By Merri Ann Simonson

In reviewing the year-end results, the sales dollar volume for the real estate market on San Juan Island was $60,116,241, which is 5% less active when compared to the $63,349,657 sales volume in 2010. The volume in 2009 was $66,069,632. The volume has been trending downward since the peak in 2005 but in lower annual increments since 2008. On San Juan Island we closed an average of 13 transactions per month which is very similar to 2010.

Total County volume in 2011 was $125,442,472 as compared to the $140,618,144 in 2010. Overall the county’s volume decreased by 11% which is disappointing.



To recap, San Juan’s volume was down 5%, Orcas was down 27%, Lopez was up 25% and the outer islands were down 20.5%. The majority of the gain on Lopez is attributed to one waterfront home that closed at $3.5 million, which placed upward movement on the median home calculation for Lopez as well.



Each island is unique and the impact to prices on each can be noticed by reviewing the median home and lot prices for the year-end as shown below:



The median home price calculated above is for previously owned homes on less than 5 acres. Each of the ferry serviced island’s median pricing mirrors the volume trend; San Juan was down 5%, Orcas was down 26%, Lopez was up 24%, the outer islands were down 18.3% with the overall County’s median price decreasing in 2011 by 16%. Demand affects volume and value.



Across the board, median lot prices have all decreased. The range is a low of 9% for Orcas, to a high of 32% for Lopez and the outer islands. The county’s median lot price of $105,000 was a decrease of 13.3% from 2010. It takes volume to stabilize the median price calculation and in the case of the land sales in 2011, the land sales volume totaled approximately $24.8 million as compared to the $40.6 million in 2010. This equates to a 39% decrease in volume.

The volume decreases can be attributed to the nationwide real estate market in general, unavailability of financing, unwillingness of investors to purchase, high risk of speculative and custom construction, and the non-existence of waterfront lot sales due to potential new set back regulations being proposed by the county. Waterfront lots were traditionally the highest priced unimproved parcels in the county.

From the all time high in 2007 when the county’s median home price was $490,000, the median price has decreased 25.4% to $366,000. The median home price calculation includes all types of homes; cabins, homes in town and waterfront homes.

The median home and land prices will probably not increase until the amount of high-end property sales increase. The typical newcomer to the island is interested in waterfront or water view properties, which tend to be higher priced. Our market is primarily a second home market and prospective buyers must have confidence in the economy; nationally where they live and locally where they hope to purchase.

Recovery, and then appreciation, in the housing market nationally and locally will be decided by the consumer, and it will be timed around the amount of inventory and bank foreclosures. San Juan County had a total of 55 Trustee’s Deed recordings in 2011, after adjustment for trust work. In 2010 the County had 34 deeds recorded. The Trustee’s Deed is recorded when the property is transferred from the borrower to the beneficiary or successful bidder at the time of foreclosure. Often it takes lenders months if not longer to actually market these acquired properties. Prior to the foreclosure, the lender must record a Notice of Trustee’s Sale and in 2011 the County had 67 notices recorded. Some of those borrowers are able to sell their homes or bring their debt current and reinstate their loan which avoids the foreclosure. There were a total of 9 Deeds in Lieu of Foreclosure recorded during the year.


During 2011, per the NWMLS, there were 23 properties sold that were banked owned; 11 on San Juan, 10 on Orcas, and 2 on Lopez. Eighty two percent or 19 of the bank owned sales were priced under $300,000. In the County a total of 54 homes closed under the price of $300,000 and 19 were banked owned or 35%. Additionally there were 4 short sales, all on San Juan Island. Unfortunately the high level of Bank owned and short sale activity is brutal on any seller in that price range. In the County we closed a total of 141 homes and condominiums during the year and 23 of those were bank owned or short sales which equates to 16% of the closed inventory. The state’s percentage range is 12-17% (through the 3rd quarter only).

The percentage of bank owned properties has increased over last year and as mentioned, they have had a terrible impact on all homes valued under $300,000. Hopefully, the banks will work through their inventory in a timely manner, and once the foreclosure inventory is absorbed it will help that segment of the market. We currently have 25 bank owned properties and 13 short sales listed and total inventory of 707 for the County. The distressed properties equate to 5.3% of the total inventory. Per the NWMLS for the Counties that they serve in the State, there were 56,699 closed transactions for homes and condominiums in 2011. Of those sales, 15,747 or 27.7%% were banked owned, and 5494 or 9.6% were short sales.

The entire county benefits from the sale of real estate and the depressed conditions are reflected in budget cuts throughout our government and private sectors. Real Estate is a huge funding mechanism for our county’s government, land bank and local businesses. Real estate sales dollars flow into construction, retail, service providers and tourism, affecting everyone’s lives.

One would think that the county would be focused on all issues that have a direct impact on the real estate market. It is imperative that we do everything possible to help in the recovery of our real estate and construction industries and avoid anything detrimental such as creating unjustly stringent land use regulations. Our county government and long range planners must take into consideration our local economy and the livability of our community as well as the environmental impact when making decisions.

The County Council has been agonizing over the update to the Critical Area Ordinance which has had an impact on the sale of waterfront parcels and those upland parcels that have wetlands. In past years, waterfront parcels were one of the most desirable investments due to appreciation, ability to build your dream home and location. Now they are the most depreciated investment and nearly unsalable due to the uncertainty surrounding the update of the CAO. Few buyers will invest in waterfront unless they know where and what they can build on a parcel. Further, what will be involved should a variance be required on the parcel? These questions have been left unanswered for the last 3 years and the impact is obvious. In 2011 San Juan County had 4 waterfront lots sell or 1.2% of total number of sales. In 2005 we had 63 waterfront lot sales or 6.1% of total sales with similar percentages ranging from 7.4%-5.5% during 2006-2008. The percentage started to decline in 2009 when the County initiated the discussions around increased set backs. The few waterfront lots that have sold since 2009 have been to buyers that immediately started their construction or to neighbors as buffer lots with no intention for construction. These numbers evidence the uncertainty surrounding the CAO. The decrease in the percentage of waterfront lots sales to 1.2% will be the evidenced used in the future lawsuits should the Council decide to increase set backs and convert them to buffers. The depreciation attached to waterfront lots now due to uncertainty will have a long term effect and there has been a similar affect on waterfront properties that are under improved such as cabins.

The national and state economies have had an impact on our real estate volume as evidenced in this report but the LOCAL government has had a direct impact on waterfront sales. Our government is unable to show us the problem created by housing near the shoreline and will not trust property owners as good land stewards.

We recognize that this is a strong opinion to state but we are running out of time. If you are concerned about the value of your property, where you can build on your property, what you can build, losing the view you thought you would have or the ability to remodel or add to your existing home, it is imperative that you let the County Council know now.

In spite of fewer waterfront lot sales, we at Coldwell Banker San Juan Islands Inc. had a strong 4th quarter and have started off 2012 with closings and showing activity above our 2011 monthly average. We think 2012 is going to be our break out year. Hopefully, 2012 will bring a good resolution for the update to the CAO.


Median is defined as a typical market price where half of the homes or lots sold for more and half sold for less. One should also note that the median calculation includes all types of properties; waterfront mansions to cabins; small town lots to waterfront parcels


(Merri Ann Simonson is an Associate Broker/Sales Manager for Coldwell Banker San Juan Islands Inc. She may be reached at:360-317-8668 and email at: simonson@sanjuanislands.com )