To all affected by the local real estate and construction industries: the real estate market is improving.
We at Coldwell Banker San Juan Islands will end up 2011 a bit ahead of 2010, which was ahead of 2009 by 15 percent. Further, the 4th quarter of 2011 has been very active in both showings and sales. Many of the sales that are taking place will actually close in the first quarter of 2012 so we should be starting off the New Year comparatively well. We are also seeing increases in people making plans to come up and look at property next spring and summer.
The day before Thanksgiving was a notable point in time. We have a list posted in our office that shows what properties we have sold and on that day we posted 20 sales. It was the first time in years we had reached that point. To put things into perspective, at the height of the market we would generally have 25 to 35 sales on the list. At the depth, in the winter of 2009, there were 3. As of this writing there are 16 sales on the list due to some of the sales having closed. That’s good that they are closing, though. The ratio of sales closing vs. falling through is getting better too. We’re also working on more than a handful of new offers.
Three primary factors we use to track the market are number of sales, dollar volume and pricing. Looking back we can see the downturn in our local market started in January of 2006, our lowest inventory point. We left bottom as far as dollar volume and number of transactions go in the spring of 2009. Pricing is still bouncing along bottom due to more supply than demand.
A reputable real estate industry analyst was recently being interviewed on TV. He reported that sales of existing homes nationwide were up 10.6 percent and that a third of the sales were to investors. The person interviewing him said she hopes more people wanting to purchase homes as residences will be able to get in on this market too. I agree. The window of opportunity that is open now is likely a once-in-a-lifetime event when considering prices, selection and interest rates. For our market, it doesn’t take much of an increase in demand over supply to substantially affect it.
We have been going through the greatest drop in the real estate market since 1929. Following the greatest drop will eventually come the greatest rise. There are many solid demographics that will help this occur. For instance, in addition to our normal sources of demand, we now enter the first year of 79,000,000 “baby boomers” reaching retirement age and we certainly live in one of the most desirable places to retire. The job market in the Seattle area is one of the best in the nation. There are 118,000,000 “echo boomers” (children of the baby boomers), that are starting to buy homes of their own, which will allow the baby boomers to move to places they want to retire.
Steve Buck is the finance manager for Coldwell Banker San Juan Islands.