This is an incredibly strong seller’s market. The second quarter results, which complete the first half of the year, in San Juan County and on San Juan Island were extremely good. Per the NWMLS, the dollar volume in San Juan County was $263,479,687 with a total of 334 transactions. The numbers reflect a 119% increase in dollar volume and a 63% increase in the number of transactions as compared to the same period in 2020.
For San Juan Island the transaction volume was $112,714,549 with a total of 161 transactions. This was a 97% increase in volume and a 73% increase in number of transactions.
Our sellers are listing now because they recognize this is a great market to be active in. Most of the new listings sell in a timely manner, and often with multiple offers and escalating prices. Many sellers are pricing optimistically against inventory, versus closed comparable properties as the market trends support it.
It is difficult for a buyer to be active in this market. The successful offers are typically cash, accommodating to the seller’s closing and/or possession requirements and have very short inspection/feasibility studies.
The buyer profile appears to be the typical 45-65 years of age, buying a second home or retirement home. However, we are noticing a slight variation with more younger people joining our community. They are able to work out of their home office and have decided to make island living a reality. They have determined that our school system has a high ranking in the State, and in many cases, better than where their children were enrolled in the metropolitan areas.
Recently, 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 during their feasibility study period.
The seller’s role in our market is aggressive, therefore the buyers and their agents must be aggressive as well. Some buyers are waiving home inspections and feasibility studies to attract the seller and others are paying a lot over the list price. Some are buying the property “as is”. They are conducting their inspections and feasibility studies, however; acknowledge that the seller will not make a price adjustment or repairs as a result of buyer’s home inspection results. In this situation, if contained in their contract, the buyer still retains the right to terminate after their studies, if the property is not suitable.
There is no science or art to writing a competitive offer for a buyer as each offer varies based on the situation, the property type, the seller’s priorities and most importantly, what other information the selling agent can find out in advance. The agent needs to do their job as well, and communicate, communicate and communicate more!
As an agent, it is very disappointing when your buyer is unable to compete but are trying as hard as they can to buy a home on the island. In some cases, I believe some of my buyers are being priced out of our market. Many of them are essential workers or provide essential services to our community, so it is unfortunate that home ownership is so difficult. Further, buying a home in the lower priced segment of our market is the most challenging as most of the buyers require financing and are unable to compete against the cash buyer due to the loan contingency and the extra time needed to arrange for financing. In some cases, I have written over 4 offers for my well qualified buyer, and they have lost every time to a cash buyer.
For buyers that require financing, regardless of their price category, I am writing a 21-30 day financing contingency with a 30-45 day close. The 30 days are needed in order to arrange for the appraisal and lender’s underwriting and closing. For cash buyers, I am writing less than a 30 days close. Home inspections and feasibility studies are around 15-21 days.
Some of my buyers are having to adjust their pricing in order to move towards a purchase.
Bottom line, it is disappointing and frustrating for buyers in all pricing categories, even the high-end buyers have limited inventory.
The high-end sales in excess of more than $1M for all types of real estate, have always played a role in our San Juan County market. Year-to-date, we have closed 67 compared to 26, last year same period. We have 26 pending listings over $1M versus 18, and 69 active listings versus 104 last year same period.
This market is incredible. At this point, there is no way to tell how long this level of activity will continue. If you are considering selling or buying, you will want our expertise on your side.