The number of Clark County homes sold climbed in July, driven by first-time buyers and investors who chipped away at the inventory of bargain-priced houses.
But an ongoing price free-fall means the area’s housing market has yet to recover, according to local real estate experts.
Beyond purchasers of low-cost entry-level homes, buyers seem hesitant to spend and sellers seem wary of the low prices their houses are likely to fetch. That’s created a housing market that’s difficult to predict, with some real estate experts anticipating prices to stabilize early next year, and others more wary about the future
The number of county homes sold in July rose 53.8 percent compared with the same month last year, according to data compiled by Vancouver-based Riley & Marks appraisal firm. The company’s “benchmarks” tracking service tallied 512 sales of existing and new single-family homes last month. That was the most sold in July since 2009. It was also 179 more houses than were sold in July 2010, a period influenced by the momentum of federal tax credits for first-time and move-up buyers.
“That program grabbed a lot of buyers and carried them through July,” said Terry Wollam, an agent with Re/Max Equity Group and president of the Clark County Association of Realtors.
But then the program ended, and during the second half of 2010, home sales plummeted to record lows, a slump that continued through the first three months of 2011.
Wollam said April marked the start of improving sales.
“I think this cycle will continue through the first quarter,” he said.
In the meantime, home values have reached new lows in Clark County, where the median price — the point at which half the homes sold for more and half sold for less — dropped to $185,500 in July. That was down 2.4 percent from June’s median and down 12.7 percent from the $212,400 median sales price recorded in July 2010.
Some predict the housing market will remain dysfunctional, just somewhat less so than it was a few months or a year ago. For selling agents, dropping values create pressure when it comes to setting the price of a listing, said Mike Lamb, a broker with Windermere Real Estate/Stellar Group in Vancouver.
The area’s high percentage of distressed housing inventory continues to place downward pressure on pricing, leaving sellers of non-distressed properties with fewer equivalent recent sales.
“The problem we’re having now is there is somewhat of a lack of data,” Lamb said.
During the three-month period ending in June, sales of distressed properties — those whose owners are in some stage of default — made up 587 home sales in Clark County, according to a report issued this week by California-based RealtyTrac. Many of the remaining transactions were short sales, in which the mortgage holder accepts a selling price that is less than the outstanding debt on the property.
“You have to look at as much sales data as possible so you have a large sample” of comparable properties,” Lamb said. “You have to price it right.”
Nevertheless, lower prices are bringing more entry level homebuyers into the market, said Tracie DeMars, a broker with Re/Max Equity Group in Vancouver.
Low mortgage interest rates have created “the perfect storm,” DeMars said. “If you buy now, you can buy when everything is low.”
Unlike the market’s enthusiastic first-time buyers, move-up buyers continued to ride the fence in July, DeMars said. She expects the trend to persist, as owners of existing properties face the pressure of falling home prices and slowly rising mortgage interest rates.
Home mortgage rates inched up again last week, according to the Mortgage Bankers Association in Seattle. The association reported the average contract interest rate for 30-year fixed-rate mortgages increased to 4.39 percent from 4.32 percent for 80 percent loan-to-value ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.56 percent from 3.47 percent.
“Last year at this time, there were more move-up buyers in the market,” said DeMars, adding that it’s difficult for owners of non-distressed properties to sell because their listings compete with bargain-basement-priced foreclosures and short sales.
“Right now the king of the market is the first-time home buyer,” she said.