Friday, October 30, 2020

Real Estate Market is Spooky for Buyers

Spooky because inventory under $500k is tight and competitive offers are lurking around every corner waiting to outbid the unsuspecting buyer. Boo! Buyers should relax however as the holiday season is ahead and that tends to soften things up a bit. Not that pricing is likely to soften but many buyers stop looking and that can take the edge off a bit allowing buyers and opportunity to get their offer accepted more readily.

Locally the median price of a home in Clark County has breeched the the $400k mark pushing up towards $410k. Analysts are suggested a fairly robust 6-8% growth over the next 12 months. Despite the crazy conditions for buyers real estate is still a strong proposition in Clark County so be patient buyers, your time will come :)

Friday, October 23, 2020

Will Vancouver Answer the Call?

The phone is ringing... opportunity is calling... will our fair city pick up? Vancouver has an amazing opportunity right now for both jobs and residents across the spectrum of suburbia and urbanites alike. Our neighbor to the south has been shedding people to the suburbs for several years and this year other issues are pushing residents out in droves. Meanwhile urbanites in Portland are now witnessing the rise of the Vancouver urban city scene and for the first time, maybe ever, they have an alternative to Portland's "big city" neighborhoods like the Pearl and South Waterfront.

Now let's be clear, Vancouver USA will not replace Portland as the center of the metro area anytime soon and probably not ever. But that city has really set itself up to attract a specific type of resident. Basically those looking for the walk, bike, and transit only lifestyle. Vancouver can appeal to some of those people but also to those that still want to at least own a vehicle and travel independently when they want to. Portland's lackluster effort on the city highways and freeways is a clear indicator that travel by car will not improve anytime soon.

Vancouver finds itself in a prime spot to attract both residents and employers looking for tax savings and a more traditional lifestyle for their workers should those workers choose. But they won't have to alienate the employees that want that sustainable walkable neighborhood. Vancouver has a downtown and waterfront area that still has usable land, and a council that is considered to be one of the easiest for developers to work with. A pro-business environment without sacrificing the common sense approach to a sustainable community.

Our city needs to go get em' so to speak. Developers and business leaders are sometimes operating in a bubble and if Vancouver USA is outside the bubble our local leaders may need to penetrate their market with advertising and committees designed to get the word out.

COVID-19 will pass and we will get back to a more normal pattern and our city needs to take advantage of our amazing setup to grab both residents and employers which help all of us enjoy a better lifestyle with a stronger economy and higher wages. 

For Portland they love having a workforce based in Vancouver, it helps pad their taxes with non-resident income. It is literally free money for them. But more and more Vancouver residents are seeking jobs on OUR side of the river as they grow weary of Oregon's egregious taxation without representation scheme. Furthermore Portland's tolling scheme is clearly aimed at Clark County commuters. Vancouver needs to hyper focus on employers, large employers that want their employees to have a great community to live in, with an easy commute, and low taxes. Vancouver is that community and we have the commercial, industrial and residential base to support whatever an employer needs.

Here's to a great 2021 and beyond.

Friday, October 16, 2020

Tower Cranes Mean Real Estate and Construction on the Move

Even under the drag of a worldwide pandemic, two more tower cranes have popped up on the Vancouver skyline. A couple of others came down this year so we are back to four cranes Downtown. Tower cranes have become rather symbolic of success. The types of projects that are erected underneath these behemoth towers are typically large scale, tall, and urban projects that cost tens of millions to construct.

These projects like other large scale developments produce hundreds of jobs and transform property values leading to more property tax revenue for the local government with out raising taxes on the whole. 

The City of Vancouver purchased the four city blocks formally occupied by the Lucky Lager Brewery Complex. The buildings were demolished and the blocks sat bare. No tax revenue was coming in because the city owned them. Now the first block became Heritage Place East and another adjacent block that had a few older single family homes became Heritage Place West. Lets say the value of that two block property went from roughly a million dollars in 1996 to around $25 million in 2000 when the project completed. The state and local government are now collecting property taxes on a fully developed area that is 25 times more valuable. Next was the Vancouver Center on the two blocks flanking the east side of the park. A much larger scale multi tower project went in there created and even larger tax boost. Now the final block the so called Block Ten has been sold for roughly $3 million to Holland Partner Group to be built out as a two tower mid-rise office and housing complex. The city will go from net zero to property taxes based on values that will almost certain exceed $50 million when complete.

Some people get upset when local government issue deferments on property taxes over a 8-10 year period, but the local government is playing the long game. Yes they will get less taxes early on, but still MORE taxes than they were getting prior to the development, then a HUGE boost when the incentives expire. That $3 million empty lot is about to become a $50+ million urban complex.  

All of this construction creates jobs, high paying skilled labor jobs! Most of that money stays in the local economy helping us all live better and more enriching lives. When you go Downtown, don't fret over the cranes, rejoice in the cranes, mega-investors are pouring money into our home, our
city, our economy. With the bludgeoning blows of COVID 19, we need all the investment we can get.

Friday, October 9, 2020

Title Surprises are Not Fun.

Sometimes surprises can really ruin your day. You never know when a rogue judgment will pop up outta nowhere to slow down a closing. Sellers need to be sure to vet this out early and preferably before an offer is accepted. In the case of a death in the family it can be challenging to get this done, especially if it is the final settlement of an estate.

Judgements are something that can lurk in the shadows only to emerge on a preliminary title report. Judgements do not just follow the person named in the court documents but often are recorded against real property owned or co-owned by the defendant. 

Judgments tend to stay around for 10 years or so and they can be difficult to remove even if the person is deceased or has settled the judgment in a bankruptcy. 

Buyers should be prepared for potential delays when buying a home that is being sold on behalf of an estate. In the end the attorneys and title company will likely work it all out, but it might take a week or two longer and that can be challenging for buyers. 

I have seen a few crazy deal in my day and judgements and lack of probate on estates are among the most troublesome. Buyers should not be discouraged when bidding on an estate sale, but just give your self enough time to compensate for any slowdowns during the closing process.

Friday, October 2, 2020

Market Remains Hot, Schools Still Major Driver

I have found myself working with some buyers in that aggressively pro-seller price range right around $400-500k and even in the $350k range. The market dynamics are very different in the higher ranges leaning slightly in favor of sellers but the market will not tolerate an overpriced listing in the $500k plus price range. Once buyers start peering though the windows of homes under half a million dollars sellers are demanding the sky and yielding little on terms and price.

Let there be no doubt record low interest rates are driving buyers to the market, especially those at or near the bottom price ranges. This is it, if rates pop up a bit or prices continue to soar the entry level buyers will be left holding an empty bag.

Schools continue to be a major market driver, but buyers with school age children should do more than casual research on schools before plunging into a hyper inflated locale based solely on local reputation. Great Schools an Niche Schools both offer fairly in depth looks at district wide ratings as well as individual school performance. 

One thing to consider when looking at an area such as Camas, WA which has a local median home price of roughly $525k. Camas Schools are well regarded on most if not all school monitoring sites, and well regarded in the local community as well. However there are two important things a home buyer may want to consider. First, there are two other school districts nearby that may be rated slightly lower but it is in some cases the difference between an "A" and an "A-" or "B+". Second Camas happens to have the highest property taxes in the area and that is an additional homeowner burden.

Comparing 98607, Camas to say 98683 which is the Cascade Park and Fishers Landing area of East Vancouver you will find that each area is served by excellent schools. 98607 is A rated by Niche Schools and 98683 is B+. The median home price in 98683 runs about $415k a full $110,000 less and the property tax millage rate is about 30 basis points lower in 98683 as well. The savings on the home could pay for two kids to spend 5 years each in a private school. 

I bring this up only because I have watched people frankly overpay for a property in a specific school zone when other much better values existed in areas with near equal school performance and in some cases BETTER ratings. Buyers should do serious research into schools before spending tens of thousands of dollars extra for a house because it is in the school district everyone around the water cooler says is best. This is of particular importance when the budget is tight.

I have written about schools many times, and one thing that Washington State can hang its hat on, is our strong and powerful constitutional language protecting schools. Even the "worst" schools in Washington are often better than the best schools in many other states. 

One final note about schools. When looking at school ratings one should use a few tips to regulate the emotion. Remember that many apps use at least some local reviews and that the "yelp" effect can skew the results. A few angry people venting over a nothing burger should carry little weight. Also individual test scores at a specific campus are not as big a factor in the overall quality of education as looking district wide. If the same school district has two elementary schools one is rated a "2" and the other a "9" there is much more to that story than one is crappy the other is great. School districts tend to employ district wide curriculum and teacher standards including student teacher ratios. There are apps that rate entire districts and that is just as important and maybe even more important than the specific campus results.

How could the same district have such different outcomes? Well this does in fact happen and it is often due to the demographics in the local area. Some areas may serve a lot of professionals others may serve a large factory with high paying vocational jobs. Different demographic groups have different views on education. Also the schools will ebb and tide as the local family population moves through various cycles and campus populations fluctuate accordingly. Today's overcrowded high school could be just right in a few years as the neighborhood evolves. 

The district ultimately provides an opportunity for all students to succeed be they college bound, vocational students, or athletes. The policies and quality of the district are at the very least equal weight to individual campus performance.