Booming real estate market

A dive in the local economy this year has not affected the real estate market.

While retailers and construction businesses, and county government, continue to grapple with a slowdown in sales overall, investment and interest in local real estate is booming, according to figures furnished by San Juan Title Co.

Below are the number of sales, and the total value for all of 2003, plus those for the first nine months of 2004.

Year ... Total Sales ... Total Value

2003 ... 626 ............. $189,774,528

2004 ... 656 ............. $214,890,323

“The sales have gone crazy,” said Toni O’Brien, president-manager of San Juan Title Company in Eastsound. O’Brien believes that many of the purchasers are buying second homes, or they’re planning for retirement. O’Brien also believes the sellers are “people who can’t afford to stay here.”

John Dunning, designated broker at Windermere Real Estate’s San Juan and Orcas offices, says the second home market is probably the strongest single segment of the real estate industry today. Other factors, Dunning said, are the “cashing out of other areas -- there is a real feeling that California has peaked.” Real estate is perceived to be an excellent financial investment, Dunning added, saying many of the buyers are baby boomers.

Deborah Hansen, president of the Orcas Island Board of Realtors, believes a big part of it is low interest rates, together with “rumors of it going up after the election.”

The number of sales for Orcas and San Juan islands for the first nine months of 2004 is fairly close. Orcas counted 248 sales, or 21 fewer than those on San Juan. In terms of value, however, San Juan was way ahead, with total value of sales at $100,147,475.97. This compares to Orcas’ $76,988,026.66.

The boom was good news for the San Juan County Land Bank, which set a record for income last month as a result of real estate transactions countywide. Known as the real estate excise tax, or REET, the Land Bank collects 1-percent of the value of local real estate sales on each transaction, which the buyer pays.

In September, the Land Bank collected $403,043 from its portion of local real estate sales, according to the county Treasurer’s office. The agency received about $305,700 the month before. Last year, the Land Bank, which collects about 10 percent of its annual income through investments, donations, and a local conservation futures tax, earned $2.4 million in REET revenue.

Nancy Greene, chairwoman of the Land Bank Commission, said September’s revenue is the largest amount of income the agency has amassed in one month during its 14-year history. By comparison, in 1992 the Land Bank earned a total of about $900,000 for the entire year, Greene noted.

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