely, providing equity for homeowners but also staying somewhat in check with incomes. Right now the median household income in Clark County will buy a house priced at 85% of median. Although this is a little less than ideal, it is very healthy especially when compared to markets in California such as Sonoma County where the median household income buys a house priced at only 55% of median.That is not healthy at all. The quality of life in a community where only the wealthy can afford homes is miserable. That is also not sustainable, and this is why those types of markets suffer a boom-bust cycle that is often severe.

We are very fortunate here in the Portland-Vancouver Metro area to have reasonably high incomes and moderately high home prices. Yes this real estate market is more expensive than markets such as Spokane, Boise or Salt Lake City, but we are within 10% of the income in most California markets yet have housing that is anywhere from 20-70% less expensive. That is in a word... "Healthy". Affordability is the key and it remains important to keep housing available to working class people here in Clark County. 

Our local government may have to back off the heavy development fees imposed on builders willing to build in the sub-median market. Governments can be greedy and that is no way to serve the people. I can't help but notice that much of the building boom in new residential construction is coming in well above the median pricing. This is largely because development fees are so high builders simply cannot make a profit building $250k houses. The demand for these homes is astronomical. It will be interesting to see if the local governments can help pave the way to retention of working class home ownership.

Friday, February 12, 2016

New Construction Booming, But Subs are Hard to Find

The local real estate market has been very hot and builders have come back to Southwest Washington en masse. Lots have been bought up and homes are being built. Buyers are flocking to the new developments. But building a house is no longer a 60-90 day affair. Builders are struggling to get them done in less than 6 months and some orders are pushed out seven to eight months.

The biggest factor driving these delays is the severe shortage of sub-contractors. After the epic residential building crash in 2009, many subs could not find work and found themselves in a new trade. It has been a slow process getting these professional framers, roofers, drywall and masonry contractors to construction sites to get homes completed.

Buyers thinking about purchasing a new home should be prepared to wait a full half year or
more for construction time. Buyers that do not want to endure this kind of build time, should consider a newer resale or seek a builder's spec home.

These are good problems to have actually, strong demand for housing helps keep resales moving in a positive direction and keeps tradesmen employed, all good :)

Friday, February 5, 2016

Super Bowl Weekend can be Super for House Hunters

America is celebrating its largest 'unofficial' holiday this weekend as Super Bowl 50 is upon us; yes the NFL is ditching the Roman numerals for this year's event. I guess Super Bowl L just doesn't look as cool as Super Bowl IXL (49) or LI (51). The big game is a large enough event that it will actually pull buyers out of the market for the weekend. This can be an opportunity for buyers to view homes and maybe get an offer in with less chance of multiple bidders. Now understand, viewing an occupied home on Sunday will be a challenge but vacant homes on Sunday or owner occupied units on Saturday should be easy.

Getting a "deal" on a house is nigh impossible when half the state is pounding on the same door with offer in hand and an escalation clause. This weekend could be the moment for savvy buyers to make their move.

Sellers should try and tie their listing to the game somehow. Hold an open house on Sunday morning early afternoon before kickoff or on Saturday with a Super Bowl special.

This is after all America, right? It's all about the angle. So whether you are rooting for the Broncos of Denver, Colorado or the Panthers from Charlotte, North Carolina real estate goes on. Enjoy the game and be sure to stay in the other game, the one involving your next house ;)