Friday, August 12, 2022

What does the Construction Boom, say about Real Estate?

Vancouver continues to enjoy a massive boom in construction. Much of the energy is focused on housing but there is significant commercial office and industrial activity as well. People are nervous about the state of the residential real estate market with rising rates and increasing inventory suggesting a slowdown is underway. So far what the market is doing is appreciating at a slower pace. There does not appear to be an actual reduction or recession in housing prices. The days of 20% annual growth appear to be gone with projections now at much more modest lower single digits. Housing demand in Clark County remains high and despite inventory levels starting to normalize we are still running tighter than average at around 1.5 to 2 months inventory.

Portland is in a bit of a flex spot right now as many people have decided enough is enough with the homelessness, filthy streets, and epic crime wave. But Portland still has a strong job market and that is attracting as many people as are leaving. Vancouver is the biggest beneficiary of Portland out-migration as our location immediately adjacent and our superior infrastructure is attractive. Vancouver Downtown is also the only real urban alternative to Portland for those wanting the walkable city lifestyle. The sheer number of major mid-rise and high-rise projects underway and in the pipeline are a testament to the strong desirability of a city style living opportunity outside of Portland. 

Urban Living in the Couv keeps a running list of major mid-rise and high-rise projects in the city in various stages of development from proposals to completion.

Projects nearing completion:

  • Kirkland Tower 12 stories, 40 condos. Waterfront
  • Indigo Hotel 8 Stories, 138 room Hotel. Waterfront
  • Aegis Phase One 6 & 5 stories each, 140 apartments. Downtown
  • Broadstone Claro 7 stories 180 apartments, Waterfront
Projects under construction:
  • Timberhouse 8 stories, 227 apartments. Waterfront
  • The Springs Living, 12 stories, 300 apartments. Waterfront
  • ZoomInfo Office towers, 10 & 9 stories. Terminal One
  • The Ledges, 6 & 7 stories 141 Condos and apartments, Columbia Palisades
  • Fourth Plain Commons, 6 stories, mixed use, Fourth Plain Village
  • Adera, 6 stories 180 apartments, Downtown
Projects in the pipeline:
  • Modera 14 stories, 285 apartments. Waterfront
  • Block 2 12 stories, 200 apartments. Waterfront
  • Block 1 10 Stories, office tower. Waterfront
  • 1500 Block, 7 stories, mixed use. Midtown
  • 13th & Broadway, 7 stories, apartments. Downtown
Most of the high density activity is focused Downtown and along the Waterfront. But there is substantial suburban development throughout the city and county as well. These urban projects represent at the very least $1 billion in local investment and that can float the economy through a mild recession. I remain mildly bullish on real estate in Clark County.

 

Friday, August 5, 2022

One Level Homes Still the Hottest

As more inventory creates a bit of maneuverability in the market buyers may find the single level homes are holding firm versus two story homes. Single level homes are common targets for two major buying demographics. The starter home buyer and the downsizing senior. This creates a little extra pressure on pricing for these homes versus a two story home that tends to be avoided by the latter group.

First time Buyers trying to get a bargain should look at smallish two level homes rather than similar sized one levels as it eliminates competition from the senior down-sizers. Although these smaller two level homes can sometimes feel a tad cramped on the main level they often offer a good utilization of space and leave a smaller foot print on the lot that either creates more yard space or allows for a smaller and thus less expensive lot. 

Seniors downsizing often have a large downpayment or are all cash and that gives them a bit of a bargaining edge with sellers. First timers should try to avoid directly competing for the same homes as downsizing seniors. 

Vancouver and Clark County has a large selection of smallish 1500-2000 SF two story homes that are seeing a softening in price right now. You can get a lot of house for less looking at split entry homes that are scattered all over the area.

That's the tip of the week.