Sequim statistics

Population in 2014: 6,737 (97% urban, 3% rural).

Population change since 2000: +55.4%

Median resident age: 58.6 years

Washington median age: 37.4 years

Estimated median household income in 2013: $41,432 ($27,880 in 2000)

Sequim: $41,432

State: $58,405

Estimated per capita income in 2013: $26,433 ($19,253 in 2000)

Estimated median house or condo value in 2013: $201,697

($108,600 in 2000)

Sequim: $201,697

State: $250,800

Mean prices in 2013: All housing units: $239,920; Detached houses: $268,314; Townhouses or other attached units: $233,711; In 2-unit structures: $190,471; In 3-to-4-unit structures: $140,337; In 5-or-more-unit structures: $115,321; mobile homes: $97,467; occupied boats, RVs, vans, etc.: $112,594

Source: city-data.com

The hustle and bustle of the day begins early for the home builders at the Cedar Ridge development at the east end of Sequim. With 13 houses and properties in various stages of construction, a couple dozen workers are as busy as bees building a hive, not for the queen, but for homeowners looking for new digs.

If it seems as though there is a bump in the number of homes being built in the Sequim area, there is. On the flip side, if it looks as though there are fewer homes for sale, that’s true, too. In real estate speak, it’s a seller’s market.

“Housing, and especially rentals, is down right now with sales volumes a little less than last year,” said Mark McHugh, owner/broker of Mark N. McHugh Real Estate in downtown Sequim.

“The inventory is about as low as I’ve seen it.”

According to McHugh, during the first 10 months of 2016, there were 484 closings in the Sequim area, with an average sale price of $317,453, and a median price of $285,000. In 2015, there were 466 home sales with an average cost of $290,230 and a median cost of $256,250. That’s an 8 percent increase of home sales this year, explained McHugh, but there aren’t as many to choose from for buyers.

(Note: The median of a set of numbers is that number where half the numbers are lower and half the numbers are higher. In the case of real estate, that means that the median is the price where half the homes sold that month were cheaper and half were more expensive.The average of a set of numbers is the total of those numbers divided by the number of items in that set. The median and the average might be close and might not.)

Compare the present-day numbers to those of 2008-2010, the peak of the Great Recession. In 2009, for instance, the number of home sales in Sequim was right around 100, according to city-data.com.

“2009 was the most brutal time (for real estate) I’ve yet seen,” McHugh said.

In 2011, the number climbed to around 150 homes sold. By 2012, when the area started coming out of the recession, home sales climbed to 300. The numbers have evened out a bit since then, a phenomena in the housing market called a correction, a sort of evening out or cooling off period for cost peaks and valleys.

McHugh said the housing market in Sequim took off in 2015, as most could see by the number of new homes being built in the area. Builders are happy, real estate agents are happy, those selling their home are happy.

Building boom

The east end of Clallam County, from O’Brien Road to the Jefferson County line, is experiencing the most growth when it comes to new home building. Within that area, there are 262 listings, with pending offers on 96 properties, including new homes and lots.

Most notable are four developments under construction, three tucked between West Sequim Bay Road and U.S. Highway 101 and one on the south side of Highway 101. That’s not to say there are no other options for new housing — or existing housing — in other areas of Sequim. But the Cedar Ridge, Olympic View, Fair Weather and Solana developments are where the most visible work is in progress.

Perhaps not surprising, the four developments have a common denominator: All went into bankruptcy during the Great Recession and all were purchased in the past two to three years by new developers and builders. Between Cedar Ridge and Solana alone, there are some 255 lots in various stages of development.

In 2013, Rick Anderson, owner of Anderson Homes in Port Angeles, and his wife Cindy, and Brown M. and Sara Maloney formed Cedar Ridge Properties, purchasing the property that is now Cedar Ridge.

“From a business perspective, this was a good opportunity,” Anderson said of buying the property that 12 years ago was a cow pasture. When the Andersons and Maloneys bought the property, it already was platted into lots and a few homes were built, but pretty much standing empty. A failed venture in 2008 by then developer Allen Grant and partner Larry Freedman translated into good news for Cedar Ridge Properties. The market was about to change, Anderson said, it was time to make the commitment.

“We are thrilled,” Anderson said in a telephone interview. “Back in 2009 and 2010, I was sitting in my office by myself.”

While activity is abuzz in Cedar Ridge, Anderson, who has been around the block when it comes to North Olympic Peninsula housing trends, having lived here for 37 years, said of the 159 lots only 35 or 40 have been sold. “We have a long way to go,” he chuckled. “I hope we aren”t in a bubble.”

Cedar Ridge is divided into two sections, the Village and the Estates. Homes in the Village are from $220,000 to $320,000, while the Estates will cost a buyer $465,000 and up. Lots run from $44,000 in the Village and $75,000 in the Estates.

“We want to be good stewards,” Anderson said. “Our philosophy is we serve the client as if their home is our home. We don’t want to apologize for anything when we hand them the keys.”

Solana, a planned community south of Highway 101 in Sequim, has much the same story. Bankruptcy, vacant homes, the property was purchased by Green Crow Corporation, which has holdings in the Northwest, New Zealand and the Northeast. Solana offers cluster housing and half-acre estate lots. Kurt Hansen, manager of properties of both Solana and Fair Weather, said Green Crow is committed to building two houses per year in either the Courtyard lots or the Estate lots. Presently there are four homes being built in the common area, which will be on the market for about $360,000.

“Two years ago we were able to purchase (Solana) from the bank at auction,” Hansen said. It is indeed, a splendid chunk of property, with million dollar views from nearly every home. And yes, Hansen admitted, the prices match the views,

Olympic View, located off of West Sequim Bay Road across from Cascade Bark, and Fair Weather, a couple of blocks away, are smaller developments than Cedar Ridge and Solana. Olympic View property was purchased by Phil Fernandes, again after it went into bankruptcy.

Fernandes is an unassuming man who, by his own admission, likes to stay out of the limelight, including newspaper articles. He is also a bit of an anomaly in that he was born in Port Angeles and has lived here his entire life.

He purchased the property a year and half ago and said his goal is to provide good, affordable homes for those who are downsizing. That translates to mid-$300,000 homes.

“These lots used to be $12,000,” Fernandes said, explaining the cost of the homes he builds. “But the building permits have gone up to $25,000 per lot and the owner has to absorb that.”

Fair Weather is a community of what Kurt Hansen calls townhomes or paired housing. Or, duplexes, if you will. Each duplex is nearly 1,500 square feet and sells for $258,500.

Trickle down effect

Perhaps nothing boosts the economy more than a construction surge. Not only do local businesses benefit, but it promotes the well-being of Sequim’s citizens and supports the City of Sequim in providing basic government services.

Consider an active building site. Everything from flooring, cabinets, lumber, concrete, lighting, appliances, window treatments, glass, landscaping, and the list goes on, are arriving off and on each and every day.

“We are extremely busy,” said Tony Steinman, general manager of Thomas Building Center in downtown Sequim and supplier of materials for several building sites. “Our business has doubled in the last four years.”

There are 32 full-time employees working at Thomas. “We are running at maximum capacity, especially the deliveries,” Steinman said. “It’s good for Thomas Building, it’s good for the community.”

That’s not to say Thomas couldn’t use a few more employees.

“There is a lack of labor to build,” Steinman said.

The reasons are twofold: a large number of applicants do not pass the drug test (while marijuana is legal in Washington, federal laws do not allow it and building contractors must abide by federal laws), and the younger generation is generally not interested in manufacturing or labor intensive jobs.

Anderson agrees labor is tight right now. Anderson Homes employs and uses between 50 and 60 subcontractors per job site. “Building homes,” he said, “has a multiplier effect.”

Both Anderson and Thomas purchase locally as much as possible.

Who’s buying?

A little more than a year ago Tom Stark and his wife Cheryl Nye moved into their brand new home in the Cedar Ridge development.

“We love it,” the couple said at the same time. “The house and Sequim.”

Like many who end up in Sequim, Tom and Cheryl relocated from another part of the country. And like many who end up in Sequim, part of the reason for moving was the weather. In Tom and Cheryl’s case, it was hurricanes. They lived in the Outer Banks of North Carolina.

“After we retired, we took a year driving up and down the East Coast looking for a house,” Cheryl said.

Not finding just the right house or community, they decided to move into their vacation home on Hatteras Island, but Cheryl said she began to feel isolated. Tom, who was career Navy, had been stationed on Whidbey Island and knew the area.

Another plus was one of Cheryl’s four daughters lives in Seattle, close enough to visit often. The decision was made. No more hurricanes and on to the mild weather in Sequim.

“Sequim is a real mishmash of people, which is why it is such a friendly town,” McHugh, the Realtor, maintains.

Steinman, the general manager at Thomas Building Center, said around 2005 and 2006, an influx of people — many retirees — began relocating to Sequim.

“Most of those moving here were from Texas, Arizona and Southern California, mainly for the weather, but also for amenities such as the hospital (OMC in Port Angeles),” Steinman said.

To be sure, Sequim is an enclave where more than half its residents are retired. The median resident age is 58.6 years; statewide it is 37.4 years. Other than the weather, the retirees in particular are buying homes in Sequim for its beauty, outdoor recreation opportunities and easy, relaxed way of life with very little traffic. (No, a slowdown in downtown Sequim does not count as a traffic jam.)

Camille Stephens didn’t have too many traffic jams to contend with in Juneau, Alaska, where she lived before moving to Sequim. Tired of snow and cold weather, though, she found Sequim to be the answer.

Another plus was the fact a few of her friends moved here, as well. She bought a home in the Village at Cedar Ridge, snagging a good deal on one of the homes built in 2008. Now she enjoys the close proximity to the Olympic Discovery Trail, a safe place to walk her best friend, CC, her Australian shepherd.

Not a bubble

What happens in Seattle doesn’t necessary stay in Seattle, especially when it comes to housing issues. After climbing out of the recession, home prices in the Seattle area began soaring at an extraordinarily fast-moving pace. While the highest prices remain in the Puget Sound region, and specifically Seattle, the phenomenon has spread to counties throughout the state. Overall, 37 of 39 Washington counties saw prices rise compared with a year ago and even those regions lagging way behind Seattle’s economic boom are experiencing significantly higher home costs. That leaves Washington third in the nation with the highest home prices, with Hawaii at the top and California No. 2.

The median prices for homes in Seattle, by the way, are now $630,000. Remember that is a median price, so many more homes are much more.

Sequim builders, contractors, developers and Realtors however, don’t find too many comparisons between the I-5 corridor and the North Olympic Peninsula. Yes, there are $600,000-to-$1 million homes in the area, but it’s not the norm.

“Sequim is driven a bit differently than the Seattle area,” McHugh said. “We are a little more protected from that,” meaning the bubble effect. “We were late in feeling the last bubble burst, but this is not a bubble.”

Steinman agrees, saying the building boom is completely different from the I-5 corridor.

For one thing, the City of Sequim’s Comprehensive Plan for growth and development shows citizens in this part of the country are intent on keeping their small town friendly and open, yet growing its economic base. This document is what protects Sequim from experiencing housing booms as in other areas.

The Growth Management Act of 1994 also stops sprawl in rural areas such as Sequim and its environs. According the McHugh, 80 percent of the Sequim Valley was downzoned in recent years to comply the the GMA.

A two-edged sword

The cyclical upturn and downswing of the housing market is a two-edged sword. With the new construction in a small town such as Sequim, home prices are driven up, leaving affordable housing pretty much unattainable.

“You have to control costs to allow for affordable housing,” McHugh states. That means buying houses already on the market.”

Of course, that brings up the issue of the low inventory of available older homes. McHugh said it himself; this is the lowest inventory he has seen.

For many who live in rural areas, a $285,000 home — the median sale price of homes in 2016 — is not affordable. Those who work in retail (think Walmart), the hotel-motel business (think housekeepers) or caregivers cannot afford a $50,000 down-payment and $1,200 mortgage payments, even with today’s low interest rates.

Walmart’s average sales associates makes between $8 and $10 per hour, significantly below the poverty level of $22,500 for a family of four.

It’s difficult to attract young families and professional workers to the area when they cannot make a living wage and cannot afford decent housing.

The rental market in Sequim is nearly nonexistent. Between Landmark Property Management and Action Property Management, there are six rental homes available and one condominium, with prices ranging from $695 to $1,200 per month. There are no apartments available.

Looking ahead

It is, indeed, a giddy time for many. What with the economic upturn, new homes, new and interesting folks moving from afar to what many who live here call paradise, gas prices remaining somewhat steady, what’s not to like?

“People are really doing their homework when it comes to buying a house,” McHugh said of those moving here.

“Many are ready to scale back and enjoy life. A lot of people don’t appreciate big houses anymore.”

And that’s good news. Smaller homes, dense neighborhoods mean saving open space in area communities.

Yes, affordable housing must be addressed. The city, developers and community leaders — everyone actually — must come together to find the means to buy a house for those who simply cannot afford a $300,000 home. It makes for a more diverse community when those in all economic categories can share space and time together.

“The demographic is changing,” McHugh admitted. “When I came here in 1988, everyone had a garden and more people lived in town.”

But, he added, “Sequim is still a neat, clean and safe place to live.”

It’s a safe bet that the majority of those living here agree. And there still are a lot of gardens!

Mary Powell is the former editor of the Sequim Gazette.