Another week with a serious bump in inventory has padded a market that just six months ago was the tightest ever recorded in Clark County. Many people and even some agents are jumping the gun a bit thinking “uh oh” market is changing. This is not a negative thing. If it continues for months on end, then yes we could see a correction, but when inventory levels are at 12 days rather than the typical 4-5 months, that is as big a problem as a bloated inventory of 8-12 months. Among the new listings are some in Viewpoint and Riverside which tend to be hard to find.
The general public is almost always late to the party. As interest rates perked up this spring, sellers got nervous and decided to sell. We are a long ways away from a surplus of inventory. I’m not saying we won’t get there at some point, but honestly there is no crystal ball on this issue. The economy is weird right now. In 2020 the pandemic was an anomalous hit to what was a major boom. Now the federal government has self inflicted wounds to the economy and we see this inflationary cycle coming in. People over 50 have seen this before 1975-1983 the tactics didn’t work then, nor will it work now.
Real estate however can weather this shockingly well. Other industries not so much. No one really knows what this market will do but the sky is not falling, at least not yet. It should be noted that people who own real estate free and clear of debt or close, need not worry about equity as much as those with large debt loads. When prices fall, they tend to fall universally across the whole market spectrum. So long as a seller has enough equity to close the sale without bringing in cash, they should be able to move and find a suitable replacement in their new neighborhood or city. If their current house drops 10 percent the new house they buy likely did so as well. The only real “threat” is sellers with little equity as a market adjustment down could render them unable to close without bring cash. Those sellers are advised to stay put and ride out any correction as they are usually short lived. From 2002-2008 we had a boom market followed by the biggest bust since the Great Depression 2009-2012, followed again by a boom from 2013-2022. The booms tend to last much longer than the busts int he real estate business.
The Vancouver urban condo market added listings at a 3:1 pace against new pending sales. This extra inventory eases pressure on buyers and acts as a check against aggressive sellers with overpriced listings. Price reductions are coming now on some of the listings that were priced above market. Buyers are not taking that bait any longer. But well priced units are still getting full price or very close to it, so this is a healthy situation right now. Hopefully the fed won’t screw it up.
In other news: I noticed that several Kirkland Tower units have officially closed so it seems that they finally got that building ready for occupancy. The adjacent Indigo Hotel is expected to open this fall. I am not certain how that effect the homeowners in Kirkland that are supposed to have access to the hotel amenities such as concierge, room service, etc. I’ll look into that and report back later.
Downtown Vancouver and the Waterfront are still bustling with construction activity as several large projects have started recently or are about to break ground. Zoom Info is building their twin high-rise HQ offices on Blocks A and C at Terminal One. That should commence any time now. LPC-West is also planning a two high rise office and residential project on Blocks 1 and 2 at the Waterfront. That project has cleared all the land use and design review. I would guess that those two towers will come a little later as the staging area space is tight on that east end right now. Meanwhile on the west end of the Waterfront, Block 17 is nearing completion, Block 18 is wrapping up excavation, and Block 19 is likely to break ground soon. Hurley is already underway at 400 Washington with their full block 180 unit project now called Adera. The Aegis phase one towers are nearly complete near the Academy and they will likely break ground on phase two early next year.
I have said this before and I’ll mention it again here; The city is well advised to push these larger projects through the bureaucratic pipeline before any significant funding crisis arises. These projects produce ample revenue for local governments as well as thousands of high paying jobs that support our local economy. Investment real estate can benefit from a long term bear market on Wall Street. But if the wheels come off the wagon funded projects will continue through a downturn and can keep the local economy going in tough times. This was extremely evident in Seattle from 2009-2012 where the real estate market saw only a mild to medium downturn, despite the rest of the West Coast getting punched in the face over and over with a hard crash of prices and job losses.
Hopefully our city leaders are looking at that recent history and applying it locally, it seems they may be doing just that.