Nearly four years after local home sales started to plummet, Clark County houses are still losing value, according to a new report.
And while the number of properties sold in April and May is up slightly from 2009, when the housing market bottomed out, this year’s totals for the two months remain well below what was once considered normal. Meanwhile, Clark County’s foreclosures are still high enough to keep the area in the runner-up position with the second-highest foreclosure rate out of Washington’s 39 counties.
Housing experts foresee continued price-softening as banks hold quick fire sales on the houses that have slipped through the cracks.
Meanwhile, changing attitudes about home ownership and lending continue to push the housing slump into a downward spiral without a foreseeable end, said one local economist.
“It could be literally years or decades before you see the kind of price increases we saw several years ago,” said Tim Duy, an economics professor at the University of Oregon.
In the meantime, don’t expect home prices to bottom out until mid-2012, said Dick Riley, owner of Riley & Marks appraisal firm in Vancouver.
“It’s going to take another year before we start to see some change,” said Riley, who said high unemployment is hampering the market’s recovery.
According to the Riley & Marks “benchmarks” report, local home values in April fell 24.1 percent to a median price of $195,000 for all new and existing homes sold, compared with the same month last year. From April to May, median prices stepped down 1.6 percent to $189,950, said “benchmarks,” which counts every sale recorded in Clark County.
“This is happening all over the country,” said Duy, referring to national data released this week.
This week’s Case-Shiller report for the first three months of the year showed that U.S. home prices have fallen more steeply than the 31 percent decline of last century’s Great Depression. This time around, prices have dropped by about 33 percent, the report said.
Duy blamed the steep drop on two primary factors:
“No. 1, tighter underwriting standards. There is clearly not as much money available for home lending,” he said.
Duy also blamed changing attitudes about home buying as a key ingredient keeping home sales slow.
“I don’t see either of those situations changing in the near future,” he said.
But Duy expects slumping single-family home sales to help other businesses thrive, such as multifamily apartment developers and businesses that own, oversee and manage residential rentals.
“On a national basis, we’re seeing an uptick in multifamily housing and that is indicative of people having more confidence in the rental market,” Duy said.
He said projects to construct apartments are among the projects that banks are willing to finance.
“They can see the potential cash flow on those types of businesses, so they’ll lend into it,” Duy said.
He does not expect local and national housing markets to start recovering fully until high demand for rentals begins to push rent prices higher than typical mortgage payments for single-family homes.
“If you really want to see a rapid rise in housing values, I think you have to get those prices below the rental equivalent,” Duy said.