The Southwest Washington real estate market continues to sizzle during this year’s hot summer, with home sales and prices continuing their steady year-over-year upswing in July, according to the latest report from the RMLS real estate listing service.
Home sales did decline by 3.5 percent from June, a typical summer sales pattern that contributed in part to a slight increase in the inventory of homes for sale. But the 2.4 month supply of homes on the market is still well below the 4.5 to 6.5 month supply that typifies a healthy balance between supply and demand, said Terry Wollam, managing broker at ReMax Equity Group in Vancouver. “Monthly inventory is still at an abnormal low,” he said.
On average, a home sold in July had been on the market for 58 days. That compares to an average of 85 days on the market for homes sold in July 2014.
An increase in interest rates is inevitable, with only the timing of an increase in question. Wollam speculates that higher rates could dampen sales and return inventory to more normal territory.
The current housing market is characterized by an adequate, or better, supply of high-end housing and a shortage of low-priced homes for first-time buyers. Wollam said the market is strongest in its middle range, with a growing segment of middle-income professionals buying homes. They include employees from such companies as Fisher Investments, Integra, PeaceHealth and Banfield Pet Hospitals, which is relocating its headquarters to Vancouver next year. Retirees from the Portland area and beyond also are a big market.
“More than anything, we do see many retirees as moving into the area to take advantage of our taxes,” said Wollam, in reference to the state’s absence of a personal income tax.
The toughest market, Wollam said, is in the under $200,000 price range. Few homes are available for sale in that entry-level price range and not many are being built, Wollam said. And while that price is attractive to renters facing fast-rising rates, many would not qualify for loans because they are paying too large a percentage of their income in housing costs to qualify for a mortgage loan, he said.
The July RMLS report notes that the month’s 820 closed sales marked a 25 percent increase over the 655 closings in July 2014. In June, always a strong month for real estate sales, RMLS reported 850 closed sales.
The month’s 833 pending sales were 9.3 percent above July 2014’s 762 pending sales but were 6.8 percent short of the 894 offers accepted in June 2015, RMLS reported.
There were 1,156 new listings in Southwest Washington in July, an 8.7 percent increase for the month and a 16.6 percent jump from the 991 new listings offered in July 2014. New listings have increased 10.3 percent for the year.
The median sales price of a home sold in July was $273,700, up 8.7 percent from the year-to-date median of $260,000. The median price of a home sold in July 2014 was $251,500.