Friday, January 5, 2024

Happy New Year: Market Outlook for Clark County, WA

It seems like mortgage interest rates are stabilizing in the 6.5-7.5% range with credit and other lending qualifications delineating to upper and lower ranges. Historically mid 6's have been very healthy for the real estate market. 

The real estate market has been rather slow with both supply and demand being weak. Prices remain stable without any significant changes some markets a little up others a little down. If interest rates continue to be stable and maybe even dip a little bit more leading into he spring, we may very well see an uptick in demand. Supply however will likely remain tight as we still have thousands of homeowners sitting on their 3% mortgages. It may take four or five years before we start to see the turnover from all the first time buyers that bought in the last two years at 5-7% start making their move up.

Meanwhile our local economy continues to produce high paying jobs that are attracting people to the area. If that trend continues we very well could see an uptick in demand from that. Locally Clark County is still seeing significant demand for homes coming from Portland transplants. According to the Oregon Government, Portland has lost roughly 30,000 people since the 2020 census. Washington and Clackamas counties have seen little or no growth in that same period whereas Clark County has seen an increase of some 30,000 people since the 2020 census.

This means that we could see a drop in Portland home values and an increase in Vancouver over the next few years. Over the last few decades Multnomah County housing prices have tended to be a little higher than Clark County, but they have been inverted at least once in the last 25 years. I believe that may happen again if Portland leaders can't stop the proverbial bleeding south of the Columbia.

Another potential issue for Clark County that favors existing homeowners but could be detrimental to renter is the potential for a slowdown in new construction. I believe Vancouver will continue pushing high density apartment projects that ultimately will result in lower rents for entry level and mid level apartments. But single family homes and condos could very well see spikes in value in builder slow down on the construction of new homes. 

The overall outlook for the local real estate market is for a small uptick of activity in the first half of 2024. The second half is a crap shoot at this point. 

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