Nationwide we are seeing reports that the number of Existing Home Sales have Declined for 11th Straight Months; and want to show our readers what we are seeing in the local Vancouver Washington market, and to provide a couple of additional reasons, beyond the massive rise in home loan rates, why we are seeing fewer home sales of late.
We have prepared the attached graph that shows the rolling-averages (3-month and 12-month) tracking the existing home sales in Vancouver WA:
We can see from the chart the existing sales losing their annual upward momentum around Spring 2022. This is also clearly a strong move to the downside such that the 3-month average never rose above the 12-month line; and ended the year at a point we haven't seen this low in 8 or 9 years!
Nationwide the annual decline was about 34% while locally the Vancouver number declined by 23.2% and Clark County WA by 23.6.% While we did not decline by as much as the national-average, this still is a major change to the local real estate scene.
When the real estate industry experiences a "Shock" such as the rapid and significant rise in mortgage interest rates, this will cause many home buyers that require financing to easily move from Qualified at a lower rate; to become Unqualified at the higher rate; and thus, become a significant reason home sales slow.
One Class of home buyer that has reduced their activity in our market is the iBuyer (see this article for a great iBuyer description). Over the past 24 months the RMLS statistics show we averaged approximately 20+ properties sold per month from the Wall Street owned iBuyers: Zillow, RedFin and OpenDoor. With Zillow (the largest trackable-player in our area) and RedFin leaving this class buyer, this takes about 20 transactions per month out of the home-sales statistics going forward. There are other iBuyer-types that we cannot easily track (you know, the guy that advertises on TV; and the folks with the cheesy yellow handwritten signs on the street corners) but we suspect the local-region-based iBuyer is backing off as are the Wall Street financed companies.
Another reason, at least in the near-term, we are seeing fewer transactions is the strong consistent decline in New Listings. Translated this is a signal that existing home owners are holding off on selling their home (or, an Investor selling their property); leaving fewer options for home buyers to choose from.
The above chart from RMLS shows that starting in July our market very quickly produced about 200 fewer listings that month compared to what we saw in each of the previous two years; and started a trend that continued through the rest of 2022!
As active real estate brokers in the Vancouver Washington market, we've talked with many potential sellers that have said either "We won't sell until we find and purchase our next home" or, our listing's buyer had waited until their current home sales was totally locked up (past Inspection and other major Contingencies)!
In sum, our Clark County and Vancouver real estate market has been rising for about a decade, and is now going through a major Correction. There are many moving parts to the changing market, and this article is meant to point out only a couple of those parts. When will the Correction be sorted out and end - no one knows for certain at this point!
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