Gary Franklin, Owner/Manager of Windermere Real Estate, San Juan Island sent in this report: Here is what our Brokers see trending in the San Juan Island Real Estate Market.
While the economy and the housing market are both improving, there are some local concerns to which we should pay attention.
The health of any real estate market depends on the greater economy. When the country, region and state grow economically, jobs are created, wealth increases and more people buy homes. We see this happening right now in many parts of the US.
In our county however, economic growth isn't as apparent. Yes, there were several new businesses that opened in the islands in 2013, but there are several more that will close by 2014.
The excitement of living here and running a business is tempered with the reality of operating within the seasons. Even though our local lodging taxes were up this year over last (more tourists visited; up 16% on San Juan Island), the sales taxes dropped 2% year-to-date.
We're getting more visitors, but they're buying less. Fewer businesses prosper; which trickles down to fewer employees needed and fewer paychecks supporting the local economy.
The recent Economic Development Summit brought together a group of concerned islanders who brainstormed possibilities for our future. Since 89% of our county businesses have less than five employees, one result of the Summit is to lobby support for these local entrepreneurs and to develop strategies to attract more. This bottom-up building of our economy should then result in more housing transactions. Well, that’s what happened in other places anyway.
Our local real estate market has historically followed the energy of King County’s by 6-8 months. This time we're projecting it to take longer- maybe 12-18 months. Last June, there were many cases of homes coming to market with multiple offers in Seattle. The available inventory fell drastically and prices increased by double digits.
We are already seeing a trend of increasing median sale prices of homes on San Juan island as the chart below shows.
Also, the price per square foot of homes sold here is increasing.
So, while some data may seem positive, there are also some economic concerns we’ll be watching.
In several weeks we will have the year’s results and will digest them for you in the next report.