San Juan Islands Home Prices, Closing Costs Rise

The Median Islands Income Can’t Cover Costs of Median Home Price

Contributed Photo. Merri Ann Simonson.

By Merri Ann Simonson, Managing Broker, Coldwell Banker San Juan Islands Inc

The cost of construction, selling and buying real estate in the islands has continued to increase based on the requirements to meet the current regulations, overall material and service cost increases.

One could say that it costs more and takes longer to comply with the various regulations that govern the real estate and related construction industries.

Based on the median home price of $675,000 during the last 12 months, a cash buyer will spend an average of $13,500 in basic closing costs.

That includes their half of escrow, title insurance for their lender, recording fees, 1% land bank tax, ½% affordable housing tax and home inspection fee. It doesn’t include the prorated taxes, insurance, homeowner’s dues, loan closing costs or well water testing.

If the buyer needs a loan, they will have monthly payments of $3,651 based on a $135,000 or 20% down payment, 3% interest and a 30-year loan. The monthly payment includes principal, interest, taxes and insurance.

The payments would be higher if there are HOA dues or have mortgage insurance if the down payment was less than 20%. Generally, our real estate tax rate is $8.03 per $1,000 of assessment.

A buyer would need to make around $87,642 annually or $7,300 per month to qualify with a ratio of 50% in order to purchase a $675,000 home. ($3651 x 2 = $7301 monthly income needed x 12 = $87,625 annual income).

This income requirement calculation is only based on the principal, interest, taxes, and insurance and assumes this buyer has no reoccurring debit, such as charge cards, car loans, HOA dues or mortgage insurance.

This is typically not the case. Even if you pay your charge cards in full each month, the underwriters will use a minimum payment amount in the calculation.

The San Juan County Annual Median Income is $33,216 for an individual and $63,622 for a household.


Posted on July 2, 2021 at 5:30 am by

Categories: Real Estate


  1. I am reassured that Ms. Simonson has realized, and in her piece makes others painfully aware, that for quite a while average people working hard here, cannot swing buying in such an inflated market. Real estate agents and lenders and builders have cashed in for a long time (yes with some downturns)but younger folks with families struggle to have a chance to gain equity and swing a deal for a $400K range place of which there are very few. Never mind $675!

    That is why the .5% REET campaign for vastly increasing the stock of affordable homes was passed by voters and is the Home Fund program just the stimulus we desperately needed (along with a number of private entities building smaller places and clustering near town).
    Many real estate business owners/brokers fought the effort and if I remember correctly Ms.Simonson was one.

    Steve Ulvi

    Comment by Steve Ulvi on July 3, 2021 at 6:39 pm
  2. Great information Merri Ann!

    Comment by Tracy James on July 4, 2021 at 11:49 am

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