April Showers Bring May Statistics

Posted May 6, 2024 in Real Estate Trends

Scott Hogan, Clark County WA real estate agent

Housing is getting more expensive. Breaking news, right? The question is “why?”

The answer may be that too few housing units are being built to accommodate Clark County’s job growth. NW Partners for a Stronger Community is a local organization that has contributed to this conversation by retaining a firm called Competinomics LLC to analyze employment and housing numbers. Their report was just released, and I’ll share some details in this column.

Job growth has been robust. More than 46,000 jobs were added in the last 10 years. Median household income went from $58,000 in 2010 to $90,000 in 2022. Poverty decreased from 12% in 2012 to 8.9% in 2022. The problem is that the cost of housing has increased even more than the rise in incomes. And, while the goal under the County’s Comprehensive Plan is to add one unit of housing for each new job created, that hasn’t happened—and it’s not even close. The underproduction of housing has been as high as 11,000 units in 2019.

Supply and demand. With tight inventory and too few new housing units available, rising prices have been the result. But the free market is supposed to find a balance, right? Supply increases to meet demand? Why has that not happened? The answer is the cost to create new units. Raw land is more expensive, as are lumber and labor. Also, state and national homebuilder associations have both said that complying with increasing regulation has added as much as 25% to the cost of housing, split between developing lots to build on and actual construction.

A few more numbers: office vacancy rates in Clark County range from 7.4% to 8.9%, compared with 22.5% in Portland. Comparing downtown Vancouver to downtown Portland is even more stark: 3.1%-5.8% for Vancouver and 25.3%-37.6% for Portland. Industrial vacancy rates have been quite low as well, increasing in the quarter just ended because of new space just added to the market, which caused it to rise from the recent average of 1.6%-2.6% to 5.3%-5.8%. Manufacturing vacancy rates are super-low at 1.3%– a real problem since those are the types of jobs we want to attract.

Solving the problem of housing affordability has to begin with understanding the root causes. The report I’ve discussed in this column emphasizes that it is not just housing production for lower income-earners that has lagged behind job growth, but housing in all price categories for even higher-income categories. In short, we need more housing to accommodate new workers and rising incomes.

The professionals at Clark County Title are happy to assist you in dealing with any aspect of real estate. Please call us to assist you in development, buying, selling, or refinancing of real estate.

Best wishes for an excellent month of May!
From your friends at Clark County Title,