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A house in the San Juans for less than $300,000? Median home prices drop as sales start to pick up

A house in the San Juans for less than $400,000? How about a house for less than $300,000?

Or a quarter-acre town lot at around $100,000, a half-acre lot for $120,000, or a five-acre parcel for $175,000?

Real estate prices have dropped, and the market is starting to chug along.

“In 2007, there were only a few houses under $400K on the market and this year at present we have 41 homes under $400K,” said Thane Bolger of Coldwell Banker San Juan Islands. “There are seven properties under $300K. There are also a number of good condos available under $300K. The best deals are selling and anything overpriced just languishes.

“This is the best selection of homes I have seen in this segment of the market in many years.”

In June, there were 47 new listings from the San Juans on the Northwest Multiple Listing Service, bringing the total number of listings to 509. There were 18 pending sales and 15 closed sales; that’s up from 14 pending sales and four closed sales in May, and 11 pending sales and four closed sales in April.

In June, the average price of a home in the San Juans was $547,880, the median price was $380,000. (The median price means half of the homes sold for more than that price, half sold for less. While the median provides a better picture of what real estate is selling for, the median can be skewed by million-dollar sales.)

Those prices were the highest of the 19 counties in the Northwest MLS. King County was second with a median price of $363,116.

Regionwide, pending sales increased more than 19.5 percent from a year ago and median prices are up 4.4 percent since January. Although the number of condo sales were off nearly 21 percent, the number of closed sales of single-family homes nearly equaled year-ago totals, according to the Northwest MLS.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said that although the region's median home price is down about 9.5 percent from a year ago, median prices have flattened over the past seven to nine months. “This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid-price ranges,” he said.

A federal tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence before Dec. 1, 2009.

Have we seen the bottom of the market in the San Juans? Merri Ann Simonson is associate broker and sales manager of Coldwell Banker San Juan Islands. Here’s her take:

“The median price for a previously owned home on less than 5 acres for the last 12 months is $420,000, as compared to the $452,500 and $480,000 for years ending 2008 and 2007, respectively,” she wrote in her quarterly report.

The median price for land in 2008 was $150,000, down 10.5 percent from the 2007 price of $167,500.

“Our current median home price on San Juan is equal to year-ending 2005, when it was also $420,000; it is unfortunate that our volume isn’t the same. This may explain why homes are currently selling at or very near their tax assessment, as 2005 was close to the last time the assessor made a visit to many of our properties.”

On San Juan Island, waterfront lots start at $350,000, with waterfront cabins at $600,000. You need to spend closer to $800,000 for a waterfront home. Water-view lots start around $240,000, water-view homes around $380,000, condominiums around $155,000, and manufactured homes at The Oaks around $150,000.

“Due to the size of our market and the demographics of our buyers, we didn’t experience the level of decreasing prices that occurred on the mainland,” Simonson wrote. “We don’t have a bank-owned or foreclosed property on every corner forcing our prices down. Our local banks are healthy as they didn’t participate in sub-prime lending.”

In the first half of 2009, the number of real estate transactions on San Juan Island lagged behind those of the first half of 2008: 63 to 94. But the value of those transactions was almost par: $32.2 million in first-half 2009, compared to $38.3 million in first-half 2008. At the current pace, the value of real estate sales in 2009 could reach that of 2008: $68.5 million. But there were 161 sales in 2008. And the 2009 volume and value would still be a far cry from the 253 sales worth $144.3 million in 2007 and the 348 sales worth $182.5 million in 2006.

Still, Simonson is optimistic.

“Activity has been increasing over the last three weeks -- more showings, more offers and more escrows. While this may not mean that our market is turned around, we are definitely headed in the right direction … Real estate is a long-term investment. The average time that an individual owns their home is six years. Our market will rebound as the national and local economies improve.”

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