The latest data form the MLS shows Clark County picking up inventory. Generally picking up inventory is a sign of a softening market, but earlier this year we set a record for the tightest inventory ever recorded when we were measuring inventory in days rather than months. That won't stop media types from predictions of doom and gloom.
In July 971 units were listed in Clark County and 669 units closed. Total inventory was 1262 units. So we had less than two months supply and that is still a seller's market. The trend is more expensive homes as the median sales price of $528,782 is eclipsed by the average sales price of $582,079
Median marketing time is sitting at a very comfortable 10 days with the average creeping up to 25 days both numbers are healthy. Interest rates definitely slowed things down as fewer people qualify at 5.5% than at 2.75%. Historically interest rates have averaged 6% over the last 50 plus years so we are still in a low interest rate cycle. Most of the apprehension is among younger people that have never seen home loan rates above 6% so this seems like high mortgage rates to them.
As things settle in and rate stabilize, hopefully in the less than 6% range housing should continue to grow and sales should remain consistent at 600-800 homes a month in Clark County. Barring a serious spike in rates we are looking solid for the next 12-18 months but growth in prices should not be nearly as aggressive. I would expect appreciation rates to settle into a more anemic 2-3% annualized. This is also healthy although a tad lower than the historical average. We just came off some record levels of appreciation though so a slight slow down makes sense.
Locally we may continue to see a rise in pricing at this slower rate but neighboring Portland could see a slight pricing slowdown as they are seeing a bit of an exodus out of the city. Portland pricing will either be flat or maybe see slight rise in values. They are sitting on just a little bit more inventory than Clark County with 2.3 months to our 1.9 months. Portland is also seeing strong activity over the median with an average sales price of $630,211 versus a much lower median price of $558,500. This large disparity between average and median can sometimes mask softening markets. The median price will continue to move up if the bulk of sales are in the high end but entry level prices could be flat or even dipping when the median is rising. That does not seem to be the case right now in either Portland or Vancouver/Clark County but it is something I am keeping a keen eye on.
The middle of the market is usually driven by the bottom as entry level homeowners take equity from their first house and make a move to the middle. The classic scenario selling a small 1250 SF 3 bed 2 bath starter house that the seller paid $300,000 for three years ago and now sells for $450,000. They take that nice chunk of equity and move into a $600,000 4 bedroom home with twice the space and their payment is only a little higher than it was before. A sharp increase in interest rates has made that classic scenario a little more challenging, but the numbers show the market is currently overcoming that challenge. A similar scenario plays out when the middle takes equity and moves to the high end of the market. Move up activity can significantly raise the local media even when actual prices are going down. Again, the number are not showing a dip in overall values, but they are masking the real appreciation which is likely in the low single digits when annualized.