The Island Guardian
Locally Owned & Operated
(360)378-4900 - PO Box 38, Friday Harbor, Wa 98250
The Island Guardian is a member of the Society of Professional Journalists
xx Home | News | Business | Environment | Lifestyles | Entertainment | Columnists | Archives | Classifieds | Nag
Current news
Government News
Political News
Service Organizations
Guest Editorials
Real Estate
Weekly Nag
Weekly Nag
Letters to Editor
Letters to Editor
To Contact the Editor

Island Guardian

San Juan Island Real Estate Market Report


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands

The second quarter results which complete the first half of the year for San Juan Island were similar to the first quarter. Per the NWMLS, the dollar volume on San Juan Island was $54,508,838 with a total of 81 transactions. The numbers reflect a 4% decrease in dollar volume and a 26% decrease in the number of transactions as compared to the same period in 2018. However, it was a slight improvement over the period of 2017 to 2018 when the volume decrease for the same period was 22% and the decrease for the number of transactions was 18%. For San Juan County, the total dollar volume was $125,503,460 with a total of 192 transactions. The County’s decrease in volume was 13% with a 22% decrease in the number of transactions.

6-3-2019-recap-of-SJI-and-SJC-volume (47k image)

So, the elephant in the room is that San Juan Island’s 2018 year-end figures reflected a decrease in volume and in the number of transactions. San Juan County ended the year with a flat volume level and a decrease in number of transactions. Obviously, when the 2018 information is combined with the first half of the year results, it demonstrates a continued slow-down in our volume and sales. Why?

Interest rates are good, regional employment is fabulous and our local prices didn’t over-heat. Per the NWMLS report, the state is robust but moving from a “hyper-market” in some areas to one where a correction is underway compared to last year. Further the report states many Counties are experiencing increases in prices and an increase in medium home price, but they note year-over-year decreases area-wide in both the volume of new listings and closed sales. They state that 50% of the areas are robust. We are not one of the robust areas.

6-30-2019-inventory-recap (43k image)

As of July 5th, we have 255 properties listed with 28 under contract or 11%. These figures reflect a higher inventory level but lower pending ratio as compared to the same period in 2018. Some categories of listings are low in inventory but there is an ample number of properties for buyers to select from in most segments of our pricing.

In our market, when a home is priced at or slightly below market, we have noted some multiple offers and the price might have even been bid up. However, most of our sellers still need to negotiate with a buyer to reach an agreeable contract. Year-to-date, 49 sellers for homes listed under $1M have negotiated on average of 2.8% at time of sale. For the same group of property owners, 18 or 36% had to lower from their original price an average of 5% to attract a buyer. Those homes were on the market for an average of 157 days which is fewer days than the average in 2018.

Sellers for homes in excess of $1M, of which there were 9 on San Juan, negotiated on average 3.9% off list price. Those same property owners reduced their price from their original list price before attracting a buyer an average of 2.8%. Those homes were on the market for an average of 119 days. I made the executive decision to remove the Miller property on Roulac Road from the data calculations in this paragraph and chart below as it skewed the numbers terribly. Due to the uniqueness of the property, that seller negotiated 14.6% off list price and had to reduce the price 23% before attracting a buyer. The home sold for $8.5M.

Landowners in all of the price ranges, have negotiated on average 14% off list price on San Juan year-to-date. They reduced their prices from the original list price on average 2.3% before attracting a buyer.

6-30-2019-recap-of-seller-neg (27k image)

Ultimately, the pricing decision is always the sellers and it is based on their motivation levels. They often obtain an opinion of value from at least one broker, if not more, which aids in their decision process. In an upward trending market, most sellers price against inventory versus sold comparable properties. In a correcting or slower market, sellers should price based on how long they want the property to be on the market. Sellers should consider the average days on market for other similar properties as part of the process.

If a seller overprices or fails to have the property in good condition, it will only cost them time and money. Sellers can’t afford to be tuned out to what the market is saying.

It is positive that the average percentages negotiated off list price have continued to decrease over the last few years.

The medium home price for the last 12-month period ending 6-30-2019 on San Juan is $535,000 and the average was $731,744. This is compared to $506,500 for the median and $687,300 for the average for the 12-month period ending 6-30-2018. The median and average for land sales also reflects an increase over 2018. This explains the fewer number of transactions as the individual sale amounts are higher. This is not a calculation of appreciation but merely a trend; a good one, at that.

Sales in excess of more than $1M have always played a role in our San Juan County market. Year-to-date, we have closed 23 compared to 30 last year same period. We have 11 pending versus 13 last year same period. We currently have 112 active listings in this category.

“The Why?” to this market is a puzzle to me so I will attribute it to a regional correction. However, I will note that the volume and transaction numbers are down but the high producing agents, just as last year, are doing very well. I have personally closed more sales volume this year as compared to last and I know the individual volume is strong for many agents on San Juan and Orcas.

I propose that when the volume is lower, some agents continue to make things happen.

Advice: Summer is the most active time of the year in our market

Buyer’s Advice: Rates are down, inventory has increased and offers a great selection plus, our prices are decent.

Seller’s Advice: Fewer more discriminating buyers so you need to price at market.

If you have any questions about our real estate market, please be sure to contact me.

Update to Our Internet Connection


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands

Rock Island has been busy for the last 4 years installing the base structure for our fiber and other internet connection options throughout the County.

I decided to write this article as a layperson so that the options for our Internet service could be easily understood. I have purposefully not used acronyms and the technical terms. I hope that this article won’t make the technical persons in the industry LOL, too much.

As a REALTOR, I can state that internet reliability is discussed as part of every real estate transaction. Islanders, as well as newcomers need to be connected and they desire their families to visit and, of course, the children and grandkids must have devices.

As I understand, there are several avenues for consumers to obtain Internet service in our County and they include the following:

  • Dialup – Internet through the telephone line, which is very slow service. Basically obsolete.

  • DSL – Internet through the CenturyLink telephone line and the level of service depends on your distance from the central office; 0.5 to 2 megabits per second is typical, but they will sell you 10 which a few people on San Juan do receive. The service is inconsistent and dependent on well-maintained copper lines and the most unfortunate event is you must work with CenturyLink. Rock Island can also provide the DSL service using the CenturyLink telephone line which is what I recommend, if DSL is your only option.

  • Satellite Service – Internet through a satellite connection. The level of service can be up to 12 megabits but the delays in signal are significant and high data costs are an issue.

  • LTE from Rock Island – Rock Island partnered with T Mobile and now we have 39 cell sites in the County with 11 on San Juan. Service speed is 10-25 megabits for $75 per month. They have a seasonal rate for this service for $49 if you don’t live here full time. For this option, you do need line of site with one of the towers.

  • Fiber Optic from Rock Island – Internet service with 30-1000 megabits per second; the gold standard. Reliable and scalable. $80-$180 per month based on the speed you select. They have seasonal rates for this service starting at $55.

How do we get it?

Visit the Rock Island website or email to see if your property is within a service area. Rock Island has installed fiber to the majority of the main roads, but it is the home-owners or subdivision homeowner’s association responsibility to arrange for the fiber to be installed in the side roads and to the actual residences. The “middle and last mile” as it is known in the industry.

Rock Island, a wholly-owned subsidiary but operating as a separate entity from OPALCO, provides the Internet service to islanders. Rock Island does not offer a triple play for HD pay TV.

Rock Island is also providing the associated Internet support and is working closely with local property owners and business owners to upgrade their service.

There are dozens of neighborhood plats that have already been served with fiber. As a group they organized to arrange for the installation charges via loans or special assessments. This approach allowed all property owners in the area to share in the middle mile costs and then the individual homeowners absorb the cost to install down their driveways. Rock Island also has made up to $1,500 of incentive credit available to the last mile builds. The costs to connect to fiber varies, but $3,500-$5,000 is a good average estimate. Generally, the trenching cost per foot is $15-$20

The neighborhoods without Homeowner Associations have struggled to get organized enough to be placed in the queue for fiber. Where possible, Rock Island has provided the LTE option to some of the neighbors within an area that hasn’t agreed that fiber is in their future.

Rock Island’s monthly fees range from $95-$150 subject to the speed you select. There is also a one-time hookup fee of $150. Digital phone can be added for just under $20 a month.

Roche Harbor Resort was on the front line for fiber installation and has benefited accordingly. They now offer internet and telephone services to the transient population staying at the resort and in the marina. Rightfully so, Roche Harbor deemed having high speed Internet as their number one guest amenity. Guests stay longer when they can keep connected to their work and family.

As property owners, we need to be the ones that accept the responsibility and bring the fiber to our homes. We need the level of communication, safety and entertainment that it offers. The fastest growing segment of the general population joining Facebook is those individuals that are over 65 years old. I need good connectivity as I am a grandma plus I need to process real estate out of my home office.

My LTE experience was very positive. DSL wasn’t cutting it at 2 mb and it took a while for the new technology for me to hook up to the LTE. I was a rare exception as an LTE customer, as my signal wasn’t great from the start. I needed additional items to get my connection working. The cost was around $600 for the equipment/labor and it required a boom/basket truck and a full day of work for the installer. The install required exterior mounted equipment which I wasn’t fond of, but now, I don’t even notice it. I am pleased to say I enjoy 20-25 mb and can work out of the home as needed.

Advice: If you are constructing a home, remodeling or just excavating on your site, it is prudent to install conduit for fiber even if you don’t plan on actually hooking up to the service. If your neighborhood is doing any excavation for roads or water lines, the homeowner’s association should contact Rock Island about installing fiber.

This islands have always strived not to become a place of “those that have and those that have not”. Historically we have always applied that to not wanting to develop into a location such as Martha’s Vineyard or Jackson’s Hole. It may be time to consider that the “have nots” will be those homes without good Internet service.

As a REALTOR, I know that buyers now include whether a home has good internet service as part of their criteria. Having good connectivity is imperative and all property owners should take advantage of the Rock Island programs.

Rental Property Options


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands

San Juan County currently has several mechanisms for legally renting a home in the County.

The information below is meant for informational purposes only and does not incorporate all the rules and regulations. It will however provide those who want to learn more about residential renting of homes in the County an overview of at least some of the things they need to consider, and do, prior to listing property for rent.

Long Term Rentals. No permits are required. A long-term rental is typically a term lease and can also be month-to-month. Like short term rentals, professional property management is available and the rates are normally equal to one month’s rent paid at the commencement of the occupancy. If rent, collection and property monitoring is included, then the fee is generally 10% per month.

Vacation Rentals. A vacation rental permit from the County is required. Vacation rentals are allowed in all Land Use Districts except Resource, Conservancy and Natural. Further, Town prohibits them unless the property is commercial. The permit application can be processed by a property owner or by a professional who specializes in land use permits. The price range for a Provisional Use Permit, including the consultant is $2,300-$3,500. As long as the property lawfully qualifies, the County should approve the permit, even if a neighbor has an objection.

If the property is improved with a main home and a guest house, only one of the dwellings may be designated as a vacation rental. If either the main or guest house is a vacation rental, the other dwelling must be owner occupied or rented to a long-term tenant. A guest house may be internal, attached or detached.

Under a vacation rental permit, the tenant rents the use of the entire house – a house is defined as one that includes at least a kitchen, bath and bedroom(s).

Details of all County requirements can be reviewed online under Vacation (short-term) Rentals of Residences or Accessory Dwelling Units (guest houses) in the San Juan County Code.!/SanJuanCounty18/SanJuanCounty1840.html#18.40.275

AIR B&B. Surprise, this requires a B&B (Bed & Breakfast) permit from the County, and they are not allowed in all land use designations. There are two options; B&B Residence which is 1-2 bedrooms or a B&B Inn which is 3-5 bedrooms. The permit allows the rental of a bedroom (which may include a bathroom) on a nightly basis, and the tenant shares in the kitchen and other rooms.

No B&B permit is required for the renting of a bedroom for a period of at least 31 days or more.

The requirements for each type of B&B vary and are detailed in Hospitality Commercial Establishments – Bed and Breakfasts Section 18.40.250 of the San Juan County Code.

I have generally defined B&B restrictions below; however, a property owner should read the entire regulation when considering their property’s qualifications. The land use designation (zoning) of the area, and the site and building configuration are determining factors in how a building may be rented. Some general statements:

B&B Residential – 1-2 bedrooms.

  • Maximum occupancy limit of 6 guests.

  • Must be owner-occupied single-family residence.

  • Parking must be provided.

  • Maximum of 3 guests if located on a private non-surfaced road and when the residence is more than 500 feet along the non-surfaced road.

  • Maximum guest stay is no more than 30 consecutive days.

B&B Inn – 3-5 bedrooms.

  • A standard of three people per room is used to determine maximum capacity.

  • Must be proprietor-owner occupied single-family residence.

  • Parking must be provided.

  • If the property is served by non-paved County road for more than 500 feet, the permit will be limited to three guest rooms.

  • Not allowed if access is by means of a shared private non-surfaced access road.

  • Maximum guest stay is no more than 30 consecutive days.

Other Considerations

Covenants, Conditions and Restrictions (CC&Rs). As you may be aware, many plats have voted to restrict vacation rentals, as they deem them as a commercial or non-residential use. Even though the property may qualify for a vacation rental or B&B permit under the County code, the plat CC&Rs will over-rule the County’s allowed use. Many plats made the decision to prohibit vacation rentals due to negative experiences. They most likely considered that some tenants were not respectful of the adjacent property owners with their music, loud voices and trespassing. Further, with delicate water and septic systems, vacation rental occupants can add pressure to these systems unless the tenant receives proper instructions.

I was unable to locate any statistical data to support that a person on vacation does more dishes, laundry or uses the bath facilities or road systems any more than a family of four living in a home. My guess is they do use the refrigerator door more to get a fresh beverage and I assume the BBQ never gets a break. I can’t imagine any person on vacation creates more recycle than my family, but it is possible.

Prior to making a decision about which type of rental is suitable and what is best for the property, an owner should consider the expenses associated with each type of rental, proposed income, and the potential impacts. One expense commonly overlooked is B&O (Business & Occupation) tax on the income.

Short Term Property Management. Professional property management fees vary slightly and there are only have a handful of property managers on the island. The fees may sound high at 30-35%, but a property owner should consider that these firms are operating your investment similar to a hotel and managing crews for repairs and cleaning. They have service providers on staff or available that respond to their requests in a timely manner. If you decide to self- manage your property, the honeymoon with vacation rentals may be over in a short period of time.

An important note: Those who manage long term rentals for other people are required to have a broker’s license and maintain a trust account. Management of short-term rentals does not require a broker’s license.

Consultants. I highly recommend that you utilize a land use consultant for the permit process. The consultant will not only guide you through the process, they will assist you with the discussions you may need to have with adjacent property owners, with County officials and help you hire service providers such as surveyors, septic inspectors, well testers, etc. They can also give you a list of suggested rules to post in your home to ensure that the tenants understand the home’s functions and restrictions.

Town Water. Homes on the Town’s water system that are not zoned commercial do not qualify for a vacation rental permit. The best rumor I could find on this decision was at one time the hotel, B&B and motel owners felt that single family homes with vacation permits were direct competition and asked the Town to restrict the permits; water was a good vehicle to do so. However, now that periodically during the year the hotels, motels and B&B are fully occupied, it may be something that the Town should reconsider. Again, is there evidence that a vacation rental occupant on Town water uses more water than a primary resident? I don’t’ see the town changing this regulation any time soon.

Insurance. For the operation of a vacation rental home or B&B the property owner should have adequate insurance. Their carrier must write a commercial policy, the standard rental policy assumes month-to-month or long term, not nightly. The property owner should also consider having a liability umbrella policy in the event of a major injury to the tenant. The property manager’s policy insures them, not the property owner. Commercial homeowner’s insurance may be twice the price of a standard owner-occupied insurance policy.

Owner Builder. If your home was built after 1988 under the San Juan County Owner Builder program, prior to selling or renting, you must have an Owner Builder Life Safety Inspection from SJC and all deficiencies corrected. This would be important to insure that your Homeowners Insurance firm doesn’t find a reason to disapprove a claim.

Local Regulations. The vacation rentals by owner (VRBO) and Air B&Bs are a young industry and not yet fully regulated in many cities. In 2018 our County Council updated our vacation rental permit guidelines and the result was a set of workable rules and regulations. As someone in the industry, I think they did a good job in updating the rules.

Impacts to Affordable Housing. Many believe that having so many vacation rental permits has an impact on the availability of affordable housing. However, one can note that the most successful vacation rentals offer many features; amenities such as views or water access and are large homes that can sleep several groups. These are typically not the type of home that would rent for a term lease for under $1500-$2000 per month. These homes would rent much higher and would not be in reach of some of our school teachers, retailers, construction workers, tradespeople and other middle class service providers. There are a lot of unanswered questions about the affordable housing solution in the islands but that is an entirely different topic that needs to be dealt with.

Economic Decision. Property owners will soon realize that neither vacation rentals nor long terms rentals “pencil” on this island. Rents may be high enough to pay taxes and insurance and some maintenance, but our levels do not typically meet or exceed the debt service of a highly leveraged property such as one with an 80% loan to value mortgage.

Many property owners here assume if Seattle is a robust market then the San Juan Islands are one as well, but that is not the case. Our sale and rental markets are very different from the metropolitan areas, and yes, a vacation rental in the Seattle area will debt service much better than one located in San Juan County.

I believe that the vacation rental versus long term question will resolve itself for homes that are valued under $500,000. When a property owner does the math and realizes that the net income is very similar for both a long-term tenant versus a vacation rental, the romance of vacation rental income will tarnish. It will be quickly replaced with a property owner’s overly burdensome, never ending, chore list of maintenance, repairs and tenant requests or monthly property management fees.

Tax Advantage. The strongest driving factor is the advantage of using your investment home for personal use when it is not occupied by a tenant. Your tax schedule E form offers a wonderful impact to your tax filing versus having only your second home write-offs. With an investment property, the majority of your expenses may be deducted from the income but only some expenses can be deducted for a second home. It is the best of all worlds; while using your home, you do some touch up paint or other chores and you may be able to write off your visit for repairs and maintenance. If your home was rented long-term, you would not be able to use it until the tenant turnover. Of course, the downside is you want to use it on July 4th which is one of the most popular and highest rental rate dates during the year.

Loans and Vacation Rentals. Lenders don’t like the commercial use that surrounds vacation rental activity in the home. They prefer owner occupied collateral or second homes loans were the home sits vacant when not being used by the owner. Very few lenders, if told, will fund a conventional conforming loan with a vacation rental as collateral. Most lenders do have a commercial lending department that is happy to loan, but at a higher interest rate and fee schedule. P.S. Not telling your lender is considered fraud.

Impacts to the Economy. Homes offered into the long-term rental pool provide local housing for islanders. Residents living and working here over the long term tend to have pride in community which results in maintenance of the home and may result in a lifelong commitment to being a San Juan citizen.

Vacation homes offer economic gain into the community and to the owner. While visiting, tenants enjoy retail therapy, restaurants, kayaking, and whale watching. Some may end up deciding that residing here is in their future.

B&O tax is generated back from the state into our local government.

Unfortunately, the vacation rental homes are mostly occupied in the summer months and this coincides with the second homeowners return and desire to hire staff or service providers to help with their property maintenance. These service providers may be the very ones seeking the elusive, affordable and long-term rental housing.

Bottomline. There are lots of pros and cons to the decision of whether to rent your investment property long or short term. If you follow the permit regulations and use a professional property manager to control the situation, the use of your investment as a vacation rental can be very beneficial. Bottomline, it is better for a home to be occupied than sit vacant for many months out of the year. Oh, and those tax write offs are a treat! Good luck with the decision process.

If you have any questions about real estate, please be sure to contact me.



IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands

The first quarter results for San Juan Island were very similar to the first quarter results last year. San Juan Island’s dollar volume for the quarter reflected a decrease of 12.5% as compared to the same quarter in 2018. The first quarters are often a roller coaster for our islands and are affected by weather, local and national events. The number of transactions was down 31%.

The County’s first quarter dollar volume reflected a decrease of 25% as compared to 2018 and the transaction numbers also reflected a decrease of 33%. The inventory level in some categories is having an impact.

 VolumeRecap (28k image)

The volume analysis clearly reports San Juan’s volume as lack luster and off to a slow start. The first quarter of every year is volatile and for San Juan, this year is no different.

As of April 2nd, the total inventory on San Juan Island is 175 for all types of properties, excluding business opportunities. An additional 24 are pending and in escrow or 14%, this is in contrast to years past. During the recession, up to and including 2013, the percentage of pending was much lower and in the 7-9% range. Since 2015, the percentage of pending transactions during this month every year trended upward until 2019. The percentage for San Juan Island decreased to 14% from 23% or 40% from April 2018. Which all makes since, less escrows equates to less dollar volume and transaction numbers.

 InventoryRecap (39k image)

As you may be aware, the escrow term is typically 45 days so our dollar volume for the first quarter is originated with contracts starting in November and December of the previous year. I do recall having some spare time last November. As I mentioned above, the first quarter is always volatile and doesn’t equate to a trend.

DollarVolumePercentChange (18k image)

As reported in the year-ending 2018 newsletter, the volume was flat during 2018 with San Juan County at a 1.5% gain and a slight decrease of 14.5% for San Juan Island.

A quarter is too short to analyze and predict any trends so time to move on and discuss other topics. I would love to discuss how much the real estate industry is changing. I have been on the island practicing my trade for 24 years and can laugh about how we went to Radio Shack to have our prints developed so we could paste them on a brochure and make photocopies at Printonyx.

With the technology advancements our trade has become very complex and competitive. With the advent of the Zillow, Trulia, and other similar platforms, our business change daily. Basically, a platform such as Zillow, uses our listing data and sells it back to us in exchange for leads. It is a brilliant business model and is leading our industry with innovation. I, as many of the agents on the island, pay Zillow and other platforms monthly for leads. There is no way to beat them so one must join them.

The downside of this program is the duplication that is caused. In the old days when a buyer would call or walk into our office, we would ask, are you already working with another agent? If they were, then the agent would respect the other agent’s relationship.

With Zillow, numerous agents end up working with the same client. It works well for the client as they get their questions answered in a timely manner. It is very confusing for the agents and we end up overlapping our business with other agents.

Now the clients are sent to you 24-7 via a text. Then you respond via an app on your phone, if you don’t respond due to other appointments or off hours, you are downgraded on the list based on your percentage of response. Actually being disciplined for being non-responsive, what a concept!!!!

All this accountability is a good thing for our industry. If agents want to work part time and only work with a few clients a year, they can still do that. They don’t have to join the various platforms. If they decide to step up and join the platforms they are held accountable for their customer service at a level far beyond what was expected in the past for the industry.

For the experienced agents, most of our business is derived from repeat clients and client referrals and in my case, my next highest sources are the articles I write, the newsletters and even my lifestyle videos. Having said that, I am the highest paying Zillow agent for 98250 because I cover all my basis.

My business model has changed accordingly, in order to compete and stay near the top of the production list on the island, I have had to do a lot more than just list and sell properties. Community service and involvement is mandatory.

Understanding and practicing the Code of Ethics, rules and laws from the department of licensing and internal broker procedures and policies have become a large part of our practice. More importantly, is understanding our local County land use regulations. We are professionals and must be able to provide information and direction to our clients to aid in their buying decision.

Regardless of where the client lead is originated from, they all require a high level of customer service and a knowledgeable agent with experience in the industry. Even though we have all the new “bells and whistles”, real estate is still a people industry and it comes down to relationships. Real estate is local and boots on the ground are critical.

As always if you need additional information, please be sure to contact me. To read all my past market updates and industry related articles or view my San Juan Island Lifestyle videos, please visit my blog at:

Wells on the Shoreline in San Juan County


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands

Even though I have been in this business for 24 years, on almost every transaction I learn something new. During 2018, I learned how difficult it is to develop a residential home on waterfront lot that is reliant upon a private water system. As in the case of most waterfront lots with a private system, the well was located within 1000 feet of the shoreline and therefore triggered more regulations. This 2-party well system was shared with an existing interior water view home and the proposed home planned for the waterfront lot.

The County’s regulations include a review of the distance to the shoreline, lot size, static water level in the well and chloride concentrations. Based on all criteria, the County will determine if a hydrogeological site evaluation will be required. (A draw-down on the well)

The escrow on this transaction was over 12 months and the buyer spent tens of thousands of dollars during their feasibility study prior to closing to investigate the suitability of the lot.

I recognize that the costs on a waterfront lot and future development isn’t considered a large concern for most but why does it cost so much and take so long to purchase and develop single family homes in the islands? This buyer intends to build a modest home on this lovely lot.

As in the case of many of our sellers, this client was unable to fund the investigation on the water source upfront before a buyer was bound by the contract. Primarily due to the fact that water testing is time sensitive and we were afraid if we spent the money to test the well, the reports would be expired prior to us attracting a buyer for the property.

The lot was on the market for 699 days. It was being marketed during the period where the desirability of waterfront lots was greatly diminished due to the recession and the uncertainty that surrounded the shoreline setbacks as the Shoreline Management Program and Critical Areas Ordinance were both pending an update. During the marketing, the seller lowered the price several times.

Many buyers inquired about the lot but due to the complexity of the County regulations for shoreline development, they passed on the opportunity to purchase a lot. Finally we attracted a buyer.

This buyer was both well qualified and he was an architect that was knowledgeable of the construction industry and County regulations. He turned out to be the best buyer in the world as he was accepting of the length of the escrow that would be required and the upfront expenses, not your typical buyer.

He ordered out the Residential Pre Application (RPA) which located all utilities, the building site, proposed set back and screening on the lot. The RPA plus the survey work required was around $3000.

Of course he incurred the basic expenses such as an archaeology study, a Geo Hazard study, an arborist for tree removal and engineering for the storm water management which totaled about $10,000. He was able to process his architectural plans without expense.

In order for the buyer of this waterfront lot to close, he needed to have a comfort level of what he could build and the cost involved to develop the property. Prior to application for a building permit, a Certificate of Water Availability needed to be processed. (Water Cert)

The Water Cert required that the septic system be determined; the buyer processed a perc, design and permit for $2500 and that had a validity date of four years.

In this case it was obvious, however; on other lots, a survey may have been required to confirm that the well head is located within 1000 feet of the shoreline.

San Juan County regulations require that all private wells within 1000 feet of the shoreline have a draw-down test and are tested for salt water intrusion between the months of July through October prior to approval of the Water Cert. Further, the County and hydraulic engineers require at least one neighbor, if not two, have their static levels monitored during the draw-down of the subject property. Explaining this process to an uninvolved neighbor was a character building experience.

The buyer was required to hire a private hydrologist to work with the County approved hydrologist. The private hydrologist for the buyer was around $10,000. Al Mauldin charged $1750 for his share of the work. The private hydrologist prepared a report for the County hydrologist to review and provide recommendations for approval.

As part of the Water Cert requirements, the shared well maintenance and use agreements had to be fully signed and recorded. This document was drawn by the seller’s attorney, and then reviewed by the buyer, seller and agents and the buyer’s attorney. The document was also reviewed by the County and hydrologist as they required certain language for the annual testing of the shoreline well and other restrictions. The cost for the well agreement was around $2000.

We tried to obtain a waiver of the draw-down requirement as we had three historic San Juan Short list reports on the well that showed that the chloride levels were actually decreasing on the well. We also had a 15 year old draw-down test on the well from when the owner originally built their house but it was not convincing. We were unable to obtain a waiver of the draw-down test.

The draw-down testing was a nerve-racking process for the seller and all parties involved as even though we were told that a draw-down test won’t create salt water intrusion on wells that are not inclined for intrusion, the testing still posed risks.

During the draw-down test, Al Mauldin processed litmus tests for chlorides every 30 minutes. If the chloride level had increased during the testing, he would’ve shut down the process. The well produced 6.71 GPM but the drawdown test was processed at 1.5 GPM in order to avoid stressing the well. The test was for a four hour period and the results produced didn’t require longer testing.

During the testing, neither the owner of the well nor the neighbors could use their well water for 48 hours. Each had to have storage or arrange hauled water for this period of time. The test required a large group of participants; present included the County person, County hydrologist, the private hydrologist, the owner, prospective buyer and the neighbors.

Once the testing was processed, Al Mauldin completed his report which was submitted to the private hydrologist. Once the private hydrologist was finished the information was submitted to our County officials. The turnaround time was greater than 30 days as the locals had to involve the County hydrologist to review the private hydrologists report.

The County’s approval included a restrictor on the well. As I mentioned, this was a 6.71 GPM well and was to be shared by two properties. The county restricted down below the minimum GPM requirements to get a single-family residence permit or less than 1/2 GPM. This restriction dictated that the shared well would need a holding tank, more plumbing and electrical and a nice looking well house which I estimate will total about $25,000 more than budgeted to hook up to this well

I assume if the chlorides had been above the County recommended levels, the well would’ve been decommissioned. Alternative water sources for the existing home and the proposed waterfront lot would have been slim to none:

Water catchment - expensive, requires a “tank farm” and it is unacceptable to lenders due to secondary market requirements.

Water hauling - Unacceptable to lenders due to secondary marketing requirements.

Desalinization System - Applicable to private wells but can cost in the range of $80,000-$100,000. Typically used for community water systems.

The loss in value due to the loss of a water source to an existing single-family residence is tremendous. The conversion from a single family lot to a recreational lot is a decrease in value of at least 50%, if not more.

In some cases drilling a new well at least 1000 feet back on the subject property or a neighboring property may have been an option. It would all depend on whether the lot was large enough and the neighbors were cooperative. Sharing other wells in the area might also be an option for some lots.


The buyer decided that they were comfortable enough to close on the property as they had the Water Cert in hand and the remaining process to obtain a single-family residential permit was standard procedures. As I mentioned the escrow was 12 months, partly due to needing to wait until the most vulnerable time of the year to do the draw-down process which was July through October.

It was a learning experience for all agents involved; Al and Frizie Mauldin were great to work with, the costs including the hydrologists were expensive, the buyer and seller were extremely stressed, and the champagne that we shared after closing tasted better than most.

I recognize that these regulations are for consumer protection but this was an existing well, serving an existing home, plus they had existing well test results. One would think a waiver of the draw-down would have been granted.

If you own a waterfront lot that is not developed but has at least a well, I can’t recommend that you do the draw-down upfront as it may expire before you attract a buyer. However, just be prepared for a long expensive escrow. If your project is a tear-down a certificate of water availability would be required. If your project is a remodel, as long as there was already water and plumbing to the existing structure the regulations may not be triggered. Be sure to check with the County for full details.

If I represent a buyer on a waterfront lot, I wouldn’t allow a closing until they had processed all of the information that I just detailed above.



IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands

Thinking about selling your property? You may want to consider researching, collecting and completing the items detailed below.

This is not a check list for planting flowers on your porch and painting your front door, you can go to the internet for that information. This list is to prepare sellers in San Juan County for marketing their property. The issues below are for regulatory compliance and contract performance. Attention to these issues will prove beneficial and would be worth the effort during the marketing and transaction management of your property sale.

As your agent, I will assist with the process of gathering and helping you arrange for the various services. That is what good agents do.

This list will not apply to all properties and it is not meant to be all encompassing. The topics are in alphabetical order for your convenience.


"As Is" Sale
Washington is a due diligence state with the buyer able to process the suitability of the property with no risk to their deposit if their contract has contingencies. Some property owners believe by writing in “as is” on the contract that they are excused from making repairs and/or disclosing information about the property and buyer recourse. The statement indicates to the buyer that the seller has no intention of making repairs but the buyer may still obtain a home or other inspection reports as they deem necessary. Disclosure and recourse are requirements and rights granted by law.

It is difficult in a recovering market to provide an opinion of value and an upfront appraisal may be an option, although I don’t recommend one. The report cost range will be $500-$800. Unfortunately the report can't be used by the buyer if a lender is involved. The lenders have their approved appraisers list and must be the party that orders the report. Further, due to licensing regulations, appraisers are only able to utilize closed sales as comparable. The agents are able to use pending sales and current inventory to process their opinion which takes market trends into consideration

Buyer Feasibility
It is not uncommon for the buyers to contract for a feasibility contingency that runs concurrent with the home inspection contingency. The home inspection contingency addresses the condition of the existing structures on the property and the feasibility study addresses the “what ifs”. It may be used by the buyer to confirm the cost of a remodel, to research what the home may rent for or the likelihood of obtaining a Vacation Rental By Owner (VRBO) permit and other similar items.

Some buyers are also processing soil stability and environmental studies which include mold and air quality within the buildings, at their expense. Bottom line, the feasibility contingency insures that the property is suitable and inspection results are acceptable to buyer, at their sole discretion. As a seller, you want the buyer to have the opportunity to process their due diligence and not rely on statements made by you or the agents.

Carbon Monoxide Monitors
Per national regulations all homes must have CO monitors and this language is contained in all purchase and sale agreements. The monitors can be purchased locally at ACE Hardware or Browne’s Home Center. The cost range is $25-$75 and the plug-in variety will suffice. The regulation directs you to comply with the instructions on each monitor as to installation. Basically, one CO monitor outside or near each bedroom and on each floor.

Competitive Market Analysis
To aid in your pricing decision, your agent will prepare a competitive market analysis. This document will compare your property to similar sold, pending and active properties. Ultimately, the pricing decision is yours; you may want to consider how long you want your property on the market when determining the price. Part of this decision is to price against “sold” comparable properties or to price against the “current inventory”. Lately, I have been pricing my new listings against current inventory and recommend that unless the market trends change.

If you are a highly involved seller and want to proof your ad copy, assist in the photograph arrangements and/or just control the process, then it is imperative that you let your agent know this up front. Each seller is different and communicating your preferences will suit you best.

Corner Stakes
It is very important to locate the corner stakes on the property and mark them with flag tape. The old stakes on the island can be in the shape of a coin or pipe or wood. If you are unable to find the clear evidence of property corners and property lines, a surveyor should be hired. Locating and marking the corners may discover any encroachments that may exist. A full survey will be in the range of $2000-$3500 for 4 corners and level terrain. Each missing corner is approximately $500. Buyers want to know what they are purchasing.

Make sure that if your property is granted or burdened by any type of easement, e.g., view; landscaping; access; or utility; that a proper, recorded easement exists. Verbal agreements are not valid in real estate.

If your neighbor’s fence or outbuilding is over the line on your property, this needs to be resolved. The remedies that the buyer, lender and title firm will be accepting of include a license, a recorded easement, boundary line modification or removal of the encroaching item or use. If you intend to remedy via a license or easement, you should hire an attorney and insure that language is included that requires the encroaching party to waive their rights to future adverse possession of the affected property. A license or easement will be in the range of $800-$1,000 subject to the complexity and whether all parties are in full agreement. If a boundary line modification is the solution, then a surveyor must be hired and that will be in range $1800-$2500.

First Right of Refusal
If your property is burdened with a first right of refusal, you must disclose this to your agent and potential buyers. Ideally the first right is recorded on your property and of public record but some are “hand shake” deals between neighbors, ex-wives/husbands, and relatives and they can get inadvertently overlooked which can be a fiasco down the road. Make sure you understand how the first right is “ripened” and the likelihood of it being acted upon by the grantee. An attorney should be engaged if the agreement is unclear.

Final Building Permit
Per the boilerplate language contained in our purchase and sale agreements, seller is required to provide buyer with a copy of their building permit with final occupancy signed off within 10 days of mutual acceptance. A copy of the permit can be obtained by emailing If the permit final was not issued, an inspection from the San Juan County Building Department must be obtained and all work or repairs completed in order to secure the final. If the home was built prior to the existence of the Building Department, the home is grandfathered-in. If the home was illegally built without permits then a recreated set of plans and permit application must be submitted to the County. I would start by hiring a consultant for this type of project.

Forms Required to List
Be sure to request your agent to provide you with copy of the Exclusive Listing Agreement, Seller's Disclosure and all addenda so that you may review in advance at your leisure

Guest Houses/ADUs
Just because your outbuilding “walks and quacks” like a guest house, it may not be a legal guest house. Be sure to check how it was originally permitted prior to the marketing of your property. You can obtain copies of the building permits by emailing Some structures on this island had a range/oven installed after the final studio or bunk house occupancy permits were issued. If your outbuilding was not permitted as a guest house, you must not market it as such.

Home Inspection
It is common in many markets for the property owner to obtain a home inspection prior to the marketing of their property so that they may correct any deficiencies that are reported. The report cost range is $550-$750. Unfortunately, the buyer may not use the same report unless it was ordered in their name; otherwise there is no recourse against the inspector so another report will be required.

Home Owner's Association
Be sure to gather information regarding your HOA including the dues amount, regularity, and what is included in the dues such as water, sewer, and/or road maintenance. Have the contact information available as escrow will need this to confirm the prorations at closing. Be sure to disclose special assessments and/or High Speed Fiber loans.

You need to know your total secured indebtedness. This includes your first mortgage and any other secured instruments. Agents will compile a list of your standard closing costs and those should be added to your total indebtedness. If the net proceeds are not adequate to pay off the indebtedness, you must bring in cash to close, or research if you are qualified to process a “short sale” with the lender.

Internet Speed
Most buyers want to know what internet speed is available at your property to make sure that it is suitable. You can download a free App called SpeedTest by Ookla and run a test on your property. If you already have fiber installed, be sure to let your agent know as they will want to include that in their ad copy to market your home.

List of Excluded items
Be sure to communicate with your agent the items that are not included in the sale e.g., your favorite mirror that is attached, your mom's light fixture, etc. Make sure those exclusions end up in the actual purchase and sale agreement. Just because the information is contained on the listing in the North West Multiple Listing Service (NWMLS), that is not part of the binding contract.

Net Proceed Calculation
As part of the agent’s service to you, they will provide you with a Seller’s Net Proceed Calculation. This information will detail the costs you will incur selling your property. It will include the agent’s commission, excise tax, title and escrow fees, remote notary and recording fees. You should also consider the prorated HOA dues, special assessments and real estate taxes. Costs to upgrade and pump your septic may be applicable as well.

Owner Builder Permit Program
San Juan County is one of the few counties that allow for owner builder permits, which is not the same as owner contractor. If your home was built under the program after 1988, you are required to have the County perform a Life Safety inspection within 30 days of selling or renting the property. The cost of the inspection is only $111 and all repairs must be completed in order to obtain an acceptable final inspection.

It is prudent to repair any dangerous items before you begin marketing your home. Potential buyers with their family and agents will be walking around your property and to avoid an accident, you should repair those loose handrails and the wet rot in your deck boards. Posting signs on any unsafe areas on your property is helpful but making the repairs prior to marketing is the best avenue.

For big ticket items such as decks, roof or siding, it may be beneficial to obtain bids for the repair. These bids also aid in the pricing of the home and your decision to either make the repair prior to marketing or hope for a cash buyer willing to assume the condition of the home. Lenders require at least a 5 year roof life expectancy and will not lend with less. Obtaining that roof certification or bids for repair will save time and delays versus waiting until you are under contract with a buyer.

Road Maintenance Agreement
Be sure to have proper, recorded road maintenance and use agreement for your access. If one is not in existence, contract with an attorney to arrange for one. The cost range will be $600-$1500 subject to the number of users and cooperation. Not all of the property owners are required to sign, just the majority. Lenders require this document. To confirm if one exists check with Chicago Title 378-2126.

Selecting an Agent
You need to decide on an agent to represent you during the marketing and transaction management phases of the sale. Bottom line, all agents and brokerage firms on the island have the same bells and whistles; it is a matter of whether the agent you are considering uses ALL of them. It shouldn’t be a decision based on pricing of the property; it should be based on compatibility. You will be working with this agent for a period of time and in some cases months, it is important that you feel you will be well represented and that the agent will provide the level of customer service that you require to be comfortable. Check out their other listings, past sales and references/reviews on Zillow.

Seller's Property Disclosure Form 17
This form will be provided to you by your agent and is a uniform instrument created by NWMLS in compliance with the State of Washington regulations. You must complete the form to the best of your knowledge but the advice is to always disclose issues even if you footnote that they have been repaired. This is a disclosure that the buyer is presented with as well as the home inspector. It is not a representation or warranty and is not incorporated into the contract however, if an issue arises after closing and the result is litigation, the form 17 will be popular. If in doubt, disclose!! Don't forget those un-permitted outbuildings, critical areas or your Pinocchio dock. The form 17 is mandatory.

Service Provider list
It is very helpful to compile a list of your current service providers to share with your future buyer. On this island each property has unique systems that must be maintained, it is amazing how long your list will be. Often buyers will contract for a system orientation from the seller as part of the purchase and sale agreement.

Your septic system must be inspected by one of the county approved inspectors. They will determine if the system needs to be pumped and whether any maintenance components will be required. The County code requires observation ports, risers and other maintenance components be installed prior to any sale. Be sure to specify when you order the inspection that it is “for the purpose of a sale” inspection versus a standard. Cost is around $200 for the inspection and $800-$1,000 for a pump out. Maintenance components will vary.

You need to have a copy of your septic “as built” to evidence that the system installation was permitted with a final inspection. You can obtain this on-line at with your tax parcel number. You need to make sure that the system size is equal to the number of bedrooms you have in the house and other structures. A bedroom is defined as a room with a closet, legal sized windows and a closing door. If your septic system is only a two bedroom system and your home has three bedrooms, you need to market the home as a two bedroom. It is not uncommon in the marketing ad copy to read that the home is a two bedroom plus a den with closet.

If you determine that a permit was not obtained during the installation of your septic system, you can hire one of the licensed designers to remedy the issue. They will inspect the system, size it, locate the drain field and other components and draw up a recreation “as built” and submit that to the county. I have had those done for as low as $300 and as high as $1500, subject to the service provider finding the system components. Many items on the island are grandfathered in but health and safety issues are not; seepage pits are illegal.

Showing Instructions
Be sure to communicate the showing instructions for the home for you and your tenants; no one likes surprises. Making your decision about whether to have a lockbox and sign in advance is also helpful.

Utility Expense
Most buyers want to know what reoccurring expenses involved in ownership of your property. Having those details available will be most helpful. OPALCO will provide you with an average monthly and annual amount.

All owners of the property must sign the legal documents required to list. If you use a power of attorney or the property is held in a Trust or LLC, those documents need to be submitted to your agent and the title firm.

Water Source Testing
Your well needs to be tested for quality which includes a bacteria test and a San Juan Short which includes testing for arsenic, barium, chlorides, sodium, electric conductivity, nitrate-N, and fluoride. The cost will be approximately $300, more for a rush.

Evidencing well quantity is also necessary. If you don't have your original well log you can obtain one from the State DOE website The well log report indicates the depth and quantity via an air test at the time of drilling. You want to avoid the buyer being forced to complete a draw down test on your well as it can be hard on your well and to other wells nearby. If your well is at risk for salt water intrusion, the draw down will add pressure to that existing situation.

If you had to purchase water at any time during the year, be sure to complete Paragraph 2 section A-4 on the seller's property disclosure accordingly. Don't be on the wrong side of a water quantity issue.

Wells - Shared
You want to be sure that you have a proper, recorded well agreement for all parties using the well which includes a maintenance provision. Wells with three or more properties being served require additional language, restrictions and County approval. If no agreement exists, I would contact an attorney. The costs will be in the range of $600-$1000 subject to the number of participants.

You need to determine if you have wetlands on the property so that you can disclose to the buyer their existence. You can determine this by using the County site Search by tax parcel number then add map contents and mark critical areas including wetlands. If the program maps possible wetlands on your property, they will have an impact on any future owner that intends to remodel or construct an outbuilding as setbacks may be imposed. If the wetland is a high value type, a delineation and survey may be required prior to any construction on the site to determine the setbacks. Cost to delineate is in the range of $3,000-$6,000.


Archeological Sensitive Areas
If you are on the waterfront it is quite possible that your property contains archeologically sensitive materials such as Indian Midden. You need to disclose this to any prospective buyer as they may plan to disturb the soil in the future through a remodel or landscaping, the presence of Midden will have a huge impact on their costs. If archeological sensitive materials are found on the property, no soil disturbance can occur without the presence of an archeologist standing by. They will monitor and audit all materials. If something is found that they determine is valuable, the job will be suspended until further research can be conducted and contact made with the State and Tribes. Not only waterfront property may be impacted by this regulation; properties across the street may be in the 500 foot buffer area of an actual site of sensitive material. Properties located near cemeteries are subject to this regulation as well.

To find out if you have archeological sensitive areas on your property, you need to complete the Critical Areas and Archeological Review form and submit it to: The County’s response will confirm if the site is located within critical areas or within the buffer areas. Should your property be in an area or buffer and the buyer intends to disturb the soil, the buyer will need an archeological study processed on the property prior to closing. The cost of the report is in the range of $2,000-$6,000 subject to size of parcel, terrain and whether sensitive materials are found.

Flood Insurance
If you live on the waterfront your home may be located in a designated flood zone. You may have existing flood insurance if you are in a flood plain and used an institutional lender. In order for a future buyer to obtain flood insurance, you will need a flood elevation certification even if you were insured in the past without one. This document is required by all flood insurance firms as it confirms if the improvements on the property are above the flood plain and determines the type and amount of coverage that the lender will require. If the buyer is not using an institutional lender, they may elect to waive flood insurance. The cost of the flood elevation certificate from a surveyor is in the range of $2,200-2,500. The time frame to process a flood elevation certificate is around 2 weeks.

Flood Insurance Waivers
If you are in a flood plain and flood insurance is required, you may also obtain a Letter of Map Amendment (LOMA) which allows you to remove a portion of your property out of the flood plain and cancel your flood insurance if it proves to the lender that the improvements are above the flood plain and at less risk. Surveyors estimate that about 90% of San Juan County waterfront properties are eligible for a LOMA. Flood insurance is very expensive as the government no longer subsidizes the FEMA program due to major losses throughout the country. To obtain a LOMA a surveyor must be hired and the cost is around $2,200-$2,500 which includes the flood elevation certificate. The time frame to process a LOMA is at least 2-3 weeks.

You should obtain evidence of your dock permit from the SJC building department. If your dock was constructed prior to the department's existence you are grandfathered-in. If you own a shared dock, be sure that you have a proper, recorded dock use and maintenance agreement. If you need one, an attorney can draw one in the range of $600-$1,000

Dock Disclosure
Be sure to disclose if your dock was permitted and if the extension was a Pinocchio or legal. At some time in the future, the county may decide to enforce compliance with the dock permits and you want to be on the right side of that issue as it relates to the disclosure.


If the most logical building site is a long distance from a transformer, it would be beneficial to contact OPALCO and determine the distance and what they will require to hook up the proposed property. Once their specifications are determined, a bid can be obtained from an excavating contractor. The amount of this improvement is important as it aids in determining your sales price plus the transaction is not delayed waiting for the buyer to process the information while under contract.

Residential Pre Application
If your property is on the waterfront or contains wetlands, the only way for a buyer to confirm where they can build, the location of the “no touch zones”, what trees can be removed and the allowed location of their utilities and outbuildings is to obtain a RPA. Most buyers will want this processed prior to a closing and will request a longer than normal escrow period. The cost range for the buyer is $800-$1500 and various consultants on the island process these. These are not binding so regulation changes void the approval. The only way to bind the County’s approval for proposed construction is to have a fully completed application for a permit on file; the safest way is to have the building permit in hand.

Now that the update to the Shoreline Management Program (SMP) is in effect and future changes are not expected for 5-7 years, it may be beneficial for sellers to obtain a RPA for the purpose of marketing their property.

Septic Perc, Design and Permit
If the parcel offers a defined building site, then it may be beneficial for you to obtain a septic perc, design and permit in advance to aid in the marketing. The cost is $1,750-$2,200 and the permit is valid for 4 years. If you don’t obtain one upfront, then the buyer will have to process one as part of their contingencies.

Access to the Building Site
If you want your parcel to sell in a timely manner, installing a trail or driveway for the agents and buyers to access the building site is very important.

Water source
If your property is located within a plat with a community water system it would be good to confirm the amount of the water hook fee and monthly base fees.

If your property is on a shared well, be sure that a proper, recorded well use and maintenance agreement exists.

The days are long gone where a buyer will purchase an unimproved parcel without the well being installed and seller being able to evidence quality and quantity. All lenders require a water source be determined and buyers are just not willing to take the risks.

If this list of potential issues is overwhelming, take a deep breath and contact a good agent such as myself. I use my experience to assist property owners regularly with all of these issues and help you process everything as painlessly as possible.

If you read this entire article, thank you. I apologize for the length but there are no shortcuts in real estate.



IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands

In reviewing the year-end results for 2018, the sales dollar volume for the real estate market in San Juan County per the Northwest Multiple Listing Service was $305,674,278 which reflects a tiny increase in volume of 1.5% over 2017 when the volume was $300,622,909. The percentage of growth this year was pretty flat which was evidenced in all preceding quarter end numbers. The County closed an average of 45 transactions per month which is 9% below last year.

12-30-19_volume_comparison (27k image)

12-30-18_san_juan_island_inventory (18k image)

Total volume on San Juan Island in 2018 was $126,419,356 as compared to $147,981,053 in 2017. The decrease was 14.5%. Of all the islands, Orcas performed the best with a volume increase of 13% but with a transaction decrease of 7%. The top 3 production agents in 2018 in the County, all work on Orcas and rocked their year.

Inventory levels on San Juan Island are very similar to last year at this time. The notable difference is in the amount of escrow transactions which reflects a 48% decrease.

Inventory did have an impact on our sales volume this year in some categories. The inventory for affordably priced homes is very low. Currently, a buyer needs to spend at least $375,000 to purchase a single family dwelling that isn’t a remodel. There are some condominium listings slightly under $300,000.

The lowest water view home is priced at $559,000 with the lowest waterfront cabin at $460,000, but it has tidal conditions. The non- tidal waterfront homes start around $700,000 and the majority of those that are under $1m, typically need updating.

The lowest priced lot is around $80,000 but it would be considered a challenging build. Lots that offer a water view start around $150,000 and the waterfront lots start at $250,000. A level sunny medium bank waterfront lot would be around $350,000.

I understand that numerous builders in the private sector are positioning to construct affordable housing and rental units in 2019. I know of 27 homes that will be starting around $250,000 each with the pre-sales starting by spring. These homes are located within town limits and are 2 bedroom, 2 bath and offer 965 square feet. This group of homes alone should create opportunities for first time home buyers and seniors for affordable housing.

12-31-18_closing_recap_by_price (18k image)

There are many positive statistics regarding the market trends in our County and I have provided the details below.

Highlights of our market:

  • The median home price for a 12 month period ending December 2018 for the County and San Juan Island reflect increases of 6% and 1%, respectively. The median is a typical market price where half of the homes sold for more and half sold for less.

    Increases in median prices indicate our market is headed in the right direction but it is not a measurement of price appreciation. The actual computation of appreciation or depreciation would include analyzing a number of properties that were sold in 2017 and again in 2018. Due to how small of a market we are, it is difficult to have a reliable number of similar properties that transact in a two year period. Bottom line, we are too small of a market to quote an appreciation figure.

  • The Average days on market number (DOM) for homes in the County and on San Juan Island was 185 and 143, respectively. In all categories of our properties and prices, the days on market has decreased since 2016. The DOM varies on the price range.

  • Waterfront home sales represented 34.4% of our total dollar volume for the County and 27.5%% for San Juan Island. These percentages are typical for a healthy market in the Islands and very similar to last year although San Juan Island’s percentage was a decrease from last year. The average waterfront home price for the County and San Juan Island was $1,253,006 and $1,241,675, respectively.

  • During the year, sellers negotiated on average 5.0% off the list price at the time of sale for homes in the County and 3.7% for San Juan Island. This is down slightly from year-end 2017. This percentage varies based on the price range.

  • Sellers negotiated on average 6.6% off the list price at the time of sale for land in the County and 5.8% on San Juan Island. This percentage of negotiation has reduced by almost 50% from year-end 2017. Again, this percentage varies based on the price range.

  • The number of sales in excess of $1,000,000 for the County and on San Juan Island was 62 and 26, respectively. The numbers reflect an increase in the number of transactions for the County but a decrease for San Juan Island.

  • Inventory is similar to last year same time for San Juan in most all categories of listings. One should note that I am using year-end figures and many agents set their listing expiration date for 12-31 so the decrease in inventory is also impacted by the expired listings. Year-after-year it is the same situation, therefore still apples to apples.

  • Absorption has been strong in almost every category. Based on the current inventory levels and number of closed sales in 2018 for San Juan Island, we have 4.7 months of supply for homes under $1M and a 8 month supply for homes listed above $1M. The supply for homes listed under $400,000 is less than 2 months as we only have 7 listings in that pricing category. Six months is considered a balanced market. The calculation for months of inventory is just a point in time and any changes in inventory render the calculation incorrect.

Showcase of Listings: The Coldwell Banker San Juan Islands Showcase of Listings deadline this year is March 31, 2019. If you are considering selling your property this year, this is an excellent publication to be included in. The showcase is a handout at our Friday Harbor and Roche Harbor offices as well as on the ferry system.

John Evans
Greg Hertel
Mary Kalbert
Ron Keeshan
Gordy Petersen
Janice Peterson
Bruce Sallan
Teresa Smith
Terra Tamai
Amy Wynn
Helpful Links
Helpful Links
RSS Feed

Let the newspaper come to you with Real Simple Syndication

RSS Version

Web design by
The Computer Place

© 2008 The Island Guardian, Inc
All Rights Reserved.

Powered By Greymatter

To learn about this newspaper
how to place a free ad
to become contributor
click below:
The Island Guardian

or email: