The downward trend continued in 2024 for our real estate market relating to dollar volume and number of transactions. However, even though the volume and transaction numbers were down, the days on market and percentage of sales price to list price were very similar to 2023.
In reviewing the year-end results for 2024, the sales dollar volume for the real estate market in San Juan County, per the Northwest Multiple Listing Service, was $286,818,396 which reflects a decrease in dollar volume of 17% as compared to 2023 when the dollar volume was $343,832,549. Unfortunately, the 17% decrease in volume is more than the 10% decrease we experienced in 2023. The County closed 306 transactions which is a 6% decrease from 2023. The average number of transactions per month was 25 compared to 27 last year.
Total dollar volume on San Juan Island in 2024 was $128,434,030 as compared to $150,699,250 in 2023. The decrease was 15% in dollar volume which was very similar to the amount of decrease in 2023. The average number of transactions per month was 11 which is a decrease of 13%.
The year 2024 was a rough one for many prospective buyers and sellers. Most individuals were distracted by the political environment, cost of living and the high level of interest rates. Definitely not focused on buying and selling real estate in San Juan County.
Having said that, Orcas had a very good year. They enjoyed a 6% increase in dollar volume and a 15% increase in the number of transactions. They were their own micro economy in 2024 and the leader of the pack as far as turning the corner in the County’s real estate market. Unfortunately, Lopez had the highest percentages of decrease with a 45% reduction in dollar volume and a 33% reduction in number of transactions when comparing 2023 to 2024.
The current inventory level is brutal for all property types, but we assume that it will increase by Spring as it has done in past years. Sellers typically remove their properties from active marketing during the holidays as they want to give the listing a break and they may want to entertain regularly, which is difficult while the property is on the market as your home must remain show ready. Most will consider listing again in the Spring after they can process the Winter clean up, so their curb appeal is high. Many hope to close during the Summer of 2025 and listing by Spring gives them that edge as the average days on the market plus the number of days to process the transaction equate to a Summer closing.
In the expected market conditions for 2025, buyers will be granted time during their transaction to process their financing, home inspection, feasibility study and even close a home that they have sold somewhere else. The typical transaction time is 45 days if financing is involved, and 30 days if not. Most sellers will not accept an offer contingent upon a home sale elsewhere, unless we are in the shoulder seasons of our market such as Fall and Winter.
Highlights of our market:
· The median home, condominium and manufactured home price for a 12-month period ending December 2024 for San Juan Island was $842,000 which is a 3.3% increase from 2023 when it was $815,000. The median home price for the same period for the County was $850,000 which is a 3.5% decrease from 2023 when it was $880,000. The median is a typical market price where half of the homes sold for more and half sold for less. Median price is not an appreciation/depreciation calculation but merely a trend. It lags the market in general plus we use a 12-month period for analysis due to the size of our market. It is unusual for the median home price on San Juan Island to continue on an upward trend when the dollar volume, number of transaction and inventory levels are all on a downward trend. As the County is now showing a decrease in the median price, the San Juan Island’s median home price should stabilize during the first part of 2025, if the market remains on the current trend. Or it could be that our prices are just going to continue to increase, regardless if the market is less active.
· The average days on market number (DOM) for homes, condominiums and manufactured housing on San Juan Island was 86 during 2024 which is a slight increase from the DOM of 83 during 2023 for the same 12-month period; however, it does vary on the price range. The average days on the market for homes for the County during 2024 was 93 days which is very similar to the 92 in 2023.
· On San Juan Island, 40 sales for all types of real estate closed in excess of $1M each with a total 94 for the County. Orcas had a total of 45 sales in the category. The number of sales is lower in 2024 than in years 2023, 2022 and 2021 for both San Juan Island and the County.
· Inventory levels on San Juan Island and the County for all property types remain very low. On San Juan Island the total inventory as of January 2nd was 67 with 56 active and 11 pending, slightly better than it was on January 3, 2023. The total inventory for the County was 151 with 128 active and 23 pending. Again, a slight increase; San Juan Island has an increase of 16% and the County has an increase of 3%. The most notable is the percentage of pending transactions which reflects an increase of 58% for San Juan Island and 53% for the County.
· During the last year, sellers negotiated on average 4% off the list price of homes at the time of sale on San Juan Island and an average of 4.8% off the list price of homes in the County. These percentages are a slight decrease in the amount of negotiation for San Juan Island but a 1.4% decrease for the County. Again, the percentage will vary subject to price range and this calculation includes all homes, condominiums and manufactured housing.
· Sellers negotiated on average 7.2% off the list price of land at the time of sale on San Juan Island and an average of 11.1% off the list price of land in the County. The demand for unimproved property decreased as land and construction loans offered an outrageous rate of interest, and that coupled with the ever-increasing cost of construction cooled land sales. Sellers had to negotiate much more in 2024 than they did in 2023.
Many of the national economic forecasters working for Zillow, Red Fin and the National and Washington Association of Realtors are predicting that mortgage interest rates will decrease in 2025. However, they said that last January and the mortgage rates failed to reduce as much as the prospective buyers had hoped. It was an election year and very volatile. The mortgage rates are set by the lenders and the market, to some extent. They are influenced by the Federal Reserve, bond market and other indexes. Only time will tell how much the rates will decrease in 2025. It may be possible that the new government will convince those in control to move the needle as inflation appears to be under control. Inflation under control is defined as prices will not be increasing, but there is no guarantee of decreasing.
Most of our buyers purchasing in excess of $1M typically do not use financing unless the rates are very attractive and then, it makes sense. Unfortunately, we have numerous buyers in our market that do need financing and something needs to change so that these families can reach the goal of home ownership.
With the new government in place supported by the majority of the voters, many buyers may be very optimistic and ready to move off the fence. They may very well be interested in moving their funds from the stock market into real estate as it is one of the recommended investments. Although so is crypto and it is popular with the younger crowd. For our island buyers, who are in the age group of 45-65, not so much.
As a hardworking agent in real estate on this island, I feel good about the market in 2025 and am looking forward to it. I much prefer a more balanced approach to price negotiation and transaction management. A balanced market makes it more equitable for the parties involved versus a market which favors one party over the other and the answer is always “no”. I sleep better at night when I believe the transaction that I worked on produced results that treated all parties fairly.
If you have any questions about our market, please be sure to contact me or my partner, Terri Zambrovitz.
The information listed above was generated from a search by Coldwell Banker San Juan Islands from the Northwest Multiple Listing Service and represents listings and closings from all of the brokerage firms on San Juan Island, not just Coldwell Banker San Juan Islands Inc. If your property is already listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other brokers.
Written By:
Merri Ann Simonson
360-317-8668
1-10-25