We regularly post Market Reports to show the home sales activity in Clark County. Throughout the year we show activity in many towns in the RMLS, reporting more frequently on the areas where we concentrate our efforts – East County – Camas, Hockinson, and Washougal. We use a pictograph to show Active, Pending, and Recent Sales, including average prices, etc.
At the bottom of our chart, we show the “Annual Increase in Sales Price” – which is derived from the RMLS monthly “AVG Price % Change” for that area.
The RMLS defines this as the rolling average sale price for the last 12 months compared to the average price 12 months prior. Monthly reports include this change for all of Clark County, as well as specific RMLS areas.
We started to notice an interesting change in this indicator for the past several months. So we decided to plot it. Since around 2011, the AVG Price % Change for most areas kept going up year after year. That continued until 12 months ago. Now the numbers show a different trend – leveling off, or even heading down slightly.
What does this mean? The rate at which prices were going up is now cooling. Average price increases in most areas are still positive, just not as high as previous years. Here are the trends in the areas where we focus our efforts:
Simultaneously, inventory, although still low, has been creeping up slowly as more new construction comes on line in the area.
A quick comparison of the larger Portland market (based on RMLS numbers) shows the same trajectory down in AVG Price % Change. A more comprehensive indicator – the S&P CoreLogic Case-Shiller Home Price Index also shows that, for the Portland metro market (which includes Clark County) there is a year-over-year decrease in the rate of home price increases.
So, are we entering a cooling off period in the area? In addition to a lower percent price change, overall closings are trending down. This could, of course, be due to some of the Fed’s interest rate hikes last year. The promise of no new rate increases in the coming months might boost overall sales again. Plus, inventory is going up as new construction adds more homes.
The message for Sellers is, when listing your property be very realistic about your pricing. Inventory is still low, but qualified buyers are clearly expecting lower prices than last year. Likewise, buyers should be aware of the opportunities as inventory increases.
For now, it appears to be a slight (and needed) pricing correction in the market. Due to the low inventory, we are still in a Sellers market. Buyers who find a home they love, need to act quickly and realistically with offers.
We don’t expect wild drops in pricing, but the trend appears to be downward for now. It will be interesting to see how this plays out as we continue to track and report on price changes in the coming months.