Even as real estate sales slowed … to … a … trickle, Pat O’Day of John L. Scott in Friday Harbor remained confident that the market would rebound. Sellers just had to be patient.
“The light at the end of the tunnel is that we are the Martha’s Vineyard of the Pacific Northwest,” O’Day said at the time. “God isn’t making any more San Juan Islands and there is an insatiable thirst by a very affluent, young generation, as they head toward their retirement years, to have a presence on the islands.”
O’Day’s patience, and that of other agents and sellers on the islands, is showing signs of paying off.
In March, there were 14 closed sales in San Juan County with an average price of $362,530 and a median price of $350,000, according to the Northwest Multiple Listing Service, which tracks real estate data in 21 Washington counties. At No. 2 in median price was King County, $343,950.
While 14 sales may not seem like a lot to crow about, particularly with 435 active listings and 45 new listings on the books on the islands, consider this: There were only five closed sales in February and eight in January. In March 2009, there were only four.
As the San Juans go, so goes the region. Home sales in the Northwest MLS region surged in March — a 51 percent increase in pending sales over the same month a year ago — fueled by low interest rates, first-time homebuyer incentives and lower prices.
Pending sales rose 60 percent from 12 months ago in King, Skagit, Snohomish and Whatcom counties. Regionwide, there was a 47 percent increase in the number of closed sales.
Prices for last month’s closed sales of single-family homes and condominiums were down about 2 percent regionwide, but since January prices have inched up almost 1.8 percent.
“Homes that are positioned well – at every price range – are selling quickly,” Northwest MLS director Pat Grimm said in a report. “Sales activity is at a high level like we haven’t seen in a while, but still not the frenzy we saw a few years ago. And that’s a good thing.”
Other signs of health in the San Juans market: In February, 12 of the 21 counties in the Northwest MLS market area reported double-digit gains in pending sales, led by San Juan County (up 85.7 percent), Snohomish County (up nearly 71 percent) and King County (up nearly 63 percent). And for all of 2009, San Juan claimed the highest median sales price for single-family homes, at $443,500. King County followed at $380,000; the regionwide median was $280,000.
Northwest MLS director Dick Beeson expects the upcoming tax-credit deadline to boost activity in the next few months. Buyers who have a contract in place to purchase a primary residence by April 30 have until June 30 to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.
“This year will be better than last because of more certainty in the market,” he said in a report.
Steve Buck of Coldwell Banker San Juan Islands said this is “an encouraging point in time” in the local real estate industry. In January 2009, his office had three real estate transactions under contract. A year later, there were 15.
“In January of 2005, our biggest year in real estate sales to date, there were about 25 transactions under contract. So we’re still a long way from the sales volume of 2005 but doing a lot better than we were a year ago,” he said.
He added, “By far the largest part of our local private economy is dependent on the real estate and construction industries. Our local government is financially very dependent upon those industries as well. When our real estate market improves, that’s what leads to improvement for the construction industry and then just about everything else – and it appears as if our real estate market is finally starting to improve. Our market usually follows the Seattle area market and their market has improved greatly with some areas nearly doubling in transaction volume for December 2009 compared to December 2008.”
Buck believes low interest rates, lower prices and incentives for first-time homebuyers have created a climate that is right for investment — and those investments are good for the community.
“If you have construction projects you’ve been putting off or would just like to do, now is a good time to do them. It won’t be long before the demand and price for labor and materials will be going up again,” Buck said.
“If you have money you can deposit into a bank, consider putting those deposits in local banks that in turn lend money out into our community. Finally, if you’re thinking about buying a home or land, there likely will never be a better time to buy again in our lifetimes when you take into consideration the lower prices, the higher supply of available properties and the lowest interest rates in 46 years.
“Further, if you can, take advantage of the $8,000 first-time buyer tax credit or the $6,500 move-up buyer tax credit for homes up to $800,000. These will be expiring on April 30. It takes time to buy a home and get financing, and time is getting short.”