A look at the first quarter real estate market results

Merri Ann Simonson sends along an update about the state of the San Juan Island real estate market.

This seller’s market continues to be very strong. The first quarter results in San Juan County and on San Juan Island were as expected for a first quarter. Per the NWMLS, the dollar volume in San Juan County was $87,735,644 with a total of 88 transactions. The numbers reflect a 7 percent increase in dollar volume and a 34 percent decrease in the number of transactions as compared to the same period in 2021.

For San Juan Island the transaction volume was $36,984,387 with a total of 39 transactions. This was an 8.5 percent decrease in volume and a 40 percent decrease in number of transactions. Orcas Island’s volume is dictating the County numbers as San Juan isn’t contributing at the same level.

It is very clear in both the County and on San Juan Island that the prices have increased considerably and therefore fewer number of transactions can create volume greater than the same period in 2021 for the County and with a slight decrease for San Juan Island.

It is also very clear that the lack of inventory is hindering both volume and number of transactions. As of March 31, San Juan County had a total of 138 listings for all types of properties. The County had 41 pending and 97 active listings. This is a 36 percent decrease in total listings, a 50 percent decrease in pending listings and a 28 percent decrease in active listings

For San Juan Island, the decreases were 44 percent in the total inventory, 39 percent in pending and 50 percent in active listings.

As agents, we all have ready, willing, and qualified clients wanting to purchase but they have been unable to do so for various reasons, the most common being, inventory and selection. I assure you my buyers aren’t being picky, but they just can’t get in a position fast enough to make an offer on the homes that are suitable for them.

Spring has brought some new listings to the market as sellers can spruce up their curb appeal and agents are processing their annual showcases. However, if the properties are priced somewhat close to market, they are being placed under contract within 10 to 15 days, often with multiple offers and escalating prices.

Due to how fast properties are going pending, we are not making any headway for increasing the amount of inventory. We have been on a steady decline since May 2021.

It is also quite possible that the current level of inflation, speculation over increasing mortgage interest rates, and the war are causing uncertainty. Some buyers may have reconsidered or postponed their purchase in the islands. Some may have become frustrated due to the poor selection. This will also have an impact on our volume and transaction numbers as well.

This is just the first quarter of the year and historically it is always a volatile time and not a clear indicator of what the next three quarters will produce.

Most of our sellers are in the age group of 65 to 85 and relocating off island due to their desire to live closer to family and/or major medical facilities. Now we can also add frustration with the ferry system to the list. Therefore, I understand why some owner-occupied sellers are hesitant to list, even when we have precedent setting prices. Unless a seller is moving in with family members or a care facility, it is very expensive to find replacement property in most areas in the nation.

Many of the new listings originated were investment properties or second/third dwellings for the property owners. This is a more motivated group willing to capitalize on the extraordinary pricing.

Bottom line, we have a smaller pool of sellers that will consider listing at this time. We have also had three incredible volume years that prompted many of the property owners to already sell and move on.

Let’s place this into perspective — we have roughly 20,400 tax parcel numbers in San Juan County, and of those parcels only around 140 are formally listed with an agent. (Please note that some of the listings have multiple tax parcels numbers so the percentage of listings to the total is not able to be calculated accurately.) Clearly, not everyone wants or needs to leave or take advantage of the current pricing.

If you are considering selling in the next year or so, don’t wait. Buyers are motivated and very cooperative. If you’re a buyer, you and your agent must be aggressive. Compete to the best of your ability but don’t get yourself over-extended in a multiple offer situation. As always if you need additional information, please be sure to contact one of us. To read all our past market updates and industry related articles or view our lifestyle videos, please visit our blog.

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