Clark County home sales increased slightly in September as first-time homebuyers continued to take advantage of lower prices and interest rates.
Sales increased 10 percent from August, with 414 new and existing homes selling in September, according to the latest Riley & Marks benchmarks report released Wednesday. Sales were down 25 percent from a year ago, however, and were still dramatically below this year’s sales peak of 640 homes in June, the final month the $8,000 federal home buyers tax credit was available.
“The tax credit skewed (sales) a bit and we’ve recovered from that to get a more natural number,” said Pam Dickinson, an associate broker with ReMax in Vancouver.
Home prices remain low, driven by the continued abundance of foreclosures and short sales. (Short sales are property sales for less than the mortgage amount).
Clark County’s median price was $213,500 in September, slightly below August’s median of $216,115. Home values peaked in August 2006 at a median price of $271,000. Prices then gradually fell, reaching a low of $199,590 in November 2009. The median has since fluctuated between $205,000 and $217,000.
The number of Clark County foreclosures surged to 1,451 in the three months ending Sept. 30, a 24 percent increase over last year’s third quarter.
As a result, short sales and sales of bank-owned properties accounted for about 35 percent of home sales brokered by a realtor, according to RMLS, a real estate listing service. It’s likely that the actual share of Clark County home sales linked to foreclosures is even higher, because the RMLS numbers don’t include sales that happen on the courthouse steps, said John Lifflander, a Vancouver appraiser and real estate broker.
With unemployment and foreclosures both high, the Clark County market is likely to see lower prices for an extended period of time, Dickinson said.
Home sellers who are not under duress may find it difficult to compete with the low prices being offered by their short-selling neighbors, Dickinson said.
Homes listed under $250,000 continue to be the strongest market in the Vancouver-metro area, said Ellen Hurtzell, a Vancouver realtor with RealtyPro. With unemployment above 13 percent and housing prices still bouncing along the bottom, current homeowners are hesitant to try to move up to more expensive or larger homes, she said.
Uncertainty about the outcome of upcoming elections is also putting some decisions on hold.
“There’s a lot of people just waiting to see what the market is going to do,” Hurtzell said. “A lot of people would like to move but they’re concerned about the values.”
All of these factors combined means homeowners are facing a long wait for home values to appreciate significantly again.
“The negative thing here is that interest rates are now lower than they’ve been in 70 years and they’re at a new low in the lifetime of most people and yet sales are not increasing, which doesn’t portend good things for the real estate market,” Lifflander said. “Until available properties are absorbed due to a slowdown in building, which could take years, the market will probably not see an upswing. Moreover, when rates increase, which will have to occur at some point, values will decrease because buyers generally purchase based on the monthly payment, not the total price.”