Pacific County’s housing market has been distinctly cyclical for decades. There’s at least some cause to wonder whether ongoing demand for housing by residents might dampen these cycles, and what this could mean for local communities.
Many dwellings — especially vacation homes — usually come on the market during sharp economic downturns. Just after the 2008 nationwide housing crash, the county’s inventory of unsold houses probably reached at least 1,000 out of a total inventory of 15,000.
Since then, the overall inventory has grown over 16,000, with fewer than 200 of those on the market in mid-2019, according to the University of Washington’s Center for Real Estate Research.
As of Sept. 30, there were 186 active residential listings in the county, according to Northwest Multiple Listings Service, a decline of 18.4% from last year.
Sales, prices up
As you will read in this month’s edition of Coast River Business Journal — inserted in today’s Chinook Observer — the county saw a seasonally adjusted 11.5% gain in home sales and an 18.7% increase in median sales price in the spring of 2019, according to UW’s analysis of this April through June. (NWMLS’s more current September statistics show an increase in median price of only about 1 percent over the prior year — perhaps signalling a slowdown, but it’s too soon to say.)
Overall, based on the present rate of sales, NWMLS reckons Pacific County has slightly more than a four-month supply of houses. However, supply is much, much tighter on the more affordable end of the spectrum. Any reasonably well-maintained property below about $200,000 is snapped up within several weeks of coming on the market. Anything above $500,000 faces a lengthy wait — nine months on average, according to UW.
This reflects the county’s demographics. Censuses show we have among the highest average age in the state, with retirees (and the semi-retired) at all income levels coming here for mild weather, pretty scenery, good outdoor recreation and housing that remains relatively affordable by coastal standards. Working-age people here tend to make considerably less than they might in the region’s urban centers, but typically have enjoy the slower pace, smaller crowds and traditional natural resource occupations. For most, $250,000 is still a heck of a lot to pay for a house.
Overall supply in the predominantly western counties in the NWMLS database is quite a bit tighter — only two months. And the number of active listings is down 19.4% for the entire area— choices are getting slimmer throughout the multiple listing service’s counties. Real estate sales comprising a significant economic sector in our county, this translates into fewer potential transactions, with consequences for Realtors, bankers, title companies and others.
On the positive side however, in September there were 62 pending sales in the county, up 24% from 2018. New listings do come on the market — 44 in September, down 10% from 2018 — but the affordable ones get snapped up.
Being the biggest assets most of us possess — or at least share with our mortgage holders — housing is intrinsically interesting. The current market in Pacific County is pretty healthy in some important ways. Few owners are still underwater on mortgages taken out before the 2008 crash. If you own a house, chances are it has gone up in value quite a bit — doubling from a median of about $102,000 in 2012 to $204,000 so far this year. Houses priced near or below the median sell fast.
On the other hand, affordability has deteriorated a bunch in recent years. Though still one of the best places to buy a home in Western Washington, the county is no longer the incredible bargain it once was. At about a two-hour drive from Portland International Airport and at least three and a half hours to Seattle, we once were near the outer reaches for some visitors — and pretty farfetched for commuting. The number of miles hasn’t changed, but skyrocketing urban housing costs have certainly started to change the equation.
Deciphering what lies ahead is fraught with uncertainty. The nationwide economy shows signs of slowing — but our regional economy remains strong, though with some doubts for Boeing and other exporters.
For now, the Pacific Northwest continues to be a magnet for job seekers from elsewhere in the U.S., with Washington state expected to add around 860,000 more people between 2020 and 2040. They’ve all got to live and vacation somewhere, and our coast will experience additional housing pressure.
It’s been good seeing new residential construction in the county this year, something that should start soaking up some of excess demand. What it might really take, though, are additional four-house short-plat developments, or even larger long-plat subdivisions to begin catching up with the need for middle-income housing. This is a tall order in a place so confined by wetlands, forests and large water bodies. Some degree of cautious modification to state growth management rules and county zoning may be necessary — particularly as the century advances and tidal intrusions become more likely in low-lying areas.
All this argues for constant examination by state, county and city leaders. We live in a free-market economy, so housing must necessarily mostly come about through independent personal decisions. But government can help make sure that regulations are streamlined, fast and understandable.
It’s important to keep infrastructure including streets, water and sewer systems up to date — but not so overbuilt that already-high monthly bills become unbearable.
If we really want this place we love so much to remain affordable for our children and grandchildren, it’s vital we think ahead and act now.
Editor’s note: For an interesting related story about what’s going on in Port Townsend, see https://www.seattletimes.com/pacific-nw-magazine/1006-port-townsend.