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09/26/2007: "Property Sales up 2nd quarter over 1st quarter"

By Merri Ann Simonson

During the first half of 2007, an average of 23.5 transactions per month closed on San Juan Island. In reviewing the first half of 2007, the real estate market volume on San Juan Island was less active when compared to the same period in 2006. The volume lags 2006 by $16,415,949 or 18%. The average number of transactions each month during this period is down 16%, which -put in perspective- is an improvement over the first quarter, when the average was down 30%.




Overall, decreased volume or averages doesn’t necessarily equate to reduced property values. The properties on San Juan Island are continuing to appreciate at a respectable rate. The sales price reductions that REALTORS® have been receiving for listed properties are due to increasing levels of inventory thus increasing competition and changes in seller motivation. In addition, some of the sellers may have wanted to “test the market” with forward pricing and now have decided to adjust to market.

The third quarter may end up similar to the first half, but by year-end we expect we may make up some ground based on the number of escrows and their sales prices that are scheduled to close this year.

Even though the overall market on San Juan Island is lagging 2006, Coldwell Banker San Juan Islands’ real estate volume is tracking very closely with the same period in 2006.

TRANSACTION RECAP SUMMARY
According to the Northwest Multiple Listing Service, the inventory level on San Juan Island is 355, of which 35, or 10%, are under contract as of September 6, 2007. Our inventory level has been on the rise since January 07 but has leveled off this last quarter. With the increased inventories, buyers have more opportunities in selection and pricing. This may not last long considering statistics of demographic demand and our potentially limited supply.

The average Days On Market (“DOM”) for all types of property and price ranges on San Juan Island is 141 days for the first eight months of the year. Residential homes are selling more quickly with an average DOM of 132, while vacant land averages out much longer at 171 days. A metropolitan area such as Seattle runs much lower with an average of 41 DOM due to higher turnover and that the area supports a wider buyer demographic. In reviewing the historic DOM for San Juan Island, 2007 is much lower than years 2006 and 2005 when the average DOM was 166 and 208, respectively.

The length of time a property stays on the market is a direct reflection of the property pricing. Accurate pricing and the best marketing help sellers receive the most for their property in the shortest time frame. If a well marketed property isn’t selling, we have a saying in the real estate industry, “Lower the price and they will come.” The biggest motivating factor for buyers is price. Since properties on San Juan Island that are priced at market sell within a shorter period, the explanation for a lower DOM number for 2007 is that sellers are pricing closer to market or more accurately. Sellers recognize that they must stay competitive when inventory levels increase.

How long a property has been on the market is a frequent question to agents from their buyers. This information may be used by the buyer to calculate the seller’s motivation level.

AVERAGE DAYS ON MARKET DETAIL BY PRICE RANGE
The information listed above was generated from the Real Market Data LLC and searches conducted by Coldwell Banker on the NWMLS. It represents listings and closings from all of the brokerage firms on San Juan Island, not just Coldwell Banker San Juan Islands. Inc.

(Merri Ann Simonson is the Sales Manager for Coldwell Banker San Juan Islands.)