Clark County’s free-falling housing prices may have actually hit bottom over the winter and started a slow ascent in March, due to stronger demand for mid-range to upper-end houses.
The demand, coming mainly from the employees of newly relocated companies such as PeaceHealth and Fisher Investments, likely contributed to a 6.7 percent increase in county home values in March compared with February’s prices, according to Terry Wollam, an agent with Re/Max Equity Group in Vancouver. He also cited a shrinking supply of houses listed for sale. Others say rising rents, growing consumer confidence and improvements in household budgets could help finally strengthen the housing market.
There are caution flags: National housing analysts warn that the market still could be flooded by a “shadow inventory” of bank-owned houses and units that have not yet been vacated by delinquent owners.
In Clark County, the median home price — half sold for more, half for less — was $176,000 for houses sold by licensed real estate agents in March, according to Portland-based RMLS. That price has risen slightly compared with recent months, after a period of relative stability that began in mid-2011.
“That’s when we started to see it (the median price) level out,” Wollam said.
Now, he and other real estate brokers expect housing prices to rise, based on rising demand and a shrinking supply of houses listed for sale in Clark County. At the lowest level since September 2006, it would take just 6.4 months to sell off the inventory of housing units listed on the market if no new listings were added, RMLS reported.
The number of houses sold in Clark County climbed in March, as buyers took advantage of declining values. In March, 412 housing sales closed, up 25 percent from February and a 5.6 percent increase over the same month last year. There were 541 pending transactions in March, up just slightly from 532 pending sales in February.
Now there are even shortages in some price ranges — for instance, among newer, higher-quality housing, said Scott Mikel, a broker with Scott Mikel & Associates Realtors in Vancouver. Because of a home-building slump that has lasted more than four years, “there’s a big shortage of houses that are two and three years old,” Mikel said.
Clark County’s homebuilding industry exhibited small signs of recovery in March, with 43 permits issued to build single-family houses in unincorporated parts of the county, up slightly from the 40 permits issued in the same month last year.
But national experts have said that not all vacant properties have been listed for sale, as many bank-owned houses are being held back as part of a growing cache of “shadow inventory.” Some say banks are foreclosing homes at a slower pace in a deliberate attempt to avoid the housing market and driving prices down further.
But it’s difficult for real estate professionals to gauge the effects of the so-called shadow inventory, Mikel said
“I think its definitely a factor. There are a half-dozen (bank properties) that come on the market every day,” he said. He expects the sale of distressed properties and more upscale inventory to balance each other out.
“I’ve always believed the price-range segment of the market gives the big picture,” Mikel said, adding that selling trends have shifted away from the notion of a buyers’ market.
Bidding is back
Recently, Mikel has seen the return of bidding wars, which had been absent from the Clark County residential market since 2006.
“There is lots of indication that houses in good condition are going to start to shine again,” Mikel said.
Wollam said many of his clients are looking for houses costing $250,000 or more, a range of inventory that is quickly depleting thanks to new companies’ moving to the area.
“I’ve had two sales to Fisher (Investments) employees in the last two weeks and one to a PeaceHealth employee,” he said.
California-based Fisher Investments has completed construction of two buildings on its 120-acre Camas campus. The company employs 450 people — some new hires and some transplants at the site, and expects to break ground on a third building this year.
PeaceHealth has begun to move corporate and administrative staff into its new headquarters in east Vancouver. The company plans to eventually employ 600 people in Vancouver.
Otherwise, job growth has remained stagnant in Clark County, with a projected 11 percent unemployment rate in February and a net total of 900 jobs, year over year, according to the state’s Employment Security Department.
Regardless, Wollam expects a number of factors to push housing prices and sales gradually higher.
“Consumer confidence is up, (interest) rates are still where they’ve been and people that have had short sales have waited the required two years so they can buy now,” he said.
Wollam also expects rising rents to motivate buyers.
In the three months ending in December, the average rent for a Clark County apartment was $803 per month, up 3.6 percent from $751 during the same period in 2010, according to the Washington Center for Real Estate Research in Pullman.