Any good economic news is like a warm breeze on a summer day, wafting over you like a long-lost friend. So it is that we greet the latest update on Clark County’s housing market with a smile and a bounce in our step.
As reported in Friday’s edition of The Columbian, July home sales in Clark County this year reached their highest number since 2005. According to RMLS, a Portland-based real estate listing service, last month’s 681 completed sales represented a one-month increase of 22 percent as well as a 39 percent increase over the previous July.
The report also indicated that the median sales price during the month was $221,000 — a 19 percent increase from July 2012.
On top of that, last week the Wall Street Journal ranked the Portland-Vancouver area as the eighth-hottest housing market in the country, noting that during the second quarter of 2013 the median home in the area had been on the market 39 days. That represented a 46 percent decrease from the previous year.
Overall, the numbers indicate that the local market favors sellers over buyers, but Realtors say that the market for high-end homes still favors buyers, with supply exceeding demand.
The fact that houses are being sold — and money is exchanging hands — is good news for Clark County. The housing market is one of the leading indicators of economic strength, reflecting the confidence of consumers and their ability to secure financing in order to delve into a big transaction.
Nationally, the Commerce Department on Friday delivered some more good news, reporting that housing starts rose to an annual rate of 896,000 in July. That’s up from the 836,000 annual rate reported in June, and the growth reflects builders’ confidence in the economy and its continued recovery.
We still have a long way to go. During the boom years prior to the Great Recession, the annual rate of housing starts approached 2 million. But progress is progress.
As with any good economic news, however, there is a downside. Interest rates also are rising, and The Washington Post reported Friday that, for somebody taking out a $200,000 mortgage, the monthly cost of owning a home has risen 12 percent since the start of May. That can make things difficult for would-be buyers, and an excessive increase in interest rates could scuttle the gains that have been made in home sales. If the cost rises too much, purchasers get priced out of the market, builders stop building, and the growth we have seen comes to a screeching halt.
It is a tenuous balance, and when it becomes lopsided — as it did in the mid-2000s — it creates a housing bubble that eventually bursts and torpedoes the entire economy. The hope is that lenders and lawmakers have learned from the recent past and will allow the housing market to grow cautiously this time around. Last decade’s stories of people sleeping in their cars in order to get first crack when new homes went on the market and then grossly overpaying for them were a harbinger of the crash that was inevitable.
But for now, we shall revel in the good news coming from local Realtors. The RMLS reports that Clark County’s 5,798 new listings this year represented a 23 percent increase over the first seven months of 2012. Sellers are confident they can recoup their investment, and confident they can afford a suitable replacement.
And that’s like a breath of fresh air.