Happy New Year!

 As 2022 comes to a close, I'm taking the week off :) May you have a warm and prosperous New Year!

Holidays at the Coast

It is hard to believe sometimes, but yet another Holiday seasons has arrived and with it a little snowfall along the coast. Is was fleeting to say the least but it did happen. Meanwhile the Holiday season brings forth opportunities for getaway trips to watch the storms or perhaps a mild Christmas along the seashore. I wrote this article a few years back and it still resonates today:

Yes December has arrived and once again the beach is in prep for holiday fun with a salty twist. Check out https://funbeach.com for events on the Long Beach Peninsula for the holidays and more in 2019.

They like to do fireworks on the beach on New Years Eve, that should fun. Many people like to watch the storms roll in during the wet and wild December. Although the weather can be rough and rowdy, the temperature tends to be 5° to 10° warmer at the beach than it is inland. I'd still bring a coat ;)

I wrote this general weather piece a while back check it out:

One of the stark contrasts with the weather and climate on the Washington coast as compared to inland areas like Portland-Vancouver is the nearly flat chart of average temperatures across the whole year. Yes if you like a fairly predictable temperature over the course of a whole year, it is hard to beat the beach. Of course it is wetter and windier at the beach but the temperatures are nearly static. Look at that chart!

In Long Beach, WA, there is only 16° of difference between the average high in July and the average high in January! Contrast that against Vancouver, WA where the difference is 36°. Or how about a place like Spokane, WA where the difference is an astonishing, 50°. You may find it interesting that Long Beach, WA has the same difference in average daily high as San Diego, CA! Yes San Diegans enjoy a tight 16° spread between summer and winter as well. Yes, I know the spread is the same but So-Cal is much warmer.

To be fair the coast tends to favor a cooler climate, but the moderating effects of the mighty Pacific Ocean keep the extremes minimized and the averages very predictable and pleasant all year long. Heat waves in the summer are very rare and when they do happen they are quite short lived. Deep freezes in the winter are equally rare and again very short lived.

So if you want to live in a place that doesn't really have a major shift in seasons then the coast could be the ticket. It is really a two season affair on the Washington Coast, a short 4 months of mild summer weather and long but very mild 8 months of winter.

The beach is affordable and fun all year round, check it out! 

Extended Summer Makes Way for Real Autumn

Well all that sunshine and tomfoolery has passed. Mid October with warm summer-like weather inland and to a lesser degree at the coast has finally yielded to Autumn. Rain, cooler temps, and wind have all returned and seemingly with a vengeance.

These storms can whip off some dangerous surf, so caution is always advised when near the ocean. But storm watching in the fall has the advantage of somewhat warmer temps than watching in the dead of winter. This can be a great time and it seems we have an extended period of rough and tumble weather coming our way. later this week snow levels will drop down around 2500 feet and temps even at the beach may struggle to break out above 50º. But then more mild temps return next week. 

Watching the mighty Pacific crash onto the shores of the beach is a magnificent sight and sound. The next two weeks should provide some great opportunities.

The real estate market has slowed down a bit in the wake of significant interest rate increases over the last several months. Many buyers are checked out of the market awaiting more favorable conditions. This leaves the door open for some softening prices and opportunities to get a beach house for a little better deal than just six months ago. Keep you eyes peeled for deals, you might just find one.

Can you Still Buy on the Peninsula for less than $250k?

Hmm, definitely not like the 'good ole' days of 5 years ago ;) But I did find a couple of cottages that were pretty cheap one even fell under that $250k mark. Keep in mind I am using the Portland based RMLS and there are more listings on the Seattle based NWMLS, but a search of Zillow or Trulia will find listings from either MLS system. 

First was this adorable cottage listed at $220,000. It features 1 bed and 1 bath with a whopping 440 square feet. Whatever will you do with all that room? It was built in 1987 and has been more recently remodeled. It is undeniably cute and is located in the rather pleasant Ocean Park area north of the more busy Long Beach. There is an HOA but it is only $53 a month and includes water, garbage, and security patrol. That is a screaming deal actually. This one is right smack dab in the middle of the peninsula so you have about a mile to travel to get to either the beach or the bayfront. This is a little slice of coastal heaven at a price within reach of regular folks.

I also found this one, not under that $250k mark but it is listed at just $265,000 and this little cottage is actually two cottages joined together to form two rental units. An enormous 690 square feet of spacious living awaits you here with 2 beds and 2 baths. Built in 1940 and in need a some TLC the real sales pitch is its location just a few of blocks from the beach access point. It is located in Long Beach close to the main drag so summers will be busy. But you can also walk to all the restaurants, shops, and attractions so that's cool. There is a clear rental income opportunity or a live in one side and rent the other. That $265k price is starting to look like a steal.

So value on the peninsula have skyrocketed in the last few years but there are still values to be found for the thrifty shopper. Keep you eyes peeled, these 8% rates are eroding the buyer pool and sellers are getting nervous. You can still have the beach dream so get out there and find it.

Which Coastal Area is really the Best?

I often write about the Long Beach Peninsula on this blog. That is largely because I have a fair bit of experience there, but also because it has been a great region for value and relative location. But what about other nearby coastal areas and towns? Sticking with the Southwest Washington and Northwest Oregon region, I can break it down into three 'zones'. 

• Clatsop County, OR: Cannon Beach, Seaside, Warrenton, Astoria
• Pacific County, WA: Ilwaco, Long Beach, Ocean Park, Oysterville
• Grays Harbor County, WA: Westport, Ocean Shores, Copalis Beach, Pacific Beach

Clatsop County, Oregon 

Statistics:

• County Population: @ 41,000
• County Area: 1084 square miles, 829 on land
• More than 34 miles of Pacific coastline
• Highest point: Saddle Mountain, 3283 feet
• Largest City: Astoria, population 10,181 (2020)
• Seat of Government: Astoria
• Largest beachfront town: Seaside, population @ 7000
• Median home price: $533,086
• Most expensive town: Arch Cape median price $969,272
• Taxes: mean property tax 0.9%, no sales tax, aggressive state income tax
• Nearest Costco Store: Warrenton, OR 5.6 miles from Astoria
• Nearest Hospital: Columbia Memorial, Astoria & Providence Seaside, Seaside
• Major highways: US 101, US 26, US 30
• Nearest city of 100k+ population: Hillsboro, OR population @100,000; 77 miles from Astoria, 1:43 drive; Vancouver, WA 89 miles 1:35 drive
• Nearest Major City: Portland, OR 96 miles from Astoria, 2hrs drive 

Clatsop county features two primary beach areas the southern bit is from Cove Beach to Crescent Beach with approximately nine miles of beaches. The trendy Cannon Beach is included in this stretch. The larger beach section is in the north runs 18 miles continuously from Painted Rock Beach to the South Columbia River Jetty near Warrenton. This section includes the family friendly Seaside area which is resort and vacation oriented. All of Clatsop County features a marine coastal climate with cooler temps than inland areas and mild year round weather. Other than the Pacific Coast the county does have some 25 miles of Columbia River waterfront as well. The county also offers some rugged coastal mountains. Clatsop suffers from puffed up pricing in real estate due at least impart to the excellent national advertising campaign for the Oregon Coast. It is famous and thus expensive.

Pacific County, Washington

Statistics:

• County Population: 23,365 (2020)
• County Area: 1223 square miles, 933 on land
• Nearly 36 miles of Pacific coastline
• Highest point: 3003 feet, unnamed high point
• Largest City: Raymond, population 3081 (2020)
• Seat of Government: South Bend
• Largest beachfront town: Long Beach, population @3000
• Median home price: $292,651
• Most expensive town: Chinook median price $365,417
• Taxes: mean property tax 1%, 8.1% sales tax, no income tax
• Nearest Costco Store: Warrenton, OR 21 miles from Long Beach, 55 miles from Raymond
• Nearest Hospital: Ocean Beach Hospital, Ilwaco; Columbia Memorial, Astoria, OR 19 miles
• Major Highways: US 101, SR 6, SR 103, SR 401, SR 105
• Nearest city of 100k+ population: Hillsboro, OR 99 miles 2:18 drive from Long Beach, Vancouver, WA 108 miles 2:07 drive.
• Nearest Major City: Portland, OR 116 miles from Long Beach 2:17 drive

Northhead Lighthouse, Cape Disappointment, WA

Pacific County is just a tad further away from the nearest large metro area from neighboring Clatsop County. Like Clatsop, this county offers rugged mountains as well as the beautiful coastline. The Long Beach Peninsula offers a long uninterrupted 27 miles of beach and a near equal amount of parallel bayfront just 2 miles to the east of the beaches. There is an additional 4-5 miles of sandy beaches north of the Long Beach peninsula as well accessed from Raymond. In Additional to the Pacific coastline there is a similar amount of Columbia River waterfront to Clatsop and a very large Bayfront coastline featuring more than 90 miles of shoreline on the Willapa Bay. If beachfront isn't your thing, but water views are, Pacific County has much to offer with housing prices far lower than Clatsop in Oregon. In general Washington State has a lower tax burden than Oregon as well. Pacific County like Clatsop has a marine coastal climate with mild weather all year round. Long Beach is a smaller version of Seaside offering family fun and further north up the peninsula the beach becomes more residential and quiet.

Grays Harbor County, Washington

Statistics: 

• County Population: 75,636 (2020)
• County Area: 2224 square miles, 1902 on land
• Roughly 39 miles of Pacific coastline
• Highest point: 4884 feet, Wynoochee Point
• Largest City: Aberdeen, population17,013  (2020)
• Seat of Government: Montesano
• Largest beachfront town: Ocean Shores, population 6715 (2020)
• Median home price: $358,311
• Most expensive town: Pacific Beach median price $925,738
• Taxes: mean property tax 1%, 8.9% sales tax, no income tax
• Nearest Costco Store: Olympia, WA 49 miles from Aberdeen, 87 miles from Ocean Shores
• Nearest Hospital: Harbor Regional, Aberdeen, 23 miles from Ocean Shores; Summit Pacific, Elma, 20 miles east of Aberdeen 
• Major Highways: US 101, US 12, SR 8, SR 105, SR107, SR 109
• Nearest city of 100k + population: Tacoma, WA 79 miles 1:17 drive from Aberdeen; 101 miles and 1:53 drive from Ocean Shores 
• Nearest Major City: Seattle, WA 109 miles from Aberdeen 1:47 drive; 132 miles 2:31 drive from Ocean Shores

Grays Harbor County is north of Pacific County and thus finds itself closer to Seattle than Portland. Although it has the most Pacific oceanfront of the three areas, a third of it is within the Quinault Indian Reservation. Like its southern neighbor, Pacific County, there is a large salt water bay with more than 60 miles of Grays Harbor bayfront shoreline. There is plenty of water view properties. Like the other two you can find rugged mountains nearby and the Olympic National Park even touches the area. This county has arguably the nicest beachfront community of the three areas with Ocean Shores a well designed and upscale community that is also one of the largest oceanfront town in the three counties. Seaside, OR and Ocean Shores are close in size with Ocean Shores a bit more sleepy and quiet contrasting Seaside's busy tourist vibe. Grays Harbor also contains the most dense city area among the three counties with Aberdeen and surrounding communities packed in at the mouth of the Chehalis River. That said, Greater Aberdeen is still fairly small and does not substitute for a larger city with 50k-100k people. Olympia, Washington is only 50 miles away and has a significant level of services.

Conclusion:

It is hard to say, but if price is important, then Clatsop has to be last. The median price will not get much near the beach and oceanfront properties will run in the millions. Between Pacific and Grays Harbor the difference is harder to identify. From the beach, Grays Harbor county has a longer drive to access to the interior metro areas but it has Olympia just 50 miles away and despite Olympia having a smallish population of just 52,000 people, it is the state capitol and has a substantial level of services. The bulk of Clatsop County services are very close to the bulk of Pacific Counties beach cities. There is a symbiosis of sorts and the two regions are connected by the Astoria Bridge on US 101. From Seaside, OR to Long Beach, WA is 33 miles and completely connects several cities and towns along the route including the Oregon beach towns Seaside, Gearhart, Surf Pines, SunsetBeach, the Columbia River towns of Warrenton, Astoria, Chinook, Ilwaco, and more beach towns in Washington, Oceanview, Seaview, and Long Beach. This connectivity and symbiotic relationship including the border economics between the two states gives Pacific County the clear win in this three way battle for coastal supremacy. If home prices and taxes are removed from the equation Clatsop starts to look real good. But price and taxes are rarely out of the equation. 

Tired of Hot Summers? Coastal Summers are Cool.

Last week I recorded eight straight days over 90º with most of them in the upper 90s in Vancouver. Meanwhile at the coast temps were cozy in the 70s and 80s for the most part. I really do not like hot weather... not even a little bit. Along the coast you be surprised if you have one day at 90 let alone eight in a row!

So if you are ready to retire in the cool comfort of the sea, SW Washington beaches and the adorable towns the dot them could be for you. The Long Beach Peninsula offers a wide range with busy tourist spots in the south and super quiet countryside in the north all while maintaining a short walk or ride to the beach.

With these warmer summers the beach is starting to look even better. That's all I got I am trying to lose this damn COVID bug I got, so wish me luck.

A Glorious 4th Delights the Coasters

Photo by Montel Graves

My sister lives in Oysterville up near the top of the peninsula and reported that the 4th was absolutely spectacular with near perfect weather and nice clear skies for the fireworks display at Long Beach. Coastal weather does not always cooperate but this year it did and the scene looked amazing. She captured some pictures of the fireworks against a dusk sky and it did indeed look like near perfection. 

Down in the Portland-Vancouver metro area it was also perfect weather with a high of 75º and a 9:30PM temp around 68º under sunny skies all day long and clear skies all night. It seems that SW Washington in general had a 4th to remember and that is always nice.

My sister has reported to me on occasion that she remains surprised at how little fog she gets considering the notorious reputation for it. It is by no means absent but summertime does deliver a fair number of clear nights by her record. She has lived there now going on five years. I think it could be related to the mouth of the Columbia River acting perhaps as a bit of a blower pushing the marine layer back a bit in the near vicinity including the Long Beach Peninsula. Perhaps I can get a meteorologist to confirm or refute that.

If the beach life is for you the Long Beach Peninsula could be your ticket to happiness.

Warm Weather staying away this Spring

Spring is typically full of fickle weather but it tends to offer both warm and chilly weather often with quick transitions. This spring has been rather light on the warm weather with just a few days feeling summery.  

Coastal businesses do rely on nice weather to bring the inlanders out to the shore for recreation. Here's hoping May brings some warm weather for the coast. At least some sunshine would be nice, right? One event scheduled later this month is the Oysterville Spring Garden Tour. Oysterville is located up near the top of the peninsula and is a lovely restored town. If you haven't visited the garden tour is a great way to to see it for the first time.

The date is May 21, 2022. This is a ticketed event with limited tickets: here is a link for more info.

For other cool events check the Long Beach Peninsula website here.

Long Beach Peninsula getting Expensive

The mad pricing in Seattle and Portland is not alone as the coast has seen a robust increase in housing prices. The overall market has been mostly driven by a lack of inventory more so than a glut of buyers. Supply chain woes and a severe shortage of labor has made building homes that much harder. the insane inflation of the last 12 months adds to the cost of building and even maintaining a home. All of this adds up to price pressure that gets further exasperated by a complete lack of sellers.

The peninsula is seeing prices that are now almost double what they were just five years ago. The area is still a relative bargain when contrasted to the soaring prices in Seattle and Portland but the $100k beach house has definitely faded off into the horizon of the rear view mirror. The Long Beach Peninsula saw a 22% increase in prices over the year from 2021 to 2022. That is bit faster pace than the I-5 corridor cities. 

With rates on the rise and pricing as well, buyer looking for the beach house dream need to pull the proverbial trigger now, before the dream slips away.

How Will Higher Rates Effect Your Coastal Dream?

Originally posted 2/25/2022 on Rod's Real Estate News...

Rates are on the move again and they are not going in the direction we prefer. Rates were solidly in the mid threes for the better part of last year and now we are seeing rate in the low to mid 4s. Now rates can vary widely based on the specifics of the loan and the borrowers financials but these are pretty typical.

The median priced home in Clark County is just a bit above $500,000. Let's say you are planning to purchase a home at $500k. Three months ago you might have qualified for a 3.5% 30 year rate. With 20% down you would borrow $400,000. I am deliberately keeping it simple excluding things like points, buy downs, fees, etc. The payment without taxes or insurance just the principle and interest (PI) would be $1796 per month. Now the same house at 4.5% will have a PI payment of $2027 per month. That's $230 per month MORE for the same amount borrowed. 

Buyers need to act now. Not only are they facing interest rate risk but housing prices last year went up more than 18% year over year. This year has not yet shown a slowdown. At that pace the $500,000 dollar home goes up at a rate of $7500 per month! Keep in mind that any rate under 6% is still below the fifty year average rate. But interest rates can also lead to qualifying issues. Your lender approves a monthly payment for you. When the letter says you qualify for $500,000 it is based on the rates available at the time of the letter. Most good loan officers build in a little cushion for minor rate variances. 1% is not minor. If you qualified for a max purchase price of of $500,000 at 3.5% with 20% down, then 4.5% will lower the amount of house you qualify for. That means you now only qualify for $443,750 with 20% down. Or you can buy the $500,000 dollar house but have to put more more than 20% down. The loan amount difference is $45,000 so that's how much more you have to put down to compensate for the rate difference.

This can be brutal when both rates and prices are rising. But once a buyer makes the purchase, they have their payment locked in and they begin to enjoy the market appreciation for themselves. Sitting on the fence is rarely a good idea, sometimes but rarely. 

Can Expensive Real estate be a Good Thing?

 From Retire to Washington blog last week...

Washington State is now famous for its expensive housing. Sure, states like California and Hawaii have significantly higher housing costs, but Washington is currently the 4th most expensive in the US. This can be a problem for retirees looking for a place to hang their hat. What if I told you, that higher housing prices can be beneficial?

Now this is an angle that only works in certain situations. But buying a house with 20% of you own money in an expensive market can lead to far greater wealth as the home values increase. Later in life that expensive house can provide a lump sum of cash or a lifetime of handsome cash flows whereas a cheaper house appreciating at the same rate cannot produce an equal equity gain over time. 

Say I buy a $500,000 house here in Vancouver USA with $100k down. Lets say over 20 years the house doubles in value which based on the last twenty including a HUGE correction in 2009-2012 is still conservative, I now have an asset valued at $1,000,000 with a debt load of $202,450. That is nearly $800,000 in equity and roughly $750k net if I sell the house. God forbid I need specialized elder care at this point, I can afford $5,500 (State Average) a month for more than 11 years!

Let's take a look at a cheaper state like say Mississippi. Now a nice house down near Gulfport can be had for $250,000. Run the same scenario out twenty years and you have a house worth $375,000. Why? Because Vancouver USA has more than double the rate of appreciation over the last 20 yeas than has Gulfport, MS. Now all fairness, the past doesn't alway mean the future will be the same. So we owe $101,225 and have an equity position of nearly $275k offer roughly $250k net after sale. Comparable elder care is about 25% less expensive in Mississippi. I will still run out of money in less than 6 years at the star average of $3,500 a month. Not only is there less money to pay for care, you are getting arguably less quality care since Washington is among the highest rated states for health care.

Many retirees plan on using the equity in their home to stabilize cash flows as retirement funds become diluted by inflation. A reverse mortgage is an option for some and so long as there is ample equity, the reverse mortgage can provide actual income. The more expensive house will generate a larger cash flow all else being equal.

Paying all cash for a property is not always the best idea. A reverse mortgage can sometimes be a better option providing cash based on a current value could protect the owner from downside market trends that occasionally occur. The reverse mortgage is designed as a long term investment for the bank with the short term protection of a large equity position. I am not pushing reverse mortgages here, but for some they can be a good tool especially in a high value area.

Last bit on the reverse mortgage, they are very rate sensitive. Higher interest rates reduce the amount of potential cashflow due to the higher loan service needed to cover the interest. Interest rates could rise in the next few years to levels that make the reverse mortgage unsustainable and thus unavailable.

So for buyers using a traditional mortgage to buy their retirement home, expensive states tend to be a barrier and Washington is among them obviously at #4 on the median housing cost list. But again if housing costs are rising equally the equity gained in a state like Washington is going to be far greater than that gain in a less expensive state. Some states with low housing prices have these low prices because the market doesn't appreciate as well as other states. In that scenario the cheaper house not only produces a lower gross equity gain it does so at a slower rate of gain. If you are going to stay in the house till the bitter end, this is not a problem. But what if you need to sell it to provide cash for elder care like the scenario above? You could end up on federal assistance rather than choosing your own care options.

Retirees should take time to work with a professional planner to see how their own situation lines up and where the best options are. Here in Washington we are plagued with high housing costs in most parts of the state, but we have no income tax, and reasonable property tax rates. We have excellent weather to suit nearly any preference. I said nearly, if you want that tropical island feel Florida is that way (pointing vigorously to the Southeast). 

When you decide Washington is the place for you, call me and I'll help you find the ideal house.

Rare Snowstorm Blankets the Coast

A typical winter at the beach results in little or no snowfall. Sure some flurries may fly when the chilly winter air dips down from Canada, but generally snow is a fleeting event on our typically mild coast. 2021 decided things would be different as the year went out with cold temps and sometimes heavy snowfall on the peninsula beaches.

My sister's home in Oysterville saw snow depths of more than four inches at times last week. Starting on Christmas Day and all the way through to the new year, storm after storm, system after system, brought snow rather than rain to the normally wet coast. 

The real oddity was having snow on the ground for a whole week. That is not strange for the inland locations this time of year but at the beach? Yeah definitely an unusual display and a wild way to end a wild year.

2022 started out a little more "normal" as temps jumped up into the mid 40s and buckets of rain replaced all that snow with good ole water puddles. The next few weeks should provide some excellent storm watching opportunities and as always be very careful; the Pacific Ocean will literally eat you if you are not cautious.