Clark County home sales continued to stabilize in January, as a new type of cash buyer invested in the market.
The month’s 319 home sales were on par with the 318 houses that sold in January 2010, and up 24 percent from January 2009, according to Vancouver-based Riley & Marks Inc.’s monthly “benchmarks” report. Although fewer homes sold than during the peak of the housing boom, some say the numbers show that steady and consistent demand has returned.
Prices, on the other hand, fell 10 percent from a year ago when the median sales price — half sold for more, half for less — was $219,900 for all new and existing homes. Though down over the past year, that’s about even with December’s median of $197,850, “benchmarks” reported.
Median home price (January)
2011 — $197,925
2010 — $219,900
2009 — $214,900
2008 — $245,380
2007 — $263,900
Home sales (January)
2011 — 319
2010 — 318
2009 — 244
2008 — 312
2007 — 517
Source: Riley & Marks Inc., Vancouver
That means, experts say, that the market is leveling out as bank-owned properties sell at bargain-basement prices.
Destined for rentals
Many of the new buyers are cash investors who will convert the houses into income-producing rentals to accommodate a 22 percent uptick in out-of-town arrivals moving to Clark County that has pushed rent prices higher.
“You’re seeing an equilibrium being reached,” said Noah Blanton, division president of Stewart Title Co., with offices in Vancouver, Longview and Portland. “Buyer demand has remained at the levels we’ve seen last year, but what you’re seeing, to meet the demand, is prices continued to fall.”
Some expect further price softening as more banks accept all-cash offers for repossessed homes.
One out of every 429 Clark County houses was in some stage of foreclosure in January, California-based RealtyTrac recently reported. The situation has left few neighborhoods unaffected by downward price pressure.
Moreover, uncertainty and strict lending guidelines are making it even more difficult for the average homebuyer to borrow, said Scott Anthony, who specializes in marketing bank-owned properties for Windermere Real Estate Stellar Group.
He said banks that are selling off repossessed houses won’t wait for buyers to get loan approval, which can take 30 days or longer.
“The banks don’t want to do the repairs or wait for the inspection,” Anthony said.
When buyers pay cash, banks can liquidate real estate in as little as 15 days, which gives cash buyers the bargaining power to low-ball the purchase price and ultimately drive down the market.
“A cash offer will come in at $10,000 less and the bank will take it,” Anthony said.
A different demand
Blanton said cash buyers are most often converting the houses into income-producing rentals.
An uptick in population has driven down rental-home vacancy rates, which could push rents higher.
“There’s still a demand for housing. But it’s different from the demand for home ownership,” Blanton said.
He and others predict the market for buyer-owned dwellings to return in 2012. In the meantime, Blanton said the distressed property investors could help spur the market’s recovery.
“Inventory absorption is good,” Blanton said, predicting that the number of foreclosures on the market would continue to shrink.
The investors will either rent or hold and re-sell, he said.
The process could continue to affect existing Clark County homeowners who are “underwater,” which means they owe more on their mortgage balances than they are able to fetch on the market. A report from Seattle-based Zillow said 32 percent of the Portland-Vancouver metro area’s homeowners were underwater, compared with the national rate of 27 percent.
“But we’re starting to see some stabilization in sales,” said Terry Wollam, an agent with Re/Max Equity Group and president of the Clark County Association of Realtors.
That could help mortgage lenders regain confidence in the market.
“Prices are going to move in a lateral direction, not up or down,” Wollam said. “If we go sideways, it’s actually a positive.”
Some real estate experts said the market for new homes will return as the existing inventory sells off.
Existing houses are now selling for less than the cost of construction, said Wollam, also a co-developer of new homes at the Camas view site, Summit at Columbia Vista.
Wollam predicted that Clark County’s housing market would stabilize through the year, with sales sharply increasing in 2012.
