While the leaves are falling, Sequim’s real estate prices appear to be going up.
Sequim’s third quarter saw the “highest median price on record” and “steepest quarter over quarter in over 15 years,” according to Michael McAleer, president of the Sequim Association of Realtors, in his third quarter Sequim Real Estate Report.
That’s about a 12 percent increase, to about $440,000, from the second quarter’s approximate $387,000 median sale price.
Despite the higher prices, the number of homes available was the lowest in 15 years for a third quarter at 190 with 108 pending or under contract.
Tom Blore, a real estate agent with Peter Black Real Estate, said “listings don’t last long on the market, and for a lot of them we’re getting multiple offers.”
“A lot of people are looking to buy, but there’s not a lot of inventory,” he said.
McAleer, managing broker for Team McAleer at RE/MAX Prime, and other real estate agents echo a similar sentiment that buyers must be prepared to act quickly and expect multiple offers.
While some agents reported down percentages in showings during the first month or two of the COVID-19 pandemic, they’ve largely responded with work-arounds, such as online showings and safety precautions, to match the high interest.
“It’s like a floodgate effect,” McAleer said about sales since this spring.
Rates, interest, availability
McAleer said one of the big pushes for the low inventory is low interest rates at less than 3 percent, allowing buyers to afford larger homes over time.
Sequim’s median price remains lower than Seattle and neighboring cities around $780,000, too.
“Places like Sequim are becoming viable and affordable options,” McAleer said.
In his report, he said an improving internet infrastructure and sustaining the good retirement destination title are some of the big draws along with the lower traffic, slower pace, and scenery.
“(Some are thinking), why would we live in a place like (Seattle) when we for half or a third less live in a place like Sequim?” he said.
In an analysis by JACE Real Estate Company, the number of available homes has declined each year since 2016 while average prices have gone up from 2012-2019 ($208,903 to $361,721).
Finding entry level or fixer upper homes have remained limited too at $200,000 or less. In Sequim, 162 homes at or below that level sold in 2013, and have gone down to 37 in 2017, 16 in 2018, 18 in 2019, and 11 so far this year.
JACE Real Estate also reports that Port Angeles’ market saw 200-plus homes in the $200,000 or less range sell each year from 2012-2017. But sales of those homes have dropped to 132 in 2018, 98 in 2019 and 28 so far in 2020.
“The day of the $100,000 stick-built home is long gone,” said Eileen Schmitz, president and designated broker for Jace Real Estate Company.
“As entry level homes increase in price, potential buyers are paying $20,000 or even $50,000 for the same house they looked at a year ago so their dollar budget no longer buys that same house.”
She said that also impacts landlords because when “the price to purchase rises, so do the rents that tenants pay.”
“Although interest rates make it more home for your money, the fact is the median price continuing to rise does price out a lot of family-aged people,” McAleer said.
“There is an affordability problem growing.”
From her recent experiences, Schmitz said people seeking Sequim are “weather refugees,” “wildfire refugees” and people coming from higher real estate prices.
“A house that went on the market two weeks ago sold for $1.1 million in five days with multiple showings and offers for over list price,” she said.
Another home listed for more than $1 million has seen an increased interest in recent months with more showings, she said, because buyers are adapting to new lifestyles of working and schooling from home.
Homes sold for more than $700,000 have risen in recent years in the Sequim area, Schmitz reports.
About five homes at that price point were sold annually from 2010-2013 grew to upwards of 25 sold annually from 2017-2019. Through September of 2020, more than 30 homes have been sold in 2020 at $700,000 or more in Sequim.
Port Angeles has seen more expensive homes increase in sales while at different market demand levels. From 2017-today, 30-plus homes sold each year at or above $500,000 in Port Angeles with upwards of 39 in 2017 and 35 so far this year.
Schmitz said “there are many jewel box homes in Sequim and Port Angeles with high end appliances, finishes, and features on smaller scales (in) both price and size even though they are luxury in quality and features.”
One example is a home with less than 1,600 square feet with custom woodwork, built-in artwork, artisan light fixtures and more.
“Luxury means a higher price per square foot (where) the dollars invested in creating the home are hopefully and ideally returned when the house sells,” Schmitz said.
On how increasing property values are affecting Sequim, she said it’s somewhat reflected in the area’s retail with more high-end clothing stores, products at grocery stores and a growing interest in organic products.
However, she said it’s partially the responsibility of real estate agents to educate buyers about Sequim’s amenities.
“We have to educate them about how to bring dollars into our local economy,” Schmitz said.
“We each have that responsibility to keep that money in our community. That’s what benefits our neighbors.”
Land sales continue to be hot commodities as well in the Sequim area, McAleer reports.
In the third quarter 78 parcels sold, which was the highest for a third quarter since 2004.
Median prices fell to $99,000 and 1.01 acres sold, but McAleer said it comes with a caveat that 20 City of Sequim lots sold that are smaller and less expensive than lots in unincorporated Clallam County.
Costs for building have gone up, but McAleer said some land buyers aren’t building now.
“Almost retirees” are getting “their piece of Sequim while they work their last years before retirement,” he said.
As of his report, there were 178 land parcels with 54 pending or under contract.
Sequim’s real estate trends follow Seattle by about one to one-and-a-half years, McAleer said.
However following the 2000s housing bubble, Seattle prices fell about 35 percent but Sequim took longer to begin and reach those levels over a few years, he said.
“In Seattle, they needed to sell because they lost their job or needed to move. They were motivated to sell,” McAleer said.
“Sequim’s sellers were not forced to sell and often retirees who didn’t need to move and were unwilling to lower prices.”
Past fourth quarters for Sequim see a drop in inventory and demand as the weather turns colder, McAleer said.
But with the current growing trends, he’s confident that “prices will continue to appreciate” as interest rates remain low.
Blore feels similarly.
“I’ve been doing this a long time,” he said. “Sequim sells 12 months out of the year. Even around the holidays, people come to visit family and are still looking at property.”