Are Lower rates Helping the Local Market?

Mortgage rates have seen a slight drop and low to mid sixes are available to highly qualified borrowers. With a little help from the seller, rates in the 5s are easily attainable. One might expect some favorable movement as a result. So has it helped?

That's tough to quantify at this point. I am seeing an uptick in buyer activity, but we are also seeing an uptick in new listings. If both of those metric continue to rise it will keep the relative market stable. It will be good for agents of course as transactions will go up :) But for buyers and sellers the balance of inventory to buyers needs to change for there to be any movement in values. 

At this point our market remains a little soft on price and enough inventory to keep the buyers busy. technically our inventory levels still slightly favor sellers but certain sub-markets and neighborhoods may be hotter than others. 

A savvy buyer should open up the neighborhood range to capitalize on deals that may appear due to more seller activity. Neighborhood turnover can be a sign of trouble, but sometimes it's just a sign of normal turnover. Neighborhoods that were built 10-15 years ago in desirable school districts may now have a lot of empty nesters moving out, not because of any trouble but just the normal retirement move. That can work in the favor of buyers.

Buyers should always do their own due diligence and check things out, check with an agent about the area before making an offer. Things are looking up overall after a couple almost stagnant years. 

Home Prices Rise Despite Less Demand, What Gives?

One of the biggest drivers in price is in fact supply and demand. But the cost of building new homes is going up mostly due to government over regulation. Builders continue to face new laws forcing compliance with various environmental, local infrastructure, and safety that all seem great but absolutely increase the price of construction. Many builders are pulling out of over regulated areas like the three West Coast states. Despite having fewer buyers in the market place, there is also fewer new homes and this drives the price up on the remaining available resale homes. 

The median home price in Clark County currently sits about $550,000 depending on the source of data. That median price buys a pretty solid house, such as a 30 year old two story 4 bedroom house with 2000 SF or a really nice 30 year old ranch house with 1700 SF. New homes similar to these on any kind of decent sized lot are at least $100k more.   

Younger people struggle to afford to buy homes largely based on social tendencies more than actual costs. Homes have appreciated at significantly more than inflation in general over the last 40 years and many YouTubers point this out. But I was a 20 something in the 1980s and can assure you that buying a house back then was more difficult that it is today. Interest rates in the 1980s started out at 18% and dropped into the 11's by the end of the decade. That's a huge hurdle. But the 1980s had much higher costs on most things we buy today. Where the modern homebuyer faces higher education costs, higher healthcare costs, but lower costs on gasoline, utilities, food, electronics, and appliances. We did just come off a high inflation period that has brought some of these "lower" costs to parity with the 1980s but we also are seeing pretty strong wage increases in recent years that match it.

The general gist here is to stop complaining about how hard it is to buy a home, it has ALWAYS been hard to buy a home. I see people complaining about their inability to afford a home and then realize they have a brand new $1000 phone, a brand new car with $500 payment, they are drinking 4-5 energy drinks every day at $2-$5 a piece! They are wondering where all the money goes? 

Buying a house has always required some difficult penny-pinching and that still holds true today. I help young people all the time to get into a house, It is rarely easy unless that young person managed to find a six-figure job, but it isn't as hard as the internet is telling you.

Fed Hints at Reduction for Next Month

There has been tremendous pressure for some easing by the Fed. The Trump Administration has been very vocal about getting some relief on rates. The economy is not the roaring lion it was several years ago when the Fed made some aggressive moves to tighten the money supply. 

I have not been as concerned about Home Mortgages as I have been about the availability of financing for big projects that help boost the local economy. Sure a little softening for my typical home buyers will be greeted with a grin, but more importantly is opening up capital for larger commercial and residential projects that seemed otherwise be stalled waiting for funding. 

Vancouver's Downtown and Waterfront have several very large projects that have made it through all the preliminary approvals for design and zoning. These projects will be valued in excess of $500 million which is a direct injection into the local construction trades and tax coffers for the city. 

The Fed meets next month and there has been some suggestion that a rate drop is likely coming. Should we see some easing we could see mortgage rates dip a little as well. Rates tend to be running in the mid 6's for quality borrowers and a dip to the lower 6s will have a positive impact on the local real estate market. 

Sales volume has been light over the last 24 months and we are seeing a stead increase in inventory as well. Buyers are actually in strong positions right now aside from qualifying. We a reduction in rates the number of qualified buyers will increase and could very well jump start the sluggish sales numbers.

Here's to a solid 4th quarter!

Fed Stays Put on Rates

(Also published on "Retire to Washington State")

The Feds met at the end of July and decided again to stand with the current rate. This annoyed the President, but I am feel like they did the right thing. That runs counter to my own financial prospects as a slight dip in rates could put energy into the real estate market that would directly benefit me personally. But the federal government continues to spend money like drunken sailors and it hasn't;t mattered whether it was the R's or the D's neither can seem to really cut spending. All we get are clever accounting tricks rather than real cuts. 

When the government prints money it tends to artificially inflate the economy in a somewhat unnatural way. The economy is not as hot as the President says it is, but it is not slow enough to justify rate cuts at this time. That is a bit of the ironic part of the desire for lower rates while claiming the economy is hot. You don't get lower rates in a hot economy in a normal universe. 

The rolling 54 year average for mortgage rates sits at 7.71% according to Freddie Mac, the leading tracker of mortgage rates. We are well below that average right now at about 6.8% Even if we do a rolling 30 year year average to get the 1980s high rates out of the equation we still are close to average right now. It has been a difficult transition for younger home buyers that never saw rates this high during their adult lives. But it is a bit more psychological than economical at this point. 

The economy is good right now, not great, not terrible just OK, and perhaps the Fed is on the right track. Having a slight downward adjustment would have been nice as a gesture to get housing back on track, but I do not expect the Fed to make any substantial adjustments. When the current chairman's term is up next year, I would not be surprised to see him replaced. That new chairperson might decide to bend to the President's will and cut rates a bit. That would likely happen mid-2026. If the economy starts to stagnate before that, the current Chair, Jerome Powell might adjust rates toward on his own terms.

Buyers looking to buy in this market will find willing sellers. The best "deals" are on larger two story homes that are mostly owned by aging boomers looking to downsize and get rid of the stairs. Younger buyers can get a lot of house, like a 2500 SF 4 or 5 bedroom home 20-30 years old at $600-$700k. The price per foot on these now unpopular styles of homes is only $240-$260 per foot. Compare that to the typical 1250 SF ranch house that fetches $450k and a whopping $360 per foot. Saavy young people can rent rooms out in the large house to offset the mortgage. Yes you have to qualify in the first place, but you can go in halfsies with someone if need be. There is risk in these arrangements but it could get you in the housing door where you might not otherwise be able to be. 

Peek you head up over the box lid and look around, there are some opportunities out there for clever buyers.

The Market Just Needs a Tiny Little Push

The real estate market just needs a nudge to get things rolling again. The market feels stagnant, not a crisis but just mulling about like grounded child pacing his room. Interest rates don't need to fall much, just a half point to actual rate and things would perk up nicely. But if rates must remain where they are, which may be the case since the recent Fed decision to hold suggests they will. Other market nudges could be an improved job market, local downward pricing pressure, or perhaps some of those folks hanging on to a 3% rate retire and downsize.  

The market does not need a major stimulus. The federal government could also improve the mortgage deduction to make it a bit easier. Getting homeownership back up and on track will also result in lower rents as rental pressure will shrink. 

In the mean time both buyers and sellers are experiencing near neutral conditions. Well priced homes will sell in about 30-45 days, Below market prices will bring multiple offers, and overpriced listings will sit for months and months. Listing agents need to actually do some marketing in these conditions. Some do some don't so prospective sellers will need to ask direct questions of their potential listing agent.

Buyers should keep in mind that rates are not likely to see much relief other than standard fluctuations as the federal government continues its drunken spending binge that keeps pressure on the Fed to keep things on the proverbial leash. 

Let's hope we see that nudge soon. 

Is the sky falling?

Real estate has slowed to a crawl in some sectors and many people are hesitant to buy or sell in this weird market. I have beaten to death the idea of stubborn homeowners holding on to their 3% loans, I am among them actually. But buyers continue with trepidation. Rates seem high, they are not, but it sure feels like it and buyers are faced with very high prices all over the nation relative to what they were ten years ago and relative to current wages. There is also a lot of negative commentary and videos about how difficult it is for young people to buy a home. I feel that that is way overplayed in politics and on YouTube. 

I just sold a home to a young man who qualified with his own income. He saved up substantial cash to put down by avoiding the trap many young people fall into. The buy a new car, buy cool stuff you can't really afford, and then complain about houses costing too much. He does not have a college degree nor does he have an exotic job. He works in a local factory. He saved some cash drove an older inexpensive car and bought a house in one of America's most expensive housing markets.  

Let's be clear this young man SAVED the money. He did not inherit the money nor get cash from his parents. He did it the way his parents and grandparents did it, by not wasting all their money on stuff they can't afford. He did it the Dave Ramsey way for the most part.

So the sky only seems like it is falling because talking heads on the internet say it is so. The sky my friends is just fine, houses were really easy to buy for about 8-10 years after the Great Recession and now they are back to the way they have always been, hard to get but easily attainable, even in Washington State which has the fourth highest home prices in the USA.

Save your money, keep your credit scores up, and avoid spending hundreds of thousands of dollars on an education that will not net you a deep six figure job. If you are not smart enough or dedicated enough to get a STEM degree, take up a trade, they pay better in the trades these days than most undergrads make anyway. Over the coming decades wages in the trades will continue to outpace salaries in the white collar world, this has been the trend for over a decade.

Our country needs electricians, plumbers, framers, iron workers, welders, and many other tradespeople. The best part is, most of the time you can apprentice these jobs. This is being paid to learn rather than paying to learn. 

Homes have always been difficult to own with a few exceptions throughout the last 100 years. They are however very attainable. 

Happy Independence Day

I think I'll take the day off and soak up the celebration. There are things likely to change in the next few weeks or months as the passage of the "Big Beautiful Bill" will have ramifications for the market. It remains to be seen whether it will be a net positive or net negative on housing.

I'll see you back here next Friday. enjoy the holiday weekend.

Friday the 13th... Boo! Prices are softening.

MLS Listed Home 4/2024 C. Rod Sager 2024

It's a spooky Friday the 13th for real estate. Our markets are in a soft slide which means sellers need to price their homes well. There is no tolerance in the market for overpriced listings. Seller's should price their homes in the bottom half of the comp range. There is a thing called "chasing the market down" and it is a real thing. Pricing high and waiting for the "ideal buyer" is an effective play when the market is rising, but it can end in catastrophe in a declining market. No one shows up and you lower the price, but by the time you respond to the market you are still too high. Buyers are looking for value more than ever before and in the entry level market there are value opportunities everywhere. Well priced homes are often seeing multiple offers, so the buyers are out there, but they are not offering on overpriced listings. 

I believe we are going to coast to a gentle landing as the market adjusts to a more normal interest rate range. We just came off one of the longest periods of below average rates in decades and it takes a while for the market to compensate for it. Keep in mind that certain homes will always have the upper hand in the market place. Modern homes or older homes that have been updated to modern styles and themes in good condition will always sell first over unusual layouts or non-conforming builds. No matter how nice a place is, people tend to gravitate towards tradition floor plans with good flow and an updated look. 

Having good curb appeal is a great idea in any market and as things tighten up for sellers curb appeal gets more and more important. You generally want the first three impressions of the house to be positive. Curb appeal, the front porch, and the first rooms visible upon entry should all be as perfect as possible. If a buyer gets three good impressions right off the bat, they will be naturally inclined to accept other negatives about the house. The adage of Kitchens and Bathrooms should be the first upgrades and look as good as possible also holds true.

I do not want to sound the alarms of a doomed market. That is not where we are at all. There is currently about three months of inventory and that still is considered a mild seller's market. But inventory levels have been rising all year long and we could see dead neutral conditions by autumn. Keep your property clean and tidy, make it shine as best you can while showing, and price it in the bottom half of the comp range. You will sell it in 30-45 days at or near full price. 

Are we in a market slide?

The query in the title of this article is a wiggly mess of answers depending on who you ask. Overall I would say we are in a slide in several key sub-markets. I mentioned that Portland's glut of city condos, particularly in the South Waterfront are pushing prices down on Vancouver's entry level and mid-tier condos Downtown. 

The entry level has been plagued with a lack of qualified buyers in the market. Up till recently, perhaps the last 12 months, inventory was tight enough that the lack of buyers was not causing any real downward pressure on prices int he entry level. But alas, now we have more than 3 months inventory, which is by no means considered allot of inventory, but it is way more than we have had and now the lack of buyers is noticeable.  

The other weird aspect of our current market is in the process of correcting itself, but we have been in a slightly declining market but the median home price has continued to rise. I alluded to this in previous posts, the entry level has been slow but the mid-tier has been busy. Prices have been falling on home in the sub $600k market due mostly to that lack of qualified buyers. Meanwhile houses in the middle tier from $700k-$1.2m have been selling well and that has pushed the median price up rather than down. Prices have been coming down across the board but we are simply selling more of the expensive houses relative to the entry level and that creates a literal mirage that prices are rising. They are not.

This market has been fairly flat with prices in a slight decline. Sellers have to be careful here. If a house has been on the market for 90 days with no offers, the first offer could be the best offer. I would say it is more likely the best offer than not. 

Clark County has been the Portland-Vancouver metro area's only strong growth county for several years now. We have been riding a wave of Portland migration that is now starting to slow a bit. We are also seeing more out-migration than has been typical. Some are fleeing our expensive home market, others are leaving the State of Washington for political reasons. Washington has always been a blue state but it has seen a drastic change in the recent ten years seemingly mimicking California. Washington has become a wet version of California, that may be pushing some of the moderate and conservative people out. This could explain the increase in inventory running against the trend of sitting on those 3% mortgages.   

Our current Governor seems to be determined to destroy the Washington tech economy as well as the broad economy. This is not a blue-state vs red-state issue. It is a California issue. Emulating a failed state is a bad idea whether that state is red or blue. We seem hell-bent on chasing the "golden" state over the edge and into the abyss. I am not here to advocate for any one political world view, quite the contrary actually, but politics has been a driver of real estate as voters sometimes vote with their feet, we have seen it in California and now it could be happening here.

Hopefully the legislators in Olympia will see the cliff, and steer us back to the good ole Washington we all know and love. If our state starts to see an exodus like California and Oregon have seen, we could be headed for a market correction.

Strange Market Conditions, Middle and High End outpacing Entry Level

Our local market conditions over the last two years has clearly and concisely shown an increase in the median home price for Clark County. However the entry level market has slowed down substantially. A house that would easily sell for $500k two years ago now sits on the market for several months or the inpatient owner lowers the price. Meanwhile the middle and top of the price range remains hot largely due to a lack of inventory and increased demand from migrating Portlanders, and some Californians. 

I have beat this to death over the last couple years, but the reality is the middle and high end market loves the fact that they are sitting on a 3% mortgage and they just don't want to sell. People that have $700k or more to spend will outbid others to get the house in the upper end low inventory scenario we see now.

This is the weird state of affairs where the top half of the price range is in higher demand than the bottom. This is rare probably less than 10% of the time. I believe we are about to shift away from this trend as wages have crept up a bit and entry level buyers are returning to the market. For now, the top half rules the roost and it won't last long so those of you sitting on a house worth more than $600k, now could be the time to sell. There is a ceiling on how high end, super lux properties are still going to sit awhile since people with more than $2 million to spend remain few and far between.

Another anomaly in the local market is condominiums. The local condo market is getting negative pressure from across the river in Portland. This is particularly strong in the city center of Vancouver. Portland's South Waterfront and to a lesser degree the Pearl District is seeing a virtual glut of urban condos and prices have fallen sharply in the entry level Sub $400k range. This has made the now very popular Downtown Vancouver a more expensive alternative, whereas we used to be the value leader in city condos.

This soft entry level market will almost certainly, barring a major economic downturn, turnaround and return as the driving force of the housing market. Any first time homebuyers that qualify for $400-$500k should saddle up and go get a house before we return to a busy low end. It is already showing signs of recovering.

Strange market anomalies are often the best time to act, not always, but often, I believe for entry level buyers in the sub $500k range and upper end seller's between $700k-$1.5m, now is the time.

  

Homes Don't Appreciate, Land Does.

Yes you read that right, homes do not appreciate, in fact they depreciate. Many of you may already be thinking, this guy put whiskey in his coffee this morning ;) No just good ole black coffee today friends. A house is a physical structure and physical structures depreciate for various reasons. Of course the primary source of depreciation is wear and tear. But homes also lose value as they become outdated either in fashion or practical use. This is why a 50 year old house in very good condition but not updated will fetch far less than the exact same house that has had the windows upgraded, the kitchen remodeled, and modernized, etc. This upgraded house did not appreciate it was brought up in value by spending money on it. Appreciation is when the value rises due to external factors mostly involving demand. 

Land does not depreciate, it does not "wear out" and in general it never goes out of style. Its value can rise and fall with external factors such as demand or damage such as environmental damage or neighborhood decay. The thing that pushes home values higher is demand for housing but older homes will not appreciate as fast in general as newer homes because the older homes become less desirable as they often have minor to major functionality issues, designs that are no longer popular, and they are more likely to need major repairs than a newer home. This makes them generally less attractive to buyers. 

Sometimes a trend happens that makes a certain era of homes desirable again. A few decades ago it was all the rage to take Victorian style homes and fix them up into gorgeous homes. More recently there was a hipster movement to buy up mid-century homes and fix them up. Mid-century homes were among the least "sexy" designs ever, but they were practical and functional. 

As an example I will use my own home that I bought 23 years ago. My house was 10 years old at the time and priced about 10% less than a similar brand new home in the area. My house was basically all original when I bought it. Today it is about 25% less than a comparable brand new home. It's now 33 years old. I have spent tens of thousands of dollars modernizing it with sleek wood flooring, fresh paint, new roof, new furnace, updated kitchen, and baths, etc. But all that money hasn't really let me keep up with values of newer homes because the floor plan and layout reek of early 90s. I have 8 foot ceilings and there really isn't a cure for that. Now in all fairness I can sell this house today for more than three times what I paid for it back in 2002. I have no complaints, but I did spend at least $150,000 on keeping it updated over the years. Had I just left it all original but also kept it in good shape, I would be at a 40% disadvantage versus a similar brand new house. If I had let it go and it needed expensive repairs, then I would be at least 50% under the value of a comparable new home. 

What does all this mean? Well the land underneath my home has appreciated dramatically but my actual house has depreciated drastically despite my best efforts. The moral of the story here is to keep your home in good shape even if you can't afford to modernize it, take good care of it. When looking to buy, pay attention to the neighborhood, try to buy in the best looking neighborhood you can afford, but go ahead and buy the worst house in the best neighborhood. Neighborhood degradation reduces demand and inhibits overall property appreciation. Neighborhood is way more important than the house itself when it comes to property values and potential appreciation. 23 years ago my wife and I had our eyes on a lovely home in a neighborhood nearby. It was built in 1999 and was at the time very sleek and modern. It was a little better house than the house we have now but the same size and bed bath count. It was just a tad bit more expensive, but was situated on a much smaller lot. We ended up buying our house because I felt the neighborhood would hold up over time better. The neighborhood for the first house was fairly new, but it was cramped with narrow streets and small lots. The house I bought had wide streets and larger lots. Both neighborhoods seemed comparable at the time. As the decades rolled by the my neighborhood remains more or less the same whereas the other neighborhood became filled with rentals, and clutter and basically fell apart. My house would almost certainly sell for more today than that house would, had I chose it. I likely would have moved out of the neighborhood 10-15 years ago. 

In general if you want a "deal" on a house you generally want to buy an older home in good shape with outdated decor in a nice neighborhood, as nice as you can. If the neighborhood is older and yet still nice, that is often better than a brand new neighborhood that already feels crowded. The older neighborhood has weathered the storms of turnover and maintained itself, whereas the newer neighborhood can be a gamble unless it is strongly regulated by an HOA or it's a very expensive neighborhood. As a 25+ year veteran agent I have become very good at detecting neighborhoods with a high chance of stability or instability. This is a critical factor for long term success in your chosen home.

Remember as the house ages it loses value, the land is what drives the appreciation and that is mostly driven by local demand. Local demand can be external to the city itself, but also internal as a desirable neighborhood or area of town. Desirable areas can fluctuate over time but some neighborhoods are always popular. These are ideal spots to own for an extended period of time. 

 

Washington State Tinkering with Rent Control

The state has decided to intervene in the high cost of rental units in Washington. As is typical with these types of legislative bills, the results are nearly always worse. Rent control invariably leads to investors bailing out of the local market often selling off assets. The short term effect is usually a slower rate of rent increases but the longer term result is a lack of inventory. 

The state has been the largest culprit in rising costs due to the ever increasing mandates for waste water control, green efficiency, and local infrastructure improvements that rapidly raise the construction costs of new units. The entire West Coast has been caught in this trap. Yes we all want greener projects, and better environmental outcomes, but that comes at a cost and that higher cost results in exclusive rents that are out of reach of lower income and even middle income families.

If the state actually cared about this subject, which I fear they do not, they would allow low income properties to be built with waivers for many of the strict regulations and government development fees. That could provide thousands upon thousands of new units aimed at lower income families. The state however is not interested in waiving these development fees because if we are really honest, it's a cash cow for Olympia, Salem, and Sacramento.

In all fairness, many of these development costs are imposed at the local level. Cities and Counties rake developers over the proverbial coals with excessive fees that all get passed on to the buyers and or renters of these properties. The legislature could certainly pass a law that requires local governments to provide discounts or waivers for projects that will provide low income access to real estate in the form of sub-market rents or regulated sub-market pricing for purchase.

Whether you are on the left or the right, affordable housing is probably something you have some concerns about. Let your legislature know, that rent control has failed nearly every time it's been tried and they need to DO BETTER.

Rates a tick better, buyers starting to come back, listings are up as well.

After a solid year of adding inventory to what was a ridiculously tight inventory, we now have a healthy 3-4 months of inventory. I was getting a little nervous as the inventory was rising and new buyers did not seem to be coming to the plate. Well anecdotally for me that seems to be changing as well. It seems the slight improvement on rates and seller's willingness to help buyers with loan costs and buy downs, has brought weary home shoppers back to the playing field.

Activity is up on all fronts which is welcome news for us Realtors® since we have not been as busy this year so far as we expected. For buyers the interest rates at 7% were causing problems in our expensive local market. 

Here is the basic difference between 7% and 5% interest on a median range home in Clark County, WA. A $500,000 house using an FHA loan at 7% with typical closing costs and taxes produces a payment of $3937 per month. This requires under most underwriting guidelines at least $8000 per month in income and that presumes there are no other debts held by the buyer. $8000 a month works out to 96k a year. Drop that rate down to 5% and the corresponding payment drops to $3225 per month. This lower payment requires an income of at least $6500 to qualify, again without any other debt service. This is $78k a year. This means a single person with a better than average job can buy at 5% but needs a partner with income to buy the same house at 7%. This rate differential also allows the buyer with $95k income to still qualify even with a few other debts like a car payment.

Since the slow down in sales has been largely due to the abrupt rise in rates eliminating many qualified buyers, it stands to reason that sellers can entice these formerly qualified buyers with a rate buy down. Having seller's offer a closing credit is nothing new. It seems however that buying the rate dow is more important than standard closing costs.  

Rates have settled into the mid 6s for many buyers and depending on the day $10,000 in buy down moves that rate into the low 5s. This is a game changer for first time home buyers and could also be reason enough to get someone that is currently in a low interest loan to sell and either upsize of downsize. Many people are holding off listing their home due to the fact that they hold a low interest mortgage and do not want to lose that comfortable payment. With the recent rate drops and the notion of a buy down, the difference between the low rates of a few years ago and the attainable rates today is much closer and may make the difference for homeowners ready to move either up or down.

If you are a buyer consider asking your agent about writing offers with a seller buy down to help qualify in our expensive real estate market.

Condo market is slowing down a bit

A large part of my business model in Clark County real estate, is dedicated to urban condos in the city center and along the columbia river. These condos are in mostly high density developments with mid-rise and high-rise buildings. Of course this is a niché market in Vancouver and so the larger portion of my business comes from more 'traditional' real estate such as single family homes and townhouses.

That stated, the city condo market is slow right now. It is usually a little bit slower than the single family home market anyway, but right now it is disproportionately slower. Some say it is all about a more cautious economy what with new tariffs and trade tensions rattling the stock market, but I think it is something else all together.

I think by now most of you are aware the City of Portland underwent a roughly five year period of negative population growth. Much of that growth came at the expense of Portland's greater Downtown area such as the Pearl District and the South Waterfront. Vancouver's city condo market has always held a price advantage over Portland. This is most likely due to the fact that Portland is a larger city and many people that choose to live in mid-rise and high-rise urban condos do so to be walking distance from the core urban attractions. Portland has and still does hold an advantage over Vancouver in this regard.

Vancouver has greatly enhanced the urban living experience in our city core. In fact I rate it superior to the South Waterfront but lagging a tad behind The Pearl when measuring urban living metrics only. Well, the market over the last few years has agreed with me. The South Waterfront has an enormous glut of condominium units. The Pearl also is a little bloated with inventory but not as severe as the South Waterfront. 

The large exodus out of Portland could be blamed at least in part by the excessive amount of aggressive homeless on the streets and the violent demonstrations that got completely out of hand from 2019-2022. In 2023 Portland's Downtown looked like a landfill, trash everywhere, homeless tents lined up all over the place and a violent crime rate that broke every record in the history of the city. 

The residents of Portland made a major change at the ballot box in 2024. This was not just a taking out the trash of politicians, this was a complete overhaul of the government structure. I already see positive change in Portland's city center. It will take years to get Portland back to the 2010 levels of "cool" that it enjoyed and twice as long to get the reputation repaired, but it seems they are on their way.

I have a client that lives in the South Waterfront who wants to move over to Downtown Vancouver but is disappointed in the price variance. The South Waterfront is way cheaper! I suspect the Pearl will be the first condo market in Portland to shore up as it has many advantages over the South Waterfront. The latter is difficult to get in and out of, has more limited public transit than the Pearl as well as less in the way of amenities.

Vancouver still has many advantages to either the South Waterfront or the Pearl District. We enjoy a superior tax profile and a much better traffic situation as far as getting away by car. We are just as close to PDX as anyone in the Portland urban core, and our waterfront is arguably the best in the region. Downtown Vancouver is also much more navigable than Portland with its offset grid that creates terrible diagonal intersections. The bridge and freeway ramps are awkward, only the locals can remember where they are so the city is filled with 'out of towners' getting lost.  

Even as Portland works to bring back people to the city center, Vancouver will still hold some advantages as well as some disadvantages, but right now for the entry level city condo crowd we are priced too high. At the high end $750k and up, we look good against our competitors south of the Columbia.    

Vancouver May Finally Finish Her Annexations

Vancouver is way behind on annexing large swaths of urban density unincorporated neighborhoods. It seems the council is seriously considering a one time "go big or go home" approach that would swallow the entire urban growth boundary. 

I am actually in favor. The State of Washington in 1990 passed legislation aimed at doing just what Vancouver may do now. Many years ago Mayor Pollard attempted to complete the Orchards annexation and ended up in a duel to the death with the County. The whole thing stalled out. Since then Vancouver has been taking little bites out of the large UGB slowly and well behind schedule. 

The council is looking at four options the last of which is aunt just nibbling away like they have for the last 20 years. The other three are big chunk acquisitions, one adding 75,000 residents to the city, another adding 95,000 residents to the city, the third and my personal favorite the full enchilada, the entire UGB adding 171,000 resident to the city.

Keep in ming the City isn't growing new residents, they are in fact already here simply outside the city boundary. It is essentially a jurisdiction change. Cities are much better suited to managing urban areas and counties are really supposed to run the rural areas. The Vancouver UGB is no longer rural, it is mostly suburban housing areas with a few commercial sections.

If they select option three, and they should do just that, the city would officially have 380,000 people placing it ahead of well known "big cities" like, Pittsburgh PA, Cincinnati OH, New Orleans LA, Cleveland OH, and several others. 

This annexation option would put Vancouver on the radar on par with big cities including our neighbor Portland as far as companies looking to expand or relocate. It would be a boon to the local job market.

Vancouver has done an effective job increasing housing density and that will help younger people get into the homeownership market.

Late Season Chill Putting a Damper on the Spring "Bump"

I am seeing so new activity on listings but this late season cool period seems to have slowed the buyers dow a bit. I suspect that by mid April we will start to see real spring weather and that will bring the buyers out in force. 

Many people including some agents continue to blame the interest rates, but honestly these rates are only slightly higher than the 50 year average and they are likely to settle in for a while. I do not expect to see historic lows like we had a few years ago anytime soon. As the rates continue to stabilize in this somewhat average range, buyers will return. Sellers that have been unwilling to list because they are locked in at sub 4% rate will eventually succumb to their own needs and sell. They will downsize or move to be closer to family, etc.

The 10 year period of super low, below average rates has truly spoiled American homebuyers. Younger people never saw rates above 7% in their entire adult life. It is a shock to the system and it has eliminated some people from qualifying to buy a house. Over the years banks and government agencies have always worked to create opportunities for middle income families to own a home. 

Before assuming you do not qualify talk to a licensed loan officer to see what programs are available to you. You may have more buying power than you realize.

Own to Rent Ratio?

What is the own to rent ratio? At different times in the economic cycle it is sometimes more expensive to rent and sometimes it is more expensive to own. Even when the latter is the case, it is often still better to own. The ratio between the monthly expenses of owning vs. the monthly expenses of renting is what I am calling the Own to Rent Ratio. What is it right now? Let's find out. I decided to avoid the AI intervention and do so old school research. Using public sites such as Hotpads and Zillow I want to find out what the cost ratio between owning and renting is.

For most people the most difficult part of buying a house is the downpayment. The majority of loans issued to first time home buyers is an FHA product that has a downpayment requirement of 3.5%. There are a few other costs involved in purchasing a house as well. These up front costs are a burden to ownership. In the world of rentals typically the cost of entry is roughly 2.5 times the rent. That is much lower than the cost of entry for ownership. There are some who may qualify for a no down payment loan to buy a home, most notably is the VA loan which is available to veterans. 

I have found both a current rental listing and a recently sold home in the Ogden neighborhood of Vancouver. Ogden is a very reasonably priced area in Vancouver, not the least expensive but slightly below the city median price. 

Just a few months ago a house sold in Ogden for $459,000 it had three beds, two and a half baths, with 1700 SF on a small lot. I also found a current rental listing just a couple of blocks away for a similar home built around the same time with slightly less space at 1557 SF and also on a small lot. These are similarly equipped homes that would have sold for similar prices had they sold at the same time.

The rental house is listed at $2599 per month with $2599 required as a deposit along with a handful of typical fees. Cost of entry is about $5500 and $2599 per month on a one year lease. 

The advantages of renting are the ease of moving should you not be committed to this area or that neighborhood. Generally maintenance is handled by the landlord. The renter is not obligated to make repairs unless renter was the immediate cause of damage. 

The disadvantage of renting is that the rent can and most likely WILL rise over time. The renter does not receive any equity in the property. As the value of the home rises, the landlord benefits from that rise the tenant typically faces increasing rents. The tenant is usually unable to make any significant changes to the structure of the house and may be completely excluded from any changes including paint. When the tenant moves out the only thing they get back, and only if they met the lease agreements terms is the deposit(s) they made at the beginning. Upon exit tenant likely receives the $2599 deposit int he original upfront costs of entry. The particular home shown here had a rent escalation clause if you sign a lease longer that 18 months. That close was a 3.5% annual increase. So the rent would go up about $90 the first year and slightly more in each successive year.

So let's say you stay in that house for five years. You are a good tenant and get your full deposit back. When you leave the rent will be $2982 and you will have paid a total of $167,190 and will leave with $2599 returned. That represents a net cost for the use of the property of $164,591 over the five year period.

OK, how about a purchase? I found a very comparable home that is slightly larger at 1700 SF and sold for $457,000 in the latter half of 2024. This home is just a few blocks away with the same tax rate, schools, etc. This is a true comp. I could not find a house between 1500-1600 that was comparable in age, design, and location. This is the best comp and would likely have a similar rent if it were on the rental market. Maybe $50-$100 more at most. I'm using 459,000 as current price.

Cost of entry is higher. Using an FHA loan and buying the rate down at sellers expense, records show that a seller credit was issued on this property.  Buyer used 3.5% downpayment along with another $1500 in upfront pre-purchase costs. (Inspection, Appraisal, etc.). Total upfront cost of $17565. Monthly payment including taxes, insurance, principal, and interest at a seller paid buy down to 6.675% (presumed 700 FICO score) is $3517.71 per month. Obviously this is a much higher monthly payment. Keep in mind if you have more down payment you can avoid PMI which in this scenario is $184 per month. PMI goes away after 132 payments and can be refinanced away likely at a sooner date. Refinancing is not always a good idea but that's another post. 

Advantages to ownership. Owner gains equity in property. Owner will get strong boost in credit score over time maintaining a mortgage. Owner has more control over the property. Owner has options in the future after moving to sell or to keep property as investment. although taxes and insurance may fluctuate (up or down) the loan payment is fixed indefinitely.

Disadvantages to ownership. Owner is responsible for all maintenance and repairs on the property. Owner will need to keep property in like condition to maintain its value over time. When choosing to move owner may have to wait a bit to get property sold. Owner assumes risk of market decline and difficulty selling in that scenario. The longer owner remains in the house the less likely a decline will cause trouble. 

Real estate values in Vancouver continue to see upward pressure, although the prices are settling into a more modest growth rate around 3% annually for homes in the this price and age range. We will use an assumption of 2.5% to remain conservative. 

After five years the homeowner decides to move. It will take on average 45-60 days of marketing to sell the house. Seller can speed that up with a lower price if needed. The likely list price five years in the future at market value would be $519,000. We will operate under the assumption that the homeowner did not make any significant improvements to the property but did have some maintenance expenses that would not have been required in a rental scenario. I'll use $5000. That of course could be less or more depending on the random circumstances. 

Owner sells house at full price but offers buyer a $7000 closing credit. Owner facings their share of closing costs, plus the seller credit back to buyer, and retires the loan on the home. Owner has paid the following over the five years: $219,462 in payments including PMI, property taxes, and homeowners insurance plus the cost of repairs/maintenance. The taxes and insurance all went up during the period and those increase are accounted for. The homeowner paid $145,623 in interest payments and $32,442 in principal. The loan balance is now $410,492. Homeowner also cost to sell including Washington State excise tax (1.6%) and a real estate commission of likely 4.75%. Obviously the commission is negotiable and may be more or less denying on the route the they went. After close the homeowner receives $476,044. Taking out the upfront costs and the payments plus expenses the homeowners cost to use the property for 5 years is -$42,987. The homeowner enjoyed the use of the property and was paid back $42,987 MORE than the total amount of outlays to own it. Yes they actually made a profit and since they lived in the house as primary residence they pay ZERO in capital gains taxes.

Buying is better than renting. Now if you choose to rent the house above and then take the difference and invest it in medium risk investments. (Real estate is considered a medium risk asset). Let's call it $900 a month plus the extra $12,000 upfront difference. What would that look like? Medium risk assets in the stock market with a small but significant amount of digital assets like Bitcoin would likely produce an 7% annual rate of return. Just like real estate these assets can and do occasionally lose value.  If you did rent that house above and invest the difference in similar risk assets you would have this scenario: Total paid over the five years $221,190. You would have $81,269 in the investment account plus the $2599 deposit back for a total cost of the use of property of an outstanding $83,868. Keep in mind if you have the discipline to do this it is financially more rewarding. 

The power of real estate is not its rate of return. The typical long term appreciation on residential real estate is about 5% annually. There are much better market assets for a similar risk that will get you 7% annually. Those assets however for ordinary Americans require a much larger risk of capital. If you want to buy $459,000 worth of stocks and bonds you have to lay out the cash upfront... ALL OF IT! If you are already wealthy you can buy on margin at 50% but that has a whole lot of its own issues and typically middle class Americans are not fishing in that lake ;) 

The power of real estate is the ability to acquire a large appreciating asset with a minimal upfront risk. This concept is called leverage. The homebuyer puts up $17000 and gain the appreciation on a $519,000 asset that is free of capital gains up to $250,000 per individual and $500,000 per couple. Even at the paltry rate of 2.5% which I used in this scenario and is VERY conservative the real rate of return on the real estate is much higher than the stock market scenario above. Over short periods the rent plus investment model is better. Real estate is now and has always been a LONG TERM investment. The longer you own the real estate the less it costs to hold since interest on loans is amortized with the bulk paid up front. Even at today's mid level interest rates, leveraging a $500,000 appreciating asset for a 5% cost of entry is unattainable any where else in the middle class world.

Hello March, see you in the Morning

Yes today marks the final day of February and March begins a few hours from now. March is a month we tend to consider springtime and for those in the southern latitudes it certainly is. For us up above the 45th parallel it is a transition month that can be warm and delicious or cold and snowy. Often it 's a bit of both.

March however is the typical time that real estate picks up in our local market. Buyers start peeking at new listings and sellers decide it's time to go on the market. I suspect we will see activity increase over the next several weeks. Tis cycle may just be a tell about the summer months ahead.

The new administration in Washington DC is definitely stirring things up. This tends to lead to market insecurity. One way or another markets will settle down regardless of the success or failure of incoming federal changes. 

I am mildly optimistic about this year's market. I feel like we will see a small drop in interest rates maybe down to the low sixes and mild appreciation. We are headed towards a 4 month supply of homes which tends to slow down the price pace a bit. I think we will see near neutral to full neutral market balance between buyer and sellers. This will lead to healthy home buying decisions as well as a more fair playing field for everyone.

Let's not get to out in front of that prediction, it is still a challenge to buy in our local market with the median price well above 1/2 million dollars, but with a plan buyers can execute and get it done.

Average list price in Vancouver well above $600k

As of today the average price for a home listed in the past 30 days in Vancouver is $626,995. But an interesting note is that the average sold price in the same time period is much lower at $539,736. The market activity is in the lower half of the price range. Price reductions are up over this last 30 day period as is the listed price per square foot. 

It is not at all unusual for higher end listings to require more marketing time than lesser priced homes. This can be a big part of why the discrepancy is so wide between average list price and average sold price.

We have been slowly picking up inventory over the last year or so. This past 30 days saw 315 new listings and 284 sold properties. That is actual a very healthy ratio considering it does not include new pending sales. Sales are up over the previous 30 days.

As we enter the final month of winter we will see an uptick in new listings, but barring any economic slowing we should see new buyers to the market as spring generally picks up steam for real estate. Interest rates have stabilized hovering around 7% with dips into the 6's and as is typical, credit profile can create a spread of a 1/2 point or more. Solid credit can get you under 7% bumpy credit will be in the mid to upper 7s. 

The 50 year running average for mortgage rates has been around 6.5% so currently market conditions are just a little high. For all the media bluster about rates being high, they really are close to average right now. We just came out of a ten year period with the lowest rates in the history of the 30 year mortgage that dates to the mid 1930s. We maneuver see sub 3% mortgage again and that is a big part of why people in homes with mortgage rates under 4% are so hesitant to move.

Anyone that is confident they will remain in the local market for at least 5 years ought to strongly consider owning rather than renting. Rents are very high right now and I do not see any significant relief over the next few years as demand continues to outpace supply. Even if you have to buy something that is not as nice as what you can rent, building up equity over time is worth it.

I see young people on social media complaining about how unaffordable houses are today. I assure you they were equally unaffordable in the 1980s when I was in my 20s and mortgage rates were 15% or higher. My wife and I started out in a tiny little one bedroom condo and worked our way up to a 4 bedroom house. This is still a viable path for young people today. 

Some on social media are angry that their parents have a 2000 square foot home with a mortgage of only $1500 and they can't even rent a dumpy apartment for that money. That is why they bought a home when they were young. The mortgage payment stays the same even as home prices rise. When they bought the house back in the day it was just as expensive relatively as it is now. You have to get into the market in order to get something out of it. Like most worthwhile endeavors it is hard to get in and many will have to make lifestyle sacrifices to do so. In the end it is worth it.

It's Snowing Today, Time for a Winter Reminder

When the weather gets wintry, homeowners and listing agents should be mindful to keep the driveway and walkways clear of snow and ice. Not only is it courteous, it sets a great first impression of the home. The potential buyers will feel positive about the owners and their willingness to care for the property. 

Sellers and listing agents should not be lulled into thinking no one will show the property during winter events. It will definitely be slower than typical, but many agents including me, will and often do show property in the snow. It is always positive to see a properly cleared home during these weather conditions.

A cleared walkway is inviting and adds tot he buyer's positive first impressions of the house. Locally we only have a few winter events each year but I can say I have sold properties many times where the client viewed the home on a day with snow cover. You should always be thinking of ways to make your home as warm and inviting as possible. Psychologically it can and will help your home stand out among the rest.

Mortgage Outlook for 2025

I used an AI to summarize the mortgage market and project for the rest of 2025 and it produced an interesting article which I will post here unedited after making some personal notations and insights the AI may have missed.

In the following AI article, it mentions tariffs as a possible cause for rate increases due to the inflation tariffs sometimes have on the market. In essence this is true, when tariffs are added to imported goods, those tariffs are passed on to consumers in many cases. But using interest rates to control inflation isn't about the cost of goods as much is it is about the amount of money in circulation. Over the last several years the US Government flooded the market with cash along with low interest rates created a hot market that led to hyper-inflation. Tariffs tend to slow the market down. As prices rise, demand lowers. Tariffs will often motivate buyers of goods to seek products made domestically or from countries not exposed to the tariffs. In the case of Tariffs on Chineses goods, the Chinese government has long been known to manipulate their currency to counter tariffs keeping pricing relatively cheap against its competitors worldwide. I therefore do not believe that tariffs will have a substantial impact on rates and it is more likely to lower rates than raise them. With all that stated, let's move on to the AI generated article below.

As of early February 2025, mortgage interest rates remain a focal point for prospective homeowners and investors. Over the past few years, rates have experienced significant fluctuations, influenced by various economic factors. Understanding the current landscape and future projections is crucial for making informed decisions in the housing market.

Current Mortgage Rate Landscape

In January 2025, the average rate for a 30-year fixed mortgage was approximately 7.11%. This rate has been a point of concern for many potential buyers, as it remains elevated compared to historical standards. Despite efforts by the Federal Reserve to reduce interest rates on loans and credit cards, mortgage rates have not seen a significant decline. This resistance is primarily due to their close correlation with the 10-year Treasury bond yields, which have remained high due to ongoing inflation concerns. 

noradarealestate.com

Factors Influencing Mortgage Rates

Several key factors contribute to the current mortgage rate environment:

1. Inflation Concerns: Persistent inflation has led investors to demand higher returns on bonds, directly impacting mortgage rates. Proposed policies, such as increased tariffs, could further exacerbate inflation, maintaining upward pressure on these rates. 

   noradarealestate.com

2. Economic Policies: Government policies, especially those related to fiscal spending and trade, play a significant role. Expectations of increased government spending can fuel inflation, leading to higher mortgage rates as lenders adjust to anticipated economic conditions. 

   noradarealestate.com

3. Market Sentiment: Investor confidence and market sentiment influence demand for mortgage-backed securities. High levels of economic uncertainty make investors cautious, leading them to seek higher returns, which in turn elevates mortgage rates. 

   noradarealestate.com

Projections for 2025

Looking ahead, experts anticipate a gradual decline in mortgage rates throughout 2025, though rates are expected to remain above 6% for most of the year. Here are some projections:

• Early 2025: Rates are likely to hover between 6.5% and 6.8% as the Federal Reserve maintains a cautious approach to interest rate cuts.

• Mid-to-Late 2025: Mortgage rates could fall to the 6.0% to 6.5% range, with some forecasts suggesting a decline to 5.8% by Q4 2025. 

  myperfectmortgage.com

Major financial institutions have provided the following insights for Q4 2025:

• Fannie Mae: Expects the 30-year fixed mortgage rate to average at 6.2%.

• Wells Fargo: Projects rates to average around 6.3% by the end of the year.

• Goldman Sachs: Predicts rates will remain above 6% through 2025. 

  nbcnewyork.com

Impact on the Housing Market

Elevated mortgage rates have a direct impact on housing affordability. Higher rates increase monthly mortgage payments, which can deter potential buyers and slow down the housing market. However, a gradual decline in rates throughout 2025 may provide some relief, potentially stimulating buyer interest and activity in the housing sector.

Conclusion

While mortgage rates are expected to decline gradually in 2025, they are likely to remain above 6% for most of the year. Prospective homebuyers and investors should stay informed about economic developments and be prepared to adapt their strategies accordingly. Consulting with financial advisors and mortgage professionals can provide personalized guidance to navigate this evolving landscape.

Understanding the Price Ceiling

Many people that decide to sell make mistakes in "prepping" their home for sale. These mistakes can be either spending money to spruce up the home that will not return in increased offers or a better price, and or not doing things that will definitely increase offers or home value.

There are many scenarios but broadly they fit into the notion of a neighborhood price ceiling. Neighbor hoods do have a ceiling. It is very possible to over improve your home. It is also possible to leave money on the table by not bringing your home up to the neighborhood standard. 

If you are intended to sell your house as a "fixer" you have to decide whether or not you want it financeable. There are essentially three tiers of finance in this regard. The best is government financeable. These homes meet the more strict standards of the FHA and VA lenders. Having your home qualify in this tier means the entire market is available to purchase the home. This is a cosmetic fixer at worst and is move in ready. Next is conventionally financeable. This means the home meets the Fannie Mae and Freddie Mac standard. The home can have a few issues like a roof that is nearing the end of life, or a bad deck in back but still is livable. These loans typically require a larger down payment by the borrower or more expensive mortgage insurance if less than 20% is put down. It tends to eliminate most first time buyers or those with tight finances. The final tier is cash or alternative financing. In this tier you are more likely to get offers from flippers or investors at lowball amounts. You might get an ambitious person that wants to live in the home but you won't be anywhere near top dollar.

If you find yourself in the cash only tier it is typically a waste of time to do cosmetic fixing since the home needs much more serious attention anyway. If you are in the Conventional tier it can be worth some cosmetic work to attract non investor buyers who tend to bid up higher. It is generally better to be in an inferior home in a nice neighborhood than the superior home in an undesirable neighborhood. 

If most home in your neighborhood are in average to below average condition and few of them have modern updates, it's better not to over improve. Cleaning up and doing some fresh paint and or making minor cosmetic repairs is fine. Don't do a 50k kitchen remodel however as you likely will not see that money at closing. If your neighbors home are all noticeably nicer than yours, then you can definitely make a handsome gain doing upgrades that bring your home into alignment with the neighborhood.  

Before doing any expensive renovations talk to your trusted real estate pro to be sure the market will be attracted to the changes and whether the expected price will benefit from those improvements.   

2025 Clark County Real Estate Outlook

Clark County's real estate market in 2025 is expected to remain resilient despite potential economic headwinds and ongoing shifts in housing preferences. Key drivers shaping the market include sustained population growth, changing interest rate dynamics, and a continued demand for diverse housing options.

Population Growth and Demand

Clark County continues to attract residents due to its relative affordability compared to most of Portland and Washington County, OR. Our desirable quality of life. Proximity to urban amenities, a robust job market, and scenic surroundings make it a magnet for families, retirees, and remote workers. As the population grows, the demand for housing is expected to keep pace, particularly in suburban and semi-rural areas. So long as our legislature and new Governor don't get greedy, we will continue to offer a superior tax profile than our southern neighbors in Oregon.

Home Prices

Median home prices in Clark County are likely to see modest appreciation, continuing trends from 2024. However, price growth may be tempered by affordability challenges and higher borrowing costs. As of late 2024, the median home price hovered around $540,000, and projections suggest a moderate annual increase of 3-5% in 2025. I feel like the projections for appreciation are a little ambitious. Unless we see a 1/2 to 1 point drop in rates, appreciation will likely be more like 2-3%

Interest Rates

The Federal Reserve's stance on interest rates will significantly influence the market. If mortgage rates stabilize or decline slightly from their 2024 levels, buyers may return to the market in greater numbers, boosting sales activity. Conversely, persistently high rates could cool demand, especially among first-time buyers. it is important to keep in mind that current rates are only slightly above the 50 year rolling average. Having just exited a long period of well below average rates, younger borrowers are not accustomed to the "real normal." The fifty year average mortgage rate is in the mid sixes and we are currently averaging around 7%. 

Housing Inventory

Inventory levels in Clark County are expected to remain tight, as new construction struggles to meet demand. Rising construction costs, labor shortages, and regulatory hurdles continue to constrain the pace of development. However, several new housing developments, particularly in Ridgefield aim to address these shortages.

Market Segments

• Single-Family Homes: Continued strong demand, especially for homes priced under $600,000. The classic median priced single family home remains firmly in the grip of sellers with about three months of inventory available. 
• Multifamily Housing: Increased interest in apartments and townhomes as affordability pressures push buyers toward more budget-friendly options. This segment has been ferociously competitive over the last decade but saw some taming in late 2023 and early 2024. The end of the year saw things tighten again however.
• Luxury Market: Demand for high-end homes may stabilize but remain a smaller segment of the market. Vancouver's luxury condo market is just a bit saturated with inventory at the moment, but sales are steady enough to keep prices stable.

Key Challenges

1. Affordability: Rising home prices and higher borrowing costs remain significant barriers for entry-level buyers. Our area is one of the most expensive in the country, yet a significantly more expensive market in the Seattle Metro is driving substantial numbers of people to our local area.
2. Inventory Shortages: Limited availability continues to frustrate potential buyers and drive competition. That situation however showed a great deal of improvement in 2024 and 2025 could see inventory levels rise a bit more. Seller's may yield a bit of the market back to buyers this year but I doubt we will move beyond a neutral market in 2025.
3. Economic Uncertainty: Broader economic conditions, including job growth and inflation trends, could influence housing demand. Inflation has finally calmed a bit but remains slightly above average. A new incoming administration at the federal level and state level could move the market one way or another.

Opportunities

1. Urban Growth Areas: Expansion in developing areas like Battle Ground and Washougal offers opportunities for affordable housing. Vancouver's Urban Growth Area still has large areas of available land for suburban and urban scale development.
2. Remote Work Influence: Remote workers continue to drive interest in Clark County, where they can enjoy suburban living with proximity to a major metropolitan area. All four of the Portland Vancouver metro area counties provide this amazing synergy of a fast transition from rural to suburban to urban. This dynamic is typically only found in mid tier major markets like Portland-Vancouver, Sacramento, Las Vegas, Cincinnati, Nashville, etc.

Overall, the 2025 housing market in Clark County is expected to balance modest growth with ongoing challenges. There are opportunities for every price range locally so buyers need not be discouraged just know that in times of high housing costs, some buyers may have to settle for something a little less than ideal. But these are stepping stones to getting the perfect house.