Vancouver and Clark County are definitely experiencing a solid and reasonable level of demand for housing, but that demand is not high enough to warrant the highly accelerated pricing growth. It is definitely a supply issue and sellers that want to move are holding off in many cases because they are concerned about finding a place to move after they sell.
Most of the listings I take are people moving out of the area or people already in contract to buy a house and they don't need to sell the current house to buy the new one. There are just not that many people in those situations to provide enough listings for even a moderate number of buyers. As if that alone were not enough. the new home market is bottlenecked with the same supply chain issues other industries are facing and they are running nearly a year out on construction.
A large part of resale home pricing is either tempered or bolstered by new home pricing. In an inflationary cycle the price pressure on new homes can be intense and sellers often get a coattails boost in resale value. We are certainly seeing that scenario play out right here at home.
We may see a softening in demand at least in the lower half of the market as interest rates rise and start eliminating buyers from qualifying. Right now the rising rates are effecting boosting demand a little as 'fence sitters' are jumping in to try and lock in a respectable rate. That will trail off dramatically over the next few months if rates continue the upward trend.
As I have mentioned over the years ad nauseam, rates are still low and any rate under 6% is a historically good rate. However the booming real estate market over the last five years has been largely boosted by historically low interest rates. People in lower middle income brackets that could not buy a home in the mid 2000's could buy one from 2011-2017 due largely to the after effects of the Great Recession. Home prices were super low and interest rates were in the basement as well. That combination produced record setting home sales for years. Now many of those who bought that $130,000 house in 2012 are sitting on a mountain of equity and that drives some to use it to upgrade.
I am mildly bullish on 2022 real estate but trending with the bear for 2023. We will see how it all plays out. Keep your eyes on the lending rates. I feel like the target rate for a slowdown in pricing is near 6% which will wipe out a lot of people with a household income under $100k.
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