Recently-constructed homes in Battle Ground.
Housing market trends have national media calling it the start of a broad slowdown of the market. Real estate agents are seeing some early impacts in Clark County but overall the market remains strong.
A July 26 Bloomberg report had a headline calling recent housing market trends as pointing to “its worst slowdown in years.” A Business Insider article a few days later quoted an economist who said the overall trend “raises a large red flag” on the nation’s economy as a whole.
Locally, however, the rhetoric is less doomsaying. Real estate agent Luke Loiselle says that those who are a part of his Keller Williams Realty team have noticed some “softening” of the market.
“I would not call it a crash, or any other alarmist term yet,” Loiselle wrote in an email about what he has seen, “but we are definitely seeing more inventory, more days on market and more price reductions. Don’t get me wrong; we are still rapidly accelerating.”
Clark County’s connection to the Portland market still makes it one of the hottest in the country. In an interview with The Reflector Loiselle provided a couple of metrics with some slight shifts that altogether made for a noticeable — if not huge — slowing of the local market.
For this year Clark County was on track for just shy of a 10 percent annual appreciation of houses, a slight decrease from the 10-plus-percent rates of prior years, Loiselle explained. He added that overall inventory has increased, looking to be about 10 to 20 percent greater than last year.
“(That) sounds like a lot,” Loiselle noted, but when average inventory levels are around 2 months’ supply, as they are currently, compared to the neutral baseline of 6 months, percentage increases weren’t as great. Months of inventory refer to what is currently available on the market without new additions — it would take that many months to run out of housing supply.
List-to-sales prices have also made a slight swing of about half of a percentage point, Loiselle said, from 99.7 percent last year to 99.2 percent this year, meaning properties are selling slightly less than what they were listed at.
Further adding to a housing market slowdown is interest rate creep, Loiselle said. According to data from the Freddie Mac Economic Housing and Research Group, rates have risen steadily this year for 30-year fixed home mortgages, now currently sitting at about 4.5 percent.
Loiselle said that every percentage-point interest rate increase translates into a 10 percent drop in buying power. Though the Federal Reserve’s raising of its interest rates to banks does correlate to increased rates for consumers, Loiselle noted that mortgage rates can fluctuate off of speculation on what the Fed may — or may not — do.
All those small fluctuations in the market have led to feelings of a market slowdown. Loiselle said although the market softening is across the board in Clark County properties, some areas where it’s more sluggish were places farther out into the county as well as pre-existing homes that are near new construction similarly priced as buyers can get something new for not much more.
Loiselle said there were some advantages for those looking to sell in the current market, if they were planning to buy a new home as well they can take advantage of interest rates that are trending upward. First-time homebuyers could also benefit, given that it would take a while for the slowdown to lead to a better deal than what is current — some four to eight years.
“If that is your goal, be OK with waiting for many years before you purchase,” Loiselle said.
For those looking for a home sooner, now might be the time.
“Waiting until next year, you are only going to see higher interest rates and higher prices, because it will take time for that higher interest rate to adjust to the prices coming down a bit,” Loiselle said.
