The second quarter results, which complete the first half of the year, in San Juan County were extremely good when considering the virus impact. Per the NWMLS, the dollar volume in San Juan County was $118,381,567 with a total of 201 transactions. The numbers reflect a 6% decrease in dollar volume and a 4% increase in the number of transactions as compared to the same period in 2019. For San Juan Island the transaction volume was $56,453,142 with a total of 91 transactions. This was a 3% increase in volume and a 10% increase in number of transactions. For Orcas the volume was $41,114,888 with 71 transactions. This was a 19% decrease in volume but a 10% increase in number of transactions. For Lopez the volume was $14,061,726 with 26 transactions. This was an 8% increase in volume but a 14% decrease in number of transactions.
The volume is impressive as in the month of April buyers and sellers were in shock, lenders were tightening their underwriting belts and there was a lot of uncertainty. May and June were both very productive months for the entire County.
The buyer profile appears to be the typical 45-65 years of age, buying second home or retirement home, and we can now add that they want to leave the metropolitan areas or at least have a safe place to go when they feel uncomfortable.
Many of these buyers can work from home and have been doing it for the last 90 days and now realize they don’t need to be in Seattle or other large cities to earn a living. Many are self-employed or executives in the private business sector. Good internet connectivity, such as fiber is very important to their purchase. One of the most active price segments is $1M to $2M.
Our sellers are listing now because they were planning on it in the near future and are recognizing this is a great market to be active in. The agents all feel that we are having more multiple offers and some with bid wars, than we had back in the boom years of 2005-2007. If a home is priced at market, buyers are scrambling to see it and write an offer. I have had several buyers Facetime with their agents and write an offer sight unseen. Most of these types of contracts have worked out with the buyer then coming to town when they can make arrangements for travel during their feasibility study period.
Some sellers are pricing optimistically against inventory, versus closed comparable properties, as the inventory is decreasing, and we are noting upward pressure on the new listing prices. Due to the turmoil in the big cities, some buyers have made the decision to accelerate their relocation plans and are making life changing decisions to buy in the islands. The multiple offer situations are adding a lot of stress to the situation. In some cases, only the successful buyer is happy after a competitive bid situation; and sometimes not even them. It all depends on how the multiple offers situation is processed.
The multiple offer process is set by the Seller with advice provided by their agent. When a seller receives multiple offers, they have a choice, and in most cases, they can process the offers based on the options listed below.
1. Choose one offer and respond to it in the form of a counter or acceptance. This rarely happens as the other buyers with offers are hoping to perfect the desirability of their offer. Historically, it is unusual for a buyer to submit their highest and best during their first submission; it is just the nature of the negotiation to hold back a tad.
2. Have their agent process a “Closed Bid”. The listing agent goes back to the other selling agents involved and tells them to have their buyer submit their “highest and best” offer by a date and time certain. Then the sellers can review both offers and select one to counter or accept.
3. Have their agent process an “Open Bid”. The listing agent then shares with the other selling agents involved the terms of their best offer. The other buyers must perfect their offer and/or terms to attract the seller to their offer. This process can be several hours or over days until there is only one buyer left as the others have dropped out of the process. This is deemed a superior method by most agents as the buyer is 100% in control of their spending and will drop out when their ceiling has been met. Unlike the “Closed Bid” where a buyer might have been $5000 low when they submitted their highest and best, and they end up losing the home because they were unaware of the other offer amount. They of course are very disappointed.
As I said, there can be numerous offers on a property but only the seller and the successful buyer are happy when the process is finished.
Sales in excess of more than $1M have always played a role in our San Juan County market. Year-to-date, we have closed 26 compared to 28 last year same period. We have 18 pending versus 11 last year same period. We currently have 104 active listings in this price category for all types of real estate. As I mentioned above, we are very active with showings in the price range of $1M to $2M. A third of the pending transactions are in this pricing category; however, this segment represents only 13% of the closed sales year-to-date. It appears that this increase in activity level has been in the last 60 days.
Be sure to contact me if you have any questions about our real estate market.