Housing poised for recovery

Marketplace: Housing poised for recovery
Saturday, March 14 5:15 p.m.
BY JULIA ANDERSON,COLUMBIAN BUSINESS EDITOR
Julia Anderson
Scott Mikel

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Two longtime Clark County housing industry professionals — one on the construction side of the business, the other on the selling side — see reasons why our housing market is poised for some sort of recovery.Builder Jon Girod of Quail Homes in Vancouver said last week that his company has seen an increase in first-time home buyer activity in the $180,000 to $280,000 price range."Prices have come down enough that our research shows about 19 percent of area households can again afford to buy a home," Girod said. "That has been about the average for the past 20 years. With the $8,000 Obama tax credit to first-time buyers, home construction well below averages and (federal) bailout money in the pipeline, it looks like home building and sales might improve."Girod’s graphs show that housing starts spike after big downturns such as the one we are experiencing. He expects that to happen again."At the end of 2008, we saw home sales increase in six states including California," he said. "We tend to follow." He sees inventory and prices stabilizing and buyer interest improving. "Home prices here increased at an average rate of 8 percent a year from 2000 to 2008," he said. "That is twice as fast as the average increase of the 10 years from 1990 to 2000. The market had to have a correction of about 25 percent to get back to the average. That’s about what we’ve had."In the past year, the median price of houses sold in Clark County has dropped 8 percent to $239,000. But in upper-end categories — $500,000 and above — there have been more dramatic price declines.Meanwhile, Clark County Realtor Scott Mikel also has been tracking data that give him hope for recovery.Mikel looks at pending home sales, where a buyer has officially made an offer on a house. He compares pending sales to the total number of houses for sale in the market. A year ago, the ratio was heading into deep negative territory; this year the market seems to be clawing its way back.Mikel said Clark County housing hit bottom in July 2008 when more than 5,400 houses were for sale here. That total has dropped to 4,180. "Yes, there are a lot of foreclosures and yes, some people have pulled their homes off the market," he said. "But if we get below 4,000 that will take us back to 2007."Pending sales grew by 11 percent in February and closed sales increased by 10 percent from January, according to the RMLS multiple listing service in Portland."Since a large part of the economy is driven by consumer confidence and attitude, I think we are missing an important component if we just report the transfer of title that is often old news and not people’s ‘intent to purchase,’ which is in many ways a better indicator of current confidence," Mikel said.Both Girod and Mikel have been in the business a long time and use numbers, not emotion, to plan strategy. Both see a housing recovery on the horizon.