The third quarter results for San Juan Island and San Juan County are continuing to reflect a downward trend in volume and transaction numbers. Per the NWMLS, the dollar volume year-to-date on San Juan Island was $92,982,280 with a total of 98 transactions. This reflects a 21% decrease in the dollar volume and a 22% decrease in the number of transactions.
For San Juan County, the total dollar volume was $206,075,546 with a total of 217 transactions. The County’s decreases were 18% in dollar volume and 13% in number of transactions.
The downward trend started at the end of 2021 and has continued to date. I attribute the market correction to high inflation, low inventory, higher interest rates and in 2024, the uncertainty of the political environment. Rightfully so, most everyone appears to be focused on the issues around the election process. Many of the buyers in our marketplace are purchasing for future retirement, as a second home or investment. Therefore, buying a property in the San Juans is not their highest priority with the distraction of the current political events.
Even the seasoned top producing agents are experiencing decreases in their volume and number of transactions.
It is difficult not to read some of the theories that surround the election. Some predict a stock market adjustment, possible recession, higher inflation, lower interest rates, and even civil unrest in certain areas.
The good news is we live in San Juan County, which is paradise and the best place to be, should some of the predictions come to fruition. Once the uncertainty passes over the election and whoever is elected starts to work their agenda, our local real estate market will stabilize.
The current inventory has been building up over the last few years. In some months, the levels were impacted by the seasonal adjustments and the holidays; but overall, it has been an upward trend, and the total has returned to the November 2020 levels.
As of September 30, the total inventory for San Juan Island was 136 listings for all types of properties with 21 of those pending in escrow and 115 were active listings.
For the County, the inventory total was 333 listings with 56 of those pending and 277 active listings.
The numbers reflect an increase since January 2024 of 135% for San Juan and 114% for the County. An increase in our inventory is needed to aid in a favorable market correction. Higher levels of inventory offer buyers more selection and encourages them to return to our market.
The number of pending sales has been stable for the last 60 days for the Island and County. The current number of pending sales is 21 and 56, respectively. These pending numbers are very similar to October 1, 2023; however, in that month we had a fewer number of listings. San Juan had 33% fewer and the County had 24% fewer, as compared to October 1, 2024.
Typical Profiles of our Sellers and Buyers:
Sellers:
· Most of our sellers are in the age group of 65-85 and 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 their list.
· Our typical seller that has made the decision to sell their primary residence and leave the island, is highly motivated as they desire to expedite the change and get on with the rest of their lives elsewhere. They have enjoyed living in the islands but realize that as one ages, living in the islands can present challenges.
· Some of the new listings originated in 2024 were for investment properties or second/third dwellings for the property owners. This is a less motivated group as the multiple offers and escalated prices are not occurring in our current market. Investors tend to “wait out” a market for one with better opportunities. As the rental market in the islands offers a very low vacancy factor, it is very convenient to rent their investment until the market improves.
· Many sellers are recognizing that the level of buyer activity is lower than in 2023 and the seasonal time of year is upon us and they and are electing to reduce their price to attract the buyers.
Buyers:
· Most of our buyers are in the age group of 45-65 and desiring to purchase a primary residence, future retirement home or second home to enjoy with family. Investors will return to our market when the opportunities for ROI and financing packages are better.
· Most buyers purchasing more than $1M are paying cash. The high interest rates have impacted those buyers under $1M the most.
· Most 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 number and extremely busy.
· As there are fewer multiple offers and “bid wars”, there is less competition for the active buyers, so some are initiating an offer that is less than full price for their first submission.
· 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.
· As the market currently favors the buyers, many are exploring all their options and viewing the majority of the properties in their category. As the inventory is increasing, they are offered more selection, and some are not willing to move forward unless the property “checks all their boxes”.
If you have any questions about our current market, please be sure to contact me. With over 29 years on the island in real estate, I have been through a few market changes.
Written by:
Merri Ann Simonson
Coldwell Banker San Juan Islands Inc.
360.317.8668
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