Inventory Pops Up Again!

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.

After Several Weeks of + Inventory, Shrinkage Last Week.

Yes inventory spent the last several weeks growing for what looked like a new trend in Downtown Condos, but last week saw a return to the ‘squeeze’ with a 3:1 ratio of pending sales to new listings. I think this is likely more of an anomaly as the Greater Downtown condo market is a fairly small sample size. Wild swings in direction can and do frequently happen with concentrated target data like this.

Meanwhile on the Waterfront the former location of Barlows Public House is now open as The Waterfront Taproom. The Barlow’s brewery on Mill Plain changed hands a couple of months ago and now the space where the Pub was overlooking the Grant Street Pier above Twigs is open again. There is no connection apparently between the former Barlow’s brewery now called Vice Beer and the new Waterfront Taproom. I really liked that space Barlow’s had so I look forward to visiting the new establishment which opened this past weekend.

I will be adding new content on this site called: Vancouver’s Urban Architecture soon, be on the look out for it. Vancouver has a broad range of architectural styles dating from well back into the 19th Century to the latest modern designs. We will explore some of the more notable buildings over the next several months.

Our city center is already one of the hottest urban neighborhoods in the Metro Area and has been launched in to stardom as a tourist spot with cruise ship landings, multiple urban hotels, and scores of new restaurants and shops. It is hard to beat the combination of big city vibes with small town charm that seem to merge seamlessly in Vancouver’s urban core. That’s is a rare gem combo that many cities covet and we have.

Happy Birthday USA!

Yes it is the fourth of July and that won’t stop the condos from changing hands… well they won’t change hands today 😉 Activity continues as it has over the last several weeks with new inventory outpacing sales. That said inventory levels are still fairly tight but the trend is suggesting that soon buyers will have some breathing room.

Hurley is underway with the new 6 story 186 unit apartment building taking up the full block at 4th and Washington. The excavation work for the Springs Living 12 story project on Block 18 is at least halfway done, perhaps a bit further and a tower crane to support the project will likely rise up this summer. Zoom Info’s new twin high-rise project will likely start construction in the next few weeks as that site on Terminal One blocks A and C is all prepped to go.

The Waterfront and Downtown should remain busy over the next few years as these funded projects start construction. OK that’s it for me, time for BBQ, Fireworks, and other assorted Independence Day classics.

Can Vancouver Grow in a Shrinking Economy?

As things continue to tighten up with inflation on the rampage and the Fed trying to throttle the economic engine, the question of whether all the exciting progress in America’s Vancouver can continue under these conditions.

The last time we had a recession it was a pretty big one. That downturn was much different than what we see now. There had been a buildup of bad loans in housing that led to the near collapse of the financial markets. In fact, several really big banks effectively failed, national giants like Wachovia and region giants like Washington Mutual succumbed to the weight of a bad portfolio of loans.

That is not the case here. Lenders have been under much tighter federal guidelines regarding mortgages, and this scenario is more about runaway federal spending than unstable banking. COVID 19 saw the US government make the largest deficit enlargement since WWII and that has simply pushed too much money into the already bloated system. I feel like we are in for a soft landing on this, but of course anything can happen.

The stock market has been pretty fat for several years and a major correction was not only inevitable, the powers that be knew it was coming. It should be noted that money flows and when it leaves one market it flows to another. Many investors are currently holding cash and generally holding cash is temporary. That cash will flow somewhere and real estate is often the place it lands when Wall Street takes a beating. Large projects like the real estate development happening right now in Vancouver is ideal for parking cash in a volatile paper market. Real estate like its name implies, is “real.” There is a hard asset backing the paper.

Seattle faired quite well during the recession in 2009-2012. Real estate values there slowed down and even suffered some equity losses, but compared to the rest of the state and west coast they got off with not much more than a scratch. Seattle had such a roaring economy going into the recession and billions of dollars had already funded large developments that were underway when the wheels fell off the economic cart.

Vancouver could be poised for a similar scenario in this upcoming recession. The city is ripe for quality development and close to a billion dollars are already funded for projects working through the system. We still look like a sure bet for financiers looking to park cash to weather this new bear market on Wall Street. Our city leaders would be wise to speed up the bureaucracy and get these projects approved ASAP. Once funded they have a great chance to be completed and will provide good quality jobs during the downturn that will help soften the effects locally. It totally worked in Seattle last go round, it will work here this time.

I am about as optimistic as possible considering the financial climate is rather gloomy overall. Vancouver USA is great place to live and invest, and it seems investors lately are proving me right.

I’ll have the updated statistics for urban condos mid week; I am out of town today.

More inventory welcome sight for weary buyers

Again last week new listings outpaced new pending sales. This has been the trend over the last several weeks and with inventory levels coming off the tightest ever recorded, buyers can take a breath and actually feel confident their offer will be accepted. We are by no means in a buyer’s market, but we are headed towards neutrality. I am seeing overpriced listings with some price reductions each week.

Interest rate hikes have already put a wet blanket on the red hot market, but prices are still holding and sellers can still do well as this summer approaches. Sellers need to lower the expectations of large price increases as the flattening curve is already a reality. Summertime in Downtown Vancouver and along the Waterfront is always exciting and filled with activities. Urban condos benefit from that buzz that creates extra marketing power.

Hurley is now underway at 400 Washington on the full block 6 story, 186 unit apartment building. A new 7 story mixed use proposal will be pitched at the pre-app conference later this week for a 3/4 block on East 13th and Main. Demand for urban apartments and condos continues to be strong enough to attract investors and that bodes well for our city center even as darker news looms over the economy in general.

It appears that Zoom Info is ready to break ground on their giant multi-block double high-rise project to house their new HQ at Terminal One. The entire area is fenced off and recent improvements to the BNSF access ramp will allow the room for developer LPC West to get started.

The Columbian recently published an article about a new Pasta restaurant coming to the Waterfront. Grasse is a Portland restaurant that has acquired a lease in the Riverwest building on Block 6 and tenant renovations are underway now. That will be a nice addition to the current slate of restaurants at the Waterfront.

Things are still rosy in Vancouver USA.

Western States Pondering New Parking Ratios for Housing

According to a recent article in the Columbian, Oregon and California are considering serious changes to requirements on parking ratios in urban areas. Our southern neighbor seems to be leading the charge. At this point Washington appears to be a spectator in the debate. This concept however could lead to lower cost housing for those willing to forego the car or at least to share a car between multiple residents.

Locally the commission charged with oversight for the new Interstate Bridge project has approved rail transit connecting Downtown Vancouver with Portland’s MAX light rail system. This will extend the Interstate Transit Corridor into Vancouver and allow for high density development with fewer parking spaces to actually work.

But there is more to it than that. Downtown Vancouver still lacks some essential services in the core. Although New Seasons is erecting a supermarket in Midtown at 15th and Main, that is still quite a long walk for those living in lower Downtown and on the Waterfront. The city would need to fast track developers that are willing to bring in the services that remain outside a comfortable walking distance and perhaps create a Downtown/Uptown trolley either on rails or wheels. All of this could be done to support more urban housing in the city center and less dependence on cars.

It is good to see the government at least looking at alternatives and that is a good thing. It is also important to remember that there is only a small segment of our population that is willing to give up the independence of the automobile. I could see a thriving share-rental system in large buildings with say a dozen cars that belong to the landlord or HOA and can be “borrowed” by residents for those occasions when they need to travel where public transit is unavailable or extremely inconvenient. It will be interesting to see what becomes of these ideas.

While I am on the subject of transit and the new bridge; I can’t say it enough, our leaders need to insist that the new bridge have some aesthetic accoutrements to keep the entrance to our great city beautiful. The city and county also need to put their foot down on Tri-Met and insure that our public transit entity(s) dictate the policies on MAX on our side of the river. Stepping off the soapbox now 😉

Condo activity continues to accelerate with inventory gains outpacing new pending sales. The shift is healthy and at this point not alarming.

AC Marriott at Terminal One Set to Open Next Week

It took a while to get built what with the extensive ground work, COVID 19, along with supply and labor shortages. According to the Columbian, Vesta Hospitality expects a soft opening on June 15th for the new hotel that will overlook the new Vancouver Landing park and cruise ship dock. There will be a restaurant and bar as well as a 4th floor patio overlooking the river. This is the first project to complete at Terminal One. A groundbreaking for the twin high-rise project for Zoom Info should happen soon and later on he new dock, market and additional buildings that will complete the vision at Terminal One.

Meanwhile next-door to the west a large high-rise apartment tower is set to rise and ground breaking on that could be a soon as six months, depending on how staging goes for the Zoom Info development.

On the condo front, inventory rose for the third straight week. Prices are holding but overpriced units are seeing reductions on the MLS for the first time a handful of years. The buyers are not biting on listings that are at the top of the range like they were when inventory was at the tightest levels in decades. We are still well into the seller’s market however as inventory will need to fatten up quite a bit before buyers take control of the market. For condo buyers, now is a good time to get in as seller’s will become a little more flexible and rates have the potential to rise further as the year progresses. With inflation firmly in place lower rates are not in the cards right now. Sellers are also on the hot seat. With rising rates and increasing inventory the top of the market could be right now.

Vancouver USA continues to dominate the regional area with its amazing waterfront, fantastic downtown, and an economic boom that seems to be as strong as ever.

rod@sonic.net or 360-737-4600

In Memoriam

Today is Memorial Day. We honor those that gave their lives in defense of our country. These men and women fought for the values and freedoms we all enjoy and they were people of all races, nationalities, classes, and backgrounds.

Some wars are just others not so much, but the soldiers that fight them are invaluable members of our society. When the war is found to be unjust, our anger should be aimed at the politicians that start them not the soldiers that finish them.

I am grateful that over the eons we have been able to rise to the occasion to defend our shores as well as those of our allies. May we continue to do so and in so doing learn from past mistakes to ensure that our soldiers are fighting for freedom and justice, rather than purely political causes.

I will return next week with an update on local projects and urban condo trends in Vancouver.

Inventory Levels Finally started to creep up

Over the last few weeks I have noticed a gain in inventory each week. Although this normally is a sign of a slowing market, in our case inventory has been so tight it has actually hurt the market rather than help. A little easing on inventory is a good thing. However we all should pay attention to this stat because there comes a point where inventory levels can reach critical mass and lead to falling prices.

I have mentioned numerous times in recent months that the strong seller’s market has been almost entirely built on a lack of supply rather than an abundance of demand. As supply levels increase and lending rates rise, supply is increasing at the same time demand is falling.

For urban condo owners in America’s Vancouver we very well may have peaked for our units in the city center. So peaking is not necessarily the precipice of doom but could simply mean that prices may soften a bit of the properties may sit a little longer before receiving offers. This is a normal cycle. But for those looking to capitalize on the highest possible price, now could very well be the time. One never knows how the future plays out, but the data shows trends towards a slightly more friendly market for buyers.

I was unable to catch the CCRA review of the Waterfront Block 21 Modera project but I will review the video feed as soon as the City releases and report on how the CCRA ‘ruled’ on its design.

Kirkland Tower had a pending unit return to active this past week. It looks like occupancy is delayed again until July and that may have been the last straw for the buyer, or perhaps the interest rate got too high and the buyer was priced out. Kirkland has had a little tougher time than other builders in getting this project to the finish line. It will be the crème de la crème when complete, but they better get it done soon, financing conditions are worsening and the stock market took a sniper shot to the head this month.

Over all things remain solid and secure in Downtown Vancouver’s urban market.

High End Condos Still Hot

A number of recent listings in the very high-end Tidewater Cove have had little trouble selling lately. Despite higher rates and an inflationary cycle, these units seem to be doing well. The question is who is buying them and where are the sellers moving? If you are curious about this condominium community there is a page dedicated to it here: Tidewater. These units tend to sell well above $1 million and some of the larger units in excess of 4000 SF fetch many millions. Several smaller and mid size units are listed and some are pending, yet a few more closed in the $1-$2 million range recently.

Where are these new buyers coming from? Some from Portland as we have all seen a bit of an exodus from Rip City. Some could be renters in the many new luxury apartments that have gone in over the last few years. They are making the decision to stay with a commitment to buy rather than rent. Vancouver’s urban core and waterfront areas extending east to Tidewater are very desirable locations for many reason discussed ad-nauseum on the site.

I can’t help but wonder if at least a few of these recently listed ‘mega-condos’ are owned by people moving into Kirkland Tower in the next several weeks. Kirkland will be the most exclusive and unique condominium project in the entire metro area as the only true condo-hotel lifestyle setup. Portland’s Ritz-Carlton will be the second when it opens in late 2023 or early 2024. Kirkland is smaller than the Ritz, but frankly is in a better location at the Heart of the Waterfront.

The luxury market success tends to help boost commerce and business that all residents can take advantage of. Here’s to the success in Vancouver’s urban core.

This Thursday the CCRA will do its design review for the Block 21 Waterfront ‘Moderna’ Project. This will be the tallest structure thus far on the Waterfront and the largest apartment building expected to have roughly 270 units on 14 floors. I should have more information next Monday.