Home sales were on the upswing in August for the second month in a row as first-time buyers rushed to lock in low mortgage loan rates and take advantage of shrinking prices.
Local experts aren’t ready to declare that the battered housing market has hit bottom, but prices are low enough now to lure droves of first-time buyers and real estate investors looking to purchase from the county’s inventory of starter homes.
“For first-time homebuyers that have been thinking about it,” said Tracie DeMars, an agent with Re/Max Equity Group in Vancouver, “there’s no better time. They’re starting to see that now.”
Last month, 511 new and existing houses sold in Clark County, compared with 375 sales in August 2010, according to a Monday report issued by “benchmarks,” an arm of Vancouver-based Riley & Marks Inc. appraisal firm. The 36 percent increase in August sales represented the second consecutive month the local market experienced a year-over-year increase. In July, 512 homes sold countywide, up 53.8 percent from the 333 houses sold in July 2010.
Steadily declining prices were part of the lure. August’s median sales price — half sold for more, half for less — was $185,503 for all new and existing houses sold in Clark County, down 13 percent from the median of $216,115 in the same month last year.
While the first-time buyers believe their equity will grow at this point, investors hope for some turn-around profit or cash flow from rent, said Kale Dunning, a broker with Dunning and Associates at the Salmon Creek office of Coldwell Banker Seal.
“The investors’ market is as important right now as the first-time homebuyers’ market,” he said.
DeMars said most buyers are looking at houses priced under $200,000, while sales activity remains slow in the higher-priced housing markets. The steadily declining median price reflects both dropping home values and a lack of sales at the upper end of the market, she said.
The lack of demand for housing outside the starter market has meant less action for area homebuilders, although DeMars said a few local companies are building and selling houses for the starter-home market.
“It’s sad to say, but it’s still cheaper to buy an already built house than to have one built,” she said.
Local homebuilding has been nearly halved so far this year, as measured by building permits for single-family houses. In the eight months ending in August, 233 permits were issued in unincorporated Clark County, down from 415 permits handed out during the same period in 2010.
Dunning said he is encouraged by signs of recovery in the existing home sales market. However, he pointed out that last year’s July and August sales were artificially low because demand dropped after a federal tax credit for home purchases ended on June 30, 2010.
In August, “We got over 500 closed deals. That’s not knocking it out of the park,” he said. “It’s a little out of context from the perspective of where sales were one year ago.”
The local housing market peaked in 2005, when 1,339 homes were sold in Clark County in August. By August 2008, home sales were down by 62 percent to 506 houses sold.
Foreclosures an issue
DeMars said local real estate agents don’t expect the pace of home sales to pick up speed until Clark County’s large inventory of distressed properties, primarily bank-owned properties, works its way through the system.
“I pulled up 136 listings for a client and only eight of them weren’t short sales,” she said.
Last month, Clark County continued to hold the third-highest foreclosure rate of the state’s 39 counties, with one out of every 572 homes in some stage of default, according to California-based RealtyTrac Inc. However, the total number of county homes in foreclosure dropped to 286 units in August, down almost 15 percent from 336 houses in July, and down 46 percent from the 533 foreclosures in August 2010.
DeMars added that homes being marketed as short sales — in which the mortgage holder accepts a selling price that is less than the outstanding debt on the property — could soon become bank-owned properties through the foreclosure process.
“I think we’re going to see foreclosures coming through for at least the next couple of years because there are still so many short sale” listings, she said.
DeMars said short-sale properties present problems in that a prospective homebuyer can’t lock in on an interest rate when they submit a bid. The properties can also take between three and four months to sell, she said.
“They’re still moving very slow,” she said.