For apartments, a vacancy rate below 5 percent indicates a tight rental market. Right now, the state-wide vacancy rate is 2.7 percent. In Clark County, the rate is 2.1 percent. For two-bedroom units, it’s even lower at 1.9 percent. No wonder rents are soaring (the average rent for one-bedroom units is $1,024 and, for two-bedroom units, $1,134), and millennials are changing their minds from “I don’t care about buying a home like my parents did,” to “We need to buy so we can lock in our payment!”
Median Home Price is $350,000
But, where can a renter find a home they can afford? That’s no easier than finding a cheap apartment among the 50,000 apartment units in Clark County. With a median sales price of $350,000 for existing homes (and there were 132,079 as of 2017 – that’s homes, not sales of homes), inexpensive homes are close to impossible to find. Statistics compiled by the Runstad Department of Real Estate at the University of Washington (the source of all of the statistics cited in this article) show falling vacancy rates for the last 10 years and how Washington state’s rate is lower than the national. Remember, Clark County’s is lower still.
Single-Family Building Permits Down
In 2017, building permits for single-family homes were down 21.4 percent from 2016 (2,080 compared to 2,645), but permits were up 14.4 percent overall when multi-family and non-residential permits are included.
It’s clearly not a lack of demand for homes that is causing the decrease in new home starts – it’s other factors, including the increasing difficulty for homebuilders to be able to balance the high cost of buildable land with the cost of finished homes that buyers can afford. If the raw ingredients of housing (land, materials and labor) are priced too high, the cost of the finished product is too high as well. Add in the costs of permitting and infrastructure like schools, parks and roads, and the formula is hard to balance.
The solution: Not a moratorium as some no-growth advocates support, as that simply further imbalances supply and demand and drives prices even higher, but responsible growth that takes into account the need for growth but also the need for good land use planning to accommodate that growth. This is an approach championed by groups like the Responsible Growth Forum, of which Clark County Title is a proud participant.
Interest rates are rising as the economy remains strong, while unemployment remains low. Even with interest rates rising, nothing on the horizon indicates that demand for housing in Clark County will decline, for either single-family housing or apartments. Interest rate changes, unless they become more drastic than predicted, will have an effect on the market, but not extinguish the fundamental drivers: (1) people are moving to Clark County and need a place to live and (2) no more land is being made (except by Hawaiian volcanoes).
Title Company Resources
Your title company can be a resource for real estate professionals, investors and anyone needing property information or contacts within the industry. We maintain a database of all Clark County and Skamania County properties and offer a variety of products and services, including title insurance and other informational property reports, escrow and builder/developer assistance.
Scott Hogan is manager of Clark County Title Company. He is an attorney licensed to practice in Washington and Oregon, and a native of Vancouver. Readers are advised that no legal advice is intended by this article, and that independent counsel on these matters is highly recommended.