San Juan Islands' Real Estate Down 21% since 2006

By Ray Martinez, Special to The Seattle Times

Dependent upon retirees and second-home buyers, the residential real-estate market in the San Juan Islands has taken a hit, driving down prices.

Medium price of a home in San Juan County:

2007     —     $520,000
2009     —     $443,500

[Sam Buck III  is the top-selling agent on San Juan Island and a “top 1 percent” sales associate for Coldwell Banker worldwide. But now, ]rrh. Rather than shepherding two or three clients a week in his Suburban, as he did at the peak of the islands’ market in 2006, he’s now driving around two or three a month.

Three years of declining activity has caused a logjam of unsold homes on the islands, which is driving down prices. Last year, agents belonging to the Northwest Multiple Listing Service reported selling 118 single-family houses, about half the volume sold in 2006. And in dollar terms, total sales have plummeted 64 percent over the same period, according to the Northwest Multiple Listing Service.

Meanwhile, the median price of a single-family house sold in San Juan County has dropped from a high of $563,250 in 2007 to $443,500 last year — a 21.3 percent drop.

Total dollar volume declined from $177.6 million in 2006 to $63.8 million in 2009. By comparison, the median price of a single-family home in King County has come down 16.5 percent since 2007 (when it was $455,000) to $380,000.

Buck alone is sitting on 65 property listings valued at more than $90 million.

“We’re not in a panic — not yet,” he says, uneasily. “People here are just hanging on by their finger tips. No (real-estate) office in the last year and a half has been making money.”

… Buck tries to counter the gloominess of the market by touting the increased selection of homes and dropping prices as a “great opportunity” to buy.

“We’re never going to see prices again like we have right now,” says Steve Buck, who took over his father’s real-estate company in 1981. “We’ve pinpointed that we hit bottom in March. The prices we’re at now are going to steadily increase, and we’ll likely never see inventory this high again.”

Glenn Crellin is not as optimistic. The director of the Washington Center for Real Estate Research at Washington State University says the San Juans are a long way from recovery.

The “biggest negative” is the level of inventory. There were enough home listings at the end of the fourth quarter to sustain demand in the market for 20.6 months, nearly three times the statewide average of 7.4 statewide.

“This is heavily out of balance and suggests that sellers will need to discount prices significantly to sell in a timely fashion,” Crellin says.

…

The recession has taken its toll, and islanders are hoping last summer was the worst of it. San Juan County saw retail sales drop 13 percent from summer 2008, while Friday Harbor retail plummeted 20 percent, according to Bill Watson, program coordinator of the San Juan County Economic Development Council.

In 2008, one of Orcas Island’s largest employers, the Rosario Resort & Spa, closed, eliminating nearly 100 jobs. And, in 2009, Friday Harbor saw a series of store closings.

“We had open commercial space on the main street of Friday Harbor this summer for the first time in a very long time,” Watson says. “We have also had a couple of new commercial-space buildings complete construction during this period and they continue to experience low occupancy.”

The construction and building industry also has not fared well. Residential building permits were down 40 percent in the first half of 2009 compared with the same period in 2008, according to the Washington Center for Real Estate Research.

(To read the full article, go to
seattletimes.nwsource.com/html/realestate/sanjuans )