Change Is In The Air!
Posted January 20, 2019 in Real Estate Trends
Anytime the real estate market shows signs of change, people start worrying about a repeat of the year 2008. In that year, we saw real estate go off a cliff! The housing bubble burst. Eventually, average home prices dropped $100,000 from the high point reached in 2007. Average time on market (listing until sold, per RMLS—Regional Multiple Listing Service) went from 44 days to 156.
Are we headed to the cliff again? Is another bubble about to burst? Caution is wise, as there are similarities between 2008 and 2018, but there are also big differences that should allow homeowners and homebuyers to sleep at night. The similarities? From 2000 to 2008, average sale price increased 74% ($175,400 to $305,500, also per RMLS). Guess what the increase was from 2011 to now: 85% ($212,100 to nearly $400,000). It wasn’t just the spike in values that led to the 2008 cliff (or bubble burst), though. As detailed in the movie “The Big Short,” it was no-money-down loans and no-document (“liar”) loans that allowed borrowers (many with poor credit) to buy multiple houses with the hope that rising values would make it a good investment. When values stopped rising, borrowers simply stopped paying.
What’s different this time? Our local increase in values has been driven not by liar loans (“trust me, I make a gazillion a year, so let me buy six houses”), but by growth caused by legitimate factors: increasing employment and in-migration. Loan qualification requirements are stricter than before—it’s much less-likely than in 2008-2011 that homeowners will “walk away” from houses, even if home values don’t increase as quickly. Even as interest rates adjust, there’s every reason to believe that Clark County real estate will continue to be a great investment, especially when viewed long-term or when compared to renting—it’s more important in this changing market to consult with expert Realtors and lenders to make sure you are valuing real estate properly.
Clark County Title is ready to team with you and your Realtor and lender to accomplish your real estate goals in 2019. Please call our friendly, professional staff if we can assist you.
From your friends at Clark County Title,
Clark County Title
1400 Washington St, Ste. 100
3200 SE 164th Avenue, Ste. 219
Vancouver, WA 98683