Friday, December 24, 2021

Merry Christmas!


Taking this week off. Local winter storm warning is up so please be very careful this holiday weekend! Happy Holidays and best wishes for a great New Year!

Friday, December 17, 2021

Is there an Exodus out of Washington, Like California is Experiencing?

California has been exporting real estate refugees for decades now. States like Arizona, Nevada, Oregon, Idaho, Washington, and more recently Texas have been receiving people looking for opportunity or a better quality of life by the thousands. But is Washington State now slipping into the same pattern? Possibly; the data is suggesting that migration patterns are forming right here in Washington State that look a lot like what California's patterns were in the 1990s. 

In California as the major urban centers began to experience strong economic conditions with large employers paying top dollar for talent, the housing costs began to soar in places like Los Angeles, Orange County, San Francisco, and the Silicon Valley. Many people working in the middle class as tradespeople and service sector employees were priced out of the market and began migrating out to far flung suburbs to find affordable housing. Now the demand for those suburbs is so high these same middle class people are seeking out of state or out of the Bay Area opportunities in the above mentioned state and less expensive interior areas of California, like Sacramento and Fresno.

Here in the Evergreen State we have seen a similar situation in Seattle. If you look at Seattle, it looks eerily similar to the San Francisco Bay Area just a decade or two ago. Seattle long ago priced out the service sector and tradespeople who now tend to reside in these far flung suburbs, in Pierce County and Snohomish County. Many Seattleites are packing up and moving here to Vancouver as our high prices are still much lower than the Puget Sound region. The trend looks a lot like California did just a few years back.

But are Washingtonians leaving the state altogether? There is a demonstrably large number of Californians that have left the Golden State behind. Although the state has still seen minor growth that suggests some in-migration is happening as well, they did give up a house seat this past census. Is there a similar scenario here? We have to look at the types of real estate refugees to really find out. I think the answer is yes but on a smaller scale.

There are many reasons for real estate flight. Some people are leaving due to super inflated real estate values that severely reduces the quality of life. The Puget Sound region is definitely experiencing a California style long and slow commute for many middle class families. Here in Vancouver we have reasonable average commute compared to neighboring Portland and Seattle. But some still drive from Vancouver into Portland or even over to the west side for employers like Nike and Intel. That can become a real drag on lifestyle.

There are even political real estate refugees. Yes our divided country is getting so intolerant that some people choose to leave an area because they feel they are outvoted and don't like the direction things are going. This is not uniquely one direction. In fact blue voters are leaving red states and red voters are leaving blue states at relatively similar rates. 

But other than random job openings in far away places, most transplants tend to be seeking a better quality of life. That almost always comes down to affordability. Housing is just one part of the equation. You may remember I wrote a blog post a few months back about California counties compared to Clark County and most California Counties are LESS expensive for real estate than our county here. But in California even in a place where housing is affordable, everything else there is more money. Nearly EVERYTHING you buy comes at a premium in the Golden State. The cost of living index takes a variety of things into account and one will find Clark County Washington is not too far off the average for the whole country. There are places in California cheaper overall than Vancouver, WA but it is largely in areas that have lower housing costs. Housing is a big driver in this index and importantly, taxes and child care are not considered.

Take a look at this table National Average = 100:

  • Vancouver, WA         118
  • Seattle, WA.              167.8
  • Spokane, WA             98.6
  • Tacoma, WA              118
  • Kennewick, WA        98.3
  • Bellingham, WA       123.2
  • Portland, OR             132.4
  • Beaverton, OR          124.7
  • Gresham, OR            114.2
  • Salem, OR                102.4
  • Bend, OR                  131.3 
  • San Francisco, CA    244
  • San Jose, CA             215
  • Sacramento, CA        121.6
  • Fresno, CA                103.3
  • Los Angeles, CA       176.2
  • San Diego, CA          160.4
  • Redding, CA             107.8
  • Santa Rosa, CA         141.9
  • Riverside, CA            134.1
  • Las Vegas, NV.          111
  • Phoenix, AZ              108.7
  • Denver, CO                127.8
  • Salt Lake City, UT     122
  • Boise, ID                    116.5
  • Omaha, NE                 76.5
  • Des Moines, IA          78.7
  • Dallas, TX                  101
  • San Antonio, TX        89.8
Vancouver compares favorably to most places on the West Coast with Fresno, CA a notable exception. Have you ever been to Fresno? I'll pay more to live here... MUCH MORE.

I have noticed in my business a noticeable increase in people listing their homes and moving away for quality of life and/or politics. Sure that is anecdotal at best, but I am hearing this ring true with my colleagues across the area as well. I wouldn't say we have reached the California levels of exodus by any stretch, but Seattle has and Portland has. At this point for every person 'fleeing' Vancouver there are four or five more coming in from the Puget Sound or Portland.  Our housing prices here are lower than many other locations in the Pacific Northwest. We have a localized value proposition. But on housing compared to the national average we are nearly $100,000 higher. So for some, the grass seems greener in other pastures. We are however, looking solid for now.

Friday, December 10, 2021

The Darkest Six Weeks in Real Estate

That is a rather ominous title. It just sits there lurking about. Seems a bit scary. Don't worry it's all fine there is no impending demolition of the market or prognosis of doom and despair. But it can feel that way sometimes as we enter the six darkest weeks of the year. 

Unless you live in the tropical zone this is the time of year where the days are short and nights are long and cold. Here above the 45th parallel these next six weeks offer about 8 hours of daylight against 16 hours of night. The Pacific Northwest adds that whole cloudy thing to make it even darker. Those car headlights are on at 3pm and even the late sleepers like me, wake up in the dark.

So what the heck does that have to do with real estate? I'm glad you asked. This is time of year for sellers to leave the lights on. Not just the holiday lights but all the lights. Many people will view a listed house after work and that means after dark this time of year. Curb appeal still counts even in the dark. A brightly illuminated home will add a few bucks to your utility bill, but it may add thousands to your sales price. Turning them all on for a showing is fine and well, but many buyers these days will drive around looking at homes they see online. This is there pre-tour and the ones they like they ask their Realtor® to show. If they drive by your listed home and see a dark and uninviting place, they may just scratch it off the list. 

Under the cover of darkness and the typical winter landscape, the yard as the initial curb appeal feature is diminished. Sellers should be cautious about having an uninviting and dark front yard and home during the winter months in general. This is particularly important during the six weeks surrounding the winter solstice. Although the three weeks before the solstice have the advantage of holiday displays which are often well illuminated, the New Year typically brings an end to that. Consider adding some solar/battery walkway lights and even lights along the driveway. These can be very inexpensive and provide an inviting and cheery first impression for buyers viewing the home for the first time, especially when doing so when it is dark. That just so happens to be 2/3 of the day round this time of year. 

The seller's market here in Clark County continues, but it is not as one sided as it was a year or so back. Buyers are more picky, and multiple offers over asking are generally happening on homes that are well prepared for the market. These are the homes that get the big prices and the fast activity. The homes that are just listed as is and with little or no 'staging' may linger in the market and sell for less money.

Clark County now has a median home price in excess of $500,000. A five percent price reduction is $25,000. You can do a hell of a lot of staging for 1/5 that amount and it very well may add 3-5% to the final price of the home.

Dark and dreary is not a winning hand unless you are selling to vampires. Expanding your market beyond the bloodsuckers will yield great rewards ;)

Friday, December 3, 2021

December is Here and so are some Buyers

I have always said that December tends to be a little slower for buyers but the buyers that are around this time of year are SERIOUS! I recently met a new client through our companies relocation services. He has accepted a new position at a large local employer and is moving all the way from Florida. He has been very serious about this home purchase from day one. He isn't wasting anybody's time and certainly not his own. 

December is many things, the holidays, start of winter and miserable weather, end of year stuff, like getting taxes shored up, all that stuff. This is not a time that we typically see lollygagging tire kickers. People out in the hunt this time of year need to buy a house and right now!

Of course I have said much the same about sellers during the holidays. Who wants a bunch of strangers trampling through their house at Christmas-time? No one but sellers that have to sell to take a job elsewhere, or are in contract elsewhere need to sell. They are likely to look at a contingent offer or perhaps an offer slightly under asking if they are priced a little high.

I like the holidays for real estate. People tend to be more serious and focused on the tasks needed to complete real estate transaction. It can be a good time for both buyers and sellers and there is less competition because many people will postpone their listing or buying activities until after the New Year.

Seller's I can't say this enough, keep your drive way and/or walkway to the front door clean and clear of leaves, debris, and snow. Give that buyer every reason to feel good about the house before they open the front door. And buyers likewise, think of the house that doesn't keep things clean and clear as an opportunity for a sharper price, because some buyers may walk past it if curb appeal is low. Especially during the holidays when everyone is tight on time and often not in the mood for any adventures.

Happy Holidays and let's get all these homes sold shall we?