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Real estate rebounding in 2010
“We’ve seen a 51-percent increase in activity in the first quarter of this year, compared to the first quarter of last year,” said Colleen McAleer, a member of Team McAleer at Re/Max Fifth Avenue in Sequim.
McAleer compiles statistics monthly from the Olympic MLS and Clallam County tax records. She also does an analysis of the statistics on a monthly, quarterly and yearly basis.
The records show that median price of a home is currently $230,000 — the same as it was for 2009 — but the number of sales has increased and the average time on the market has decreased.
Sales pick up
“We’ve got a lot on the market, but activity is picking up,” McAleer said.
“Prices are general down to about what they were in 2004 in median home sales.”
Homes that sold this year spent an average of 140 days on the market.
“It’s all about pricing, staging and marketing,” McAleer said.
“You’ve got to have your home compellingly priced and make sure it stands out from other homes on the market.”
In 2009, the median sales price dropped by just more than 9 percent from 2008 in the Sequim area, defined by the Sequim School District boundaries from Gardiner to Blue Mountain Road.
From 2008-2009, the number of homes on the market dropped by more than 10 percent, McAleer said.
Currently 469 homes are on the market in the Sequim area listed through Realtors, McAleer said.
Of the 71 homes that have sold this year, 17 sold in January, 25 in February and 29 in March. Of the houses on the market now, 38 are under contract.
Slow bounce back
In the past 10 years, the lowest point for inventory was March 2004, when just 151 homes were on the market. That number increased in 2005 and again in 2006 when a lot of builders came to town and built homes quickly. In 2007 and 2008, the number of homes on the market was similar to the two prior years.
The most difficult time to sell a house in Sequim was in 2008 and the beginning of 2009, McAleer said. That was when agents saw the lowest amount of activity when looking at the number of houses on the market versus the number sold.
“The first quarter of 2009 was our worst quarter in the last 10 years for the number of homes sold,” McAleer said.
“That was the absolute low for activity because there was so much for sale and so few buyers.”
Low interest rates
Today, things are looking up, especially for buyers. Current interest rates are low, there are plenty of houses on the market and the federal government has extended incentives for home buyers.
“We’ve seen a slight improvement, but it’s still going to take some time,” said Al Kruebbe, president and broker at Peninsula Mortgage Company in Port Angeles and Sequim.
Kruebbe said interest rates are slightly on the rise but still about the same as they were last year at this time, at about 5 percent on a 30-year fixed mortgage.
“As the economy improves, you’re going to see a slight increase in interest rates, but only slight,” he said.
Kruebbe said the current tax incentives for first-time home buyers and repeat home buyers have helped sales in the area.
Still time for credit
First-time home buyers can earn a tax credit of up to $8,000 and repeat home buyers can qualify for up to a $6,500 tax credit if a contract on a home is signed by April 30. A first-time buyer is defined as one who has not owned a primary residence during the three years prior to the purchase.
Existing home owners qualify if they have lived in their home consecutively for five of the previous eight years. More information about the federal program can be found on the Internal Revenue Service Web site at www.IRS.gov.
Another federal program, which went into effect on April 5, is designed to help current homeowners who are unable to retain their home. The Home Affordable Foreclosure Alternatives Program, or HAFA, works in conjunction with the Home Affordable Modification Program, or HAMP, in connection with short sales and deeds-in-lieu of foreclosure.
Locally, nine of the 71 sales this year, or 13 percent, were foreclosures, and five of the 38 currently under contract are short sales.
The government program is complicated and not for everyone, said Levon Mathews, president and chief executive officer of First Federal. While the bank is participating in the government program, it is not encouraging participation.
“The bank is doing everything we can do to keep people in their homes,” Mathews said. He urged troubled borrowers to contact their financial institution to gather more information and learn about other options the bank has in place for helping borrowers.
Gil Jauregui, secondary marketing manager at First Federal, said the HAFA program is basically a modification to other short-sale and deeds-in-lieu of foreclosure programs that began with the Making Home Affordable Program.
Demand on rise
HAFA is basically for borrowers who don’t qualify for any other program and do not have any other alternative for staying in their home, Jauregui said.
“As financial counselors to our clients, our job is to explain these government programs and ensure that they have exhausted all other options,” he said.
“We want to do the best thing for our clients to keep them in their homes.”
Mathews said he has seen the first-quarter sales figures and often has discussions with real estate agents in Sequim and Port Angeles about the current market.'
“What I’m hearing is that we may be close to stabilization and demand seems to be picking up,” he said.
“The big question is, how long will we go before consumption picks up?”