The third quarter results for San Juan Island and San Juan County are all reflecting a downward trend across the board; in volume and transaction numbers for both areas. Per the NWMLS, the dollar volume year-to-date on San Juan Island was $135,602,193. with a total of 137 transactions. This reflects a 26% decrease in the dollar volume and a 47% decrease in the number of transactions.
For San Juan County, the total dollar volume was $300,172,437. with a total of 306 transactions. The County also had a decrease which was 29% in dollar volume and 42% in number of transactions.
Coldwell Banker San Juan Islands Inc. is doing better than the general market with a decrease of 13% for closed sales volume. However, we are maintaining 50% of the market share on the island and 8 of the top 10 production agents on San Juan Island work at our office.
Many nearby regional markets are experiencing similar corrections in their areas. These corrections were expected as the volume in 2020 and 2021 was not sustainable. Further, when low inventory is coupled with high inflation and increasing interest rates, a correction is inevitable.
The current market is very similar to 2019 transaction numbers and 2020 sales volume. Those were both considered very good years, the market was balanced between buyers and sellers, the number of days a property was on the market was normal for our area, and the negotiation percentage off list price was fair.
It was just a year ago that most of the agents on San Juan and those throughout the County were having their best year ever. It was a beehive of activity; Buyers and Sellers were in a frenzy to purchase property or list their properties. It is amazing how quickly the real estate market can react to adversity.
In reviewing the 2022 year-to-date market, it is apparent that we peaked this summer. In the County, the month of May offered the highest sale price to list price ratio of slightly over 105% which equates to an average of 5% above the list prices. September had a 97% ratio or an average of 3% below the list price.
March was the lowest month for inventory with a 3-month supply, a prediction based on current absorption. August 2022 was the highest month year-to-date with 8 months of supply.
July and August were the months with the highest number of listed properties. September’s inventory number has dropped down 6% but that may be the seasonal adjustment as well.
As of September 30, the total inventory for San Juan Island was 104 listings for all types of properties with 21 of those pending in escrow and 83 were active listings.
For the County, the inventory total was 259 listings with 49 of those pending and 210 active listings.
As compared to last year same time, the major difference is in the number of pending transactions. The number of pending transactions for San Juan Island was 39 in 2021 which equates to a 46% decrease. For the County, the pending number was 82 in 2021 which reflects a 40% decrease.
The total amount of inventory in 2022 as compared to 2021 was almost identical for San Juan Island and only a 5% decrease for the County. It was truly a different market back in 2021 with the low amount of inventory not slowing down the number of pending transactions that ultimately produced the great sales volume levels.
My comments to the various parties from one year ago have changed substantially; today’s comments are below:
· We have buyers in our market; however, they are expecting and being granted contingencies for inspection, feasibility and financing. The transaction closing periods are back to 30-45 days.
· This is not the market to “test” the top if you want to sell in a timely manner.
· We haven’t had very many low appraisals, so the appraisers are finding enough closed comparable sales to support market values.
· The number of transactions with multiple offers and/or escalating prices are fewer.
· Many sellers are recognizing the market change and are having to reduce their price in order to attract the buyers.
· Buyers desire the property to be in good condition. Most do not want to experience a remodel or repairs and appear to shy away from those homes with a “honey do” list. Perhaps they know that our service providers are fewer in numbers and all extremely busy.
· There is more selection to choose from and the days on market is increasing which creates some anxiety for our sellers.
· There are fewer buyers with cash so the competition is not as strong. Again, fewer multiple offers and “bid wars”. Perhaps all the cash buyers in our market closed before the summer.
· Buyers must still have their pre-qualification letter in hand and select a lender that can perform with loan approval in 30 days and close within 45.
· Interest rates are high, but several lenders offer decent creative programs. The JUMBOS are actually lower than the conforming rates and ARM loans have returned as an option.
· Many buyers have resumed their pursuit of owning real estate due to the conditions cited above Before, they were on the “bench” due to inability to complete with other buyers.
If you have any questions about our current market, please be sure to contact me. With over 27 years on the island in real estate, I have been through a few market changes.
Merri Ann Simonson
Coldwell Banker San Juan Islands