Clark County Housing

Two years after the 2015 update to the comp plan, Clark County population growth is almost two years ahead of schedule and growing 1.7 times faster than planned.   At this rate the County will reach the 2035 population target of 577,431 more than eight years ahead of schedule. The County’s population growth has exceeded the County planner’s projections by 10,700 (or 93%) after only two years. The County is on track to completely run out of land for housing within 10 years. Other than that, the Growth Management Act appears to be working quite well in Clark County.

The OFM just released their April 1, 2017 population and housing stock estimate.  They do this once a year.  Given the apparent shortage of housing in Clark County, I was particularly interested in the ratios between the population and numbers of different types of houses in Vancouver and Clark County. As most people in the industry would have guessed, there are far fewer homes-per-person in Clark County and Vancouver than there have been in many years.  Once again, the builders did not build enough homes of any kind to keep up with the demand driven by population growth. Below is a summary of some of the information I pulled from the report: Clark County: Population Up 2.17% ·                      Population in 2017:  471,000 ·                      Increase of 9,990 people Housing Units Up 2.13% ·                      Housing Units in 2017: 181,287 ·                      Increase of 3,792 housing units (most since 2006) Clark County Housing Shortage

The home affordability ratio in Clark County dropped seven points last month, from a healthy 106, to 99, which is one point above the average affordability level since 1980.  The drop was driven by an interest rate increase from 3.54% on November 3, to 4.08 on December 1. The red bar at the edge of the chart shows what affordability would look like if interest rates were to increase to 5%.  Keep in mind that interest rates below 5% are a novelty as you can see from the dashed line running through the chart. It remains to be seen what impact this will have on home sale volume or pricing going forward.  October was an amazing month.  The average sale price was $352,600.  87% higher than the market bottom on January, 2012.  And 15% higher than the peak of the 2007 bubble!

The County's 20 year supply of residential land will last about 11 years at the current pace of population growth. This chart shows how long it will take to consume the 50,468.3 housing units that the County assumes could be developed on the currently available residential land, using 3 different population growth assumptions.  Assuming the current rate of growth, we will be out of land for new homes by 2027.  Using the County growth rate, we will be out of land by 2033.  In any event, there is not adequate supply for the next 20 years. Here is how I figure: Clark County's Vacant Lands Inventory estimates that there is enough residential land to develop 50,468.3 houses.  This estimate was prepared by Clark County and used for the 2015 Comprehensive Plan Update.  County Council assumed that the annual population growth countywide would be 1.28%.  They assumed that there would be 2.66 people per household and that those 50468.3 houses would accommodat

The OFM just released their April 1, 2016 population and housing stock estimate.  They do this once a year.  Given the apparent shortage of housing in Clark County, I was particularly interested in the ratios between the population and numbers of different types of houses in Vancouver and Clark County. As most people in the industry would have guessed, there are far fewer homes-per-person in Clark County and Vancouver than there have been in many years.  Once again, the builders did not build enough homes of any kind to keep up with the demand driven by population growth. Below is a summary of some of the information I pulled from the report: Clark County: Population Up 2.0% Population in 2016:   461,010 Increase of 9,190 people Housing Units Up 1.58% Housing Units in 2016: 177,495 Increase of 2,755 housing units   Clark County Housing Shortage Fewest housing units per person since at least 1990 Fewest single-family units per person since 2000

Home prices in Clark County are increasing rapidly.  In many ways this market feels like the 2005-2007 market.  Houses listed for sale are generating multiple offers within a few days.  They are generally selling for asking price or above.  People don't seem to care about over-paying, because they assume the house will be worth more in a few months. That said, there are significant differences between this market and the 2005-2007 Market.  in 2007, home prices were unaffordable relative to median incomes and interest rates.  There was also an oversupply of single family homes.  Now homes are relatively affordable, and there is a shortage of all types of housing. In 2007, the median income earner could only afford 77% of the average home. Now in 2016, the median income earner can afford 111% of the average home. Homes are much more affordable today. This is due to rising income and reduced interest rates.  See the chart below That is a major reason that home pri