The secret is out: Clark County’s housing market is hot! Clark County, Washington is in the midst of a full-fledged economic comeback. Not only are real estate sales climbing sharply, but rental rates continue to see unprecedented increases. Demand has also inspired new home builders to develop new neighborhoods. This year, the area’s top economic minds gathered in the Vancouver Convention Center at Esther Short Park to share their 2015 forecast with about 500 interested business owners and members of the press. Every speaker and contributor had positive sentiments. Among the high points of the forecast were the region’s ever healthier housing market, impressive job growth and bright industrial future. Employment opportunities are also bringing more and more people to the Pacific Northwest. The future is looking bright.
Real estate sales are strong. The tight residential housing inventory is keeping prices relatively high. The median sale price change is up 9.7 percent ($259,000 v. $236,000) compared to the previous 12 months. The last five months of inventory have been under three months, historically very low inventory levels.
“August saw strong pending sales in Southwest Washington. The 849 pending sales ended 21.5 percent ahead of the 699 offers accepted in August 2014 and 1.9 percent ahead of the 833 offers accepted in July 2015. The last August with more pendings was in 2005, when 1,052 offers were accepted during the month.” – Market Action Report August 2015
The local housing market is spurred by 4.5 percent job growth, with a shift towards skilled industry. Clark County has the newly-relocated PeaceHealth, Fisher Investments and Banfield Pet Hospital, as well as major expansion plans for Oregon businesses like Nike and Intel. Skilled workers who need housing are moving in droves to the greater Portland Metro area, many of them settling in Clark County.
Who is buying? Former Vancouver renters and savvy investors from all over the globe are buying in Vancouver. Renting is becoming less affordable than ever before. The historic monthly income spent on rent in the Portland Metro Area is 22.6 percent (1985-2000). Currently, Vancouver renters pay 32.1 percent of their monthly income in rent. At Zenith Properties NW LLC we have seen an 8-10 percent increase in rental rates for the portfolios we have under management. Vancouver, Washington has the largest rental increases in the country (see article on Page 5). Many renters have decided to take on a mortgage while they are still a relative good buy with low interest rates.
All of this progress in the rental market is not without distress for some, however. The increasing rental rates and tight demand in the rental market can mean hard times for many low-income renters. Affordable housing in Clark County is a real issue.
Due to the increase in rental rates, many units that were once affordable are now being renovated. Owner-investors are eager to spend the necessary funds to improve their units if it means demanding more in rents. Similarly, the traditional fear of turnover expenses is lessoned for owner-investors when they know that a higher rental rate is available on the other side. These improvements, and the higher rents they demand, mean that most low-income residents are forced out of their homes, often with few options for re-location.
The Vancouver City Council is planning on instituting changes to help tenants in this economic shift. There are several rules on the horizon that will impact landlord-tenant law in an effort to manage affordable housing. Large turnouts at city council meetings this month where these topics were brought up prove that these issues are vitally important to the community.
Denny Miller is the founder and designated broker for Zenith Properties NW LLC. The company offers real estate selling and buying, mid-size investment consultation, as well property management in Clark County. He can be reached at Denny@Zenithpro.com or 360.816.9751.
Disclaimer: As with any real estate statistics, we do our best to provide the best representation at the time the data was acquired. We deem the data and reports reliable but not guaranteed.