Clark County’s high-end home buyers are testing the market once again after a two-year hiatus sustained by the recession.
And real estate agents who sell luxury homes — in the $700,000 and above price range — say the spurt of activity could provide yet another signal that the local economy is recovering. The return of high-end buyers, they say, is a sign that businesses are bringing well-paid executives into the market.
In Clark County, 11 homes and one condominium sold in the $1 million or more price range from October through April. That’s five times the two home sales in that range during the same months in the previous year, according to data compiled by Portland-based RMLS listing service.
“We’re seeing more businesses and executives moving into our community, and that’s encouraging,” said Linda Horowitz, a realtor with Windermere/Stellar Group in Vancouver.
Horowitz and other real estate experts point to a number of factors at play in the high-end market’s gradual recovery, including the lure of Washington state’s tax advantages for the wealthy and a reappearance in the past 90 days of “jumbo” — $417,000 and higher — mortgage loans at competitive rates.
But above all, most say softening prices that offer more house for the dollar are enticing buyers.
Reaching ‘realistic’ levels
That goes hand in hand with sellers who are now willing to accept a loss, as was the case for Kenn and Marie Bartley. The Bartleys have a sale pending on their 3,300-square-foot home in Brush Prairie’s posh Summer Hills subdivision. Their sprawling mini mansion, which offers majestic views, was listed for about $700,000, down significantly from $795,000, which the Bartleys paid for the property in 2006.
Marie Bartley views the loss as a necessary trade-off to provide Kenn with more family time by shortening his daily commute.
“Basically, it was about quality of life for us,” she said, adding that her family’s next home will be closer to Kenn’s new job in West Linn, Ore.
Similar trade-offs are being made by other sellers of high-end homes, too, as they agree to list at more “realistic” levels, said Nancy Kelly, the Bartleys’ real estate agent and a specialist with the Hasson Co. Realtors’ Vancouver office.
The discounts, real estate agents concede, were inevitable as prices rose beyond the comfort zone for buyers at all income levels.
In March, the median home price — half sold for more, half for less — was $210,000 for all homes sold, down 6.3 percent from the $224,000 median in the same month last year, according to data tracked by Riley & Marks appraisal firm in Vancouver. It was down 19.2 percent from the 2007 median of $260,000 at the height of the booming housing market.
Still, home values for the high-end market “took the brunt” of decline, said Dick Riley, an appraiser and Riley & Marks co-owner.
“If homes fall 10 percent over a period of time, that means a $200,000 house is going to lose $20,000, but a $900,000 property is going to drop $90,000,” he said.
The price declines have touched even prime waterfront properties.
Kelly has seen several homes that were listed for about $1.4 million close at several hundred thousand dollars less, or roughly 20 percent of the asking price — even though these properties were on acreage with waterfront views and offered popular amenities such as gourmet kitchens and luxurious bedroom suites.
For buyers, it’s kind of like a good version of the perfect storm, Kelly said. “The softer prices, the tax advantages and consumer confidence are all getting people to move off the fence.”
Southwest Washington has an additional advantage in this scenario. Horowitz said she’s hearing from wealthy Oregon residents who are looking to stay in the area but leave their state following income tax increases that went into effect in January. Measure 66 levied new taxes on Oregon’s wealthy individuals — those drawing annual salaries of $125,000 or more. Measure 67 upped the minimum taxes on businesses, hitting certain high-sales companies harder than others.
“It was kind of the final straw for a lot of people who are coming from Portland,” Horowitz said.
Maintaining momentum
How long the boost in activity at the high end will be sustained is still in question.
Some say sales in the high-end market won’t completely rebound until there’s widespread belief that home values have bottomed out.
Mike Lamb, a longtime broker who works for Windermere/Stellar Group in Vancouver, says he’s already seeing evidence that market-savvy buyers believe that time has come.
“At this point, there’s a growing sense that real estate is a good investment,” Lamb said.
He said investors are interested in real estate to hedge their bets against the predicted period of inflation that could follow recession.
“At least once a week, someone will come up to me and say, ‘I think real estate is where I need to put my money.’”
