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Quarter Real Estate Market update

The third-quarter results for San Juan Island and San Juan County were consistent with the first quarter results; very robust. Our market continues to outperform all historic landmarks. Per the NWMLS, the dollar volume year-to-date on San Juan Island was $184,762,056 with a total of 254 transactions. This reflects a 32% increase in the dollar volume and a 34% increase in the number of transactions. For San Juan County, the total dollar volume was $421,393,152 with a total of 518 transactions. The County also had an increase which was 43% in dollar volume and 20% in number of transactions.

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Despite low inventory levels, our volume is incredible. As of October 4, the total inventory for San Juan Island had 106 listings for all types of properties with 39 of those pending in escrow and another 67 active listings.

For the County, the inventory total was 247 listings with 82 of those pending and 165 active listings. These are historically low, but apparently not low enough to stall the sales and slow down the market.

In reviewing the inventory levels during 2021, the totals increased slightly or 11% during the summer months of April through August but has since dropped back down to all-time lows.

Many regional markets are slowing due to lack of inventory, but not our County. Agents are originating new listings regularly; however, they are selling at full price or more within 1 week, often with multiple offers, regardless of the type of property. The new originations are sustaining the demand at this point.

Most of our agents, and those throughout the County are having their best year ever. The source of all this activity is buyers considering the San Juans as a viable alternative to the suburbs of the metropolitan areas. Many are buying as a second home with plans to make the transition soon to a full-time residence. The ability to work out of the home office and the interest rate environment are also contributing to the affordability. Many of our buyers are obtaining financing whether they need it or not, just because the rates are so low.

Sellers: It is the best market ever; your property is worth more than it has ever been. However, if you

are selling to re-buy in San Juan County, you will be paying top dollar. Utilizing a 1031 tax exchange if the San Juan property was held for investment, is your best option.

Buyers: Cash and a fast escrow is most attractive in this market, having a home inspection but waving the right to have sellers adjust the price or make repairs strengthens your offer further. Some buyers are waving the low appraisal provisions, using escalators, and granting seller delayed possession.

Recap of our San Juan County Market:

• The median home price for the 9 month period ending Sept. 30, 2021, for the County and San Juan Island was $740,000 and $675,973 respectively, these prices reflect an increase of 13% for the County and no change for San Juan Island over last year, same period. Orcas Island has produced most of the increase for the County for median home prices at this point. The median is a typical market price where half of the homes sold for more and half sold for less. This is not an appreciation calculation but merely a solid trend indicator.

• The median land price for the 9 month period ending September 30, 2021, for the County and San Juan Island was $247,500 and $225,000, respectively. The increase is 24% for the County and 9% for San Juan Island over last year, same period.

• The average home price for the 9 month period ending September 2021 for the County and San Juan Island was $1,062,013 and $891,521, respectively. The increase is 19% for the County and San Juan had an 11% decrease. Again, Orcas is doing the heavy lifting as it relates to increases in average prices for the County. The average price for land for the County and San Juan Island is $334,662 and $345,401, respectively. Both were strong increases.

• YTD the average days on market number (DOM) for homes and condos in the County and on San Juan Island was 88 and 76, respectively. These numbers are about 100 days less than last year, same period. The average days on market number for land in the County was 307 and 241 for San Juan Island. The County decreased by 50 days and San Juan decreased by 160 days. Land sales have been strong throughout the County.

• YTD sales in excess of $1m each represented 55% of our total dollar volume for the County. Historic range has been 33%-38%, but the last two years it has been over 50%. YTD, we have closed 107 sales in this category with their DOM being 109. This is compared to 77 for the same period in 2020. San Juan has closed 41 of the 77 or 53%. It was interesting to note, that of the 77 sales, only 15 of those owners had to lower their price to attract a buyer and 1 increased their price (Trump Island). Those owners that did decrease their price had been on the market for at least 83 days, so they were older listings that grew into their pricing over time.

• YTD sellers negotiated on average 1.70% off the list price at the time of sale for homes and condos in the County and 1.40% for San Juan Island. These percentages are down from last year.

• YTD sellers negotiated on average 1.2% off the list price at the time of sale for land in the County and on San Juan Island they enjoyed being on average 1% above their list price. As mentioned, land sales were robust due to low selection of existing homes to consider. Many buyers are considering building custom a viable option, which is great for the construction industry. I just hope they checked the cost of construction recently and are well prepared.

The bottom line is that the market is incredibly busy; agents, real estate brokerage firms, lenders, escrow, title, appraisers and the well, home and septic inspectors and land use consultants are all working to their maximum capabilities, if not more. If you are buying and selling in this market, please make sure your contract date expectations are reasonable given the current circumstances.

Be sure to contact us if you have any questions about our market.

Written by:

Merri Ann Simonson

Managing Broker

Coldwell Banker San Juan Islands Inc.

simonson@sanjuanislands.com

360-317-8668