The first quarter results in San Juan County and on San Juan Island reflects the market correction that affected our region. Per the NWMLS, the dollar volume in San Juan County was $73,938,200 with a total of 63 transactions. The numbers reflect a 15.7% decrease in dollar volume and a 28.4% decrease in the number of transactions as compared to the same quarter in 2022.
For San Juan Island the dollar volume was $30,759,250 with a total of 36 transactions. This was a 17% decrease in dollar volume and an 8% decrease in the number of transactions. First quarter results are always volatile and do not necessarily set the trend for the year. After the COVID years, our market has been trending similar to the “old days” with our most active months being in the summer.
After years of the buying frenzy with escalating prices, it is clear that it takes a fewer number of transactions to create the dollar volume in our County. Decreases in the number of transactions are not as alarming as they have been in years past.
The decreases in dollar volume are directly associated with the current inventory levels, the amount of inflation and increasing mortgage interest rates that continue to create uncertainty, hence fewer buyers.
Our inventory as of April 3, is a total of 60 for San Juan Island and 138 for the entire County. These totals are very similar to March 2022; however, the most notable difference is the fewer number of pending transactions. San Juan Island had 25 pending transactions in March of 2022 and currently has only 9 which is a 64% decrease. The County had 50 pending transactions in March of 2022 and currently has only 25. Fewer buyers, less volume.
Many of our sellers are in the age group of 65-85 and are 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. Due to the seasonality of our market, inventory should increase in the spring. Our sellers make the decision to relocate away from the island regardless of the market conditions.
Further, for buyers, this current type of market can be beneficial. There are not as many other buyers in direct competition and considerably less multiple offer situations.
The market correction has begun to present itself in the trend of our median home price as well. The median home price for San Juan Island for the 12 month period of March 2022 through March 2023 is $815,000. That price is down from the 12 months in 2022 when the price was $852,000. The entire County’s median home price also reflects a decrease from $921,000 in 2022 to $908,800. The Median Price calculation is not a reflection of appreciation but merely a trend in the market.
For buyers; do the math, it may be that the lower home price offsets the higher interest rates that you must pay in our current rate environment and your refinance costs in the future when rates settle back down.
Our market has further corrected in the sense that sellers are accepting of the standard purchase contingencies and time limits, which is very comforting. However, sellers are negotiating on average 5.6% off the list price for homes at the time of sale during the last quarter. No sense of distress or seller urgency in our market.
I believe that the buyer activity will increase over the next few months. The indications from the amount of Zillow leads and listing ”hits” all reflect increased activity levels. Further agents are experiencing more direct contact from buyers with inquiries. These are all the necessary steps that buyers take before they set their showing appointments with the intent to purchase property.
When more buyers return to our market, more sellers may venture out as well. The property owners of investment properties tend to sell when the market favors them as they have always been looking for return on investment. More buyers equates to more competition, which benefits the sellers.
Each year more listings are originated when Springtime allows sellers to spruce up their curb appeal and when agents are processing their annual showcases.
Real estate is one big cycle with cause and effect.
In this market, there are pros and cons on either side of the transaction; buying or selling. Currently our market is nicely balanced, which allows for a kinder and gentler transaction for all parties involved.
Below are the historic charts for the first quarter since 2019.
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 at: http://sanjuanislandslifestyle.com/blog/
Merri Ann Simonson
Coldwell Banker San Juan Islands