The Sequim real estate market (and Port Angeles’ market) is heavily dependent upon markets in other states, including California and Arizona. Signs of improvement in California’s real estate market bodes well for sellers here. I would estimate that more than 50% of our home and land buyers for the Sequim area come from outside the area (CA, AZ, TX, CO, and Seattle).

The quarterly UCLA Anderson Forecast said foreclosure rates will remain a significant problem in the state [of California] at least through the end of 2008 and into 2009, economist Ryan Ratcliff wrote in one section of the overall economic forecast. But “we may be transitioning from the free fall” of widespread foreclosures that drive down home values and prompt more foreclosures.

Ratcliff said the fact that home sales in some Bay Area and Southern California counties have increased from year-ago levels just recently is “an encouraging first sign of a market starting to find its new equilibrium.” [Read full article.]

Lost Gatos, California may be seeing signs of strength. “A look at the single family home situation in the town of Los Gatos reveals an improvement over recent months.” [Read full article.] Sacramento is seeing sings of improvement [Read full article] as well as Santa Barbara [Read full article.]

Arizona is seeing signs of strength.

“Investment interest is being driven by the anticipation that home prices will rise again in the next few years,” said Butler. “The lower median price is being impacted by several forces, including the large number of vacant homes, especially in certain neighborhoods. Further, capital is available for lower-priced housing, but lacking in the higher priced housing market.” [Read full article.]

The Seattle market is also showing positive signs for buyers, and not so negative news for sellers.

“Despite national reports which suggest that no homes are being sold, a sales rate of nearly 98,000 units (statewide) is similar to the number of sales that prevailed 10 years ago,” a statement accompanying the report said. Although Washington’s year-to-year sales drop was a bit bigger than the nationwide decline, “the state’s markets remained more robust than many areas in the West.” [From the Seattle PI, Read Source here.]

What does this mean for the Sequim and Port Angeles market? It means when markets improve in these areas, sales here get a strong push. If you’re a seller, position yourself to connect with these buyers when they’re ready to move.

The Sequim real estate market, as well as Port Angeles’, is uniquely localized, but that is true of much of the country. National markets, trends, and regional economic variables impact, but do not determine local prices and sales. There is one market that impacts Sequim and Port Angeles home sales more than most, and that is the California market.

If California homeowners are not able to sell their homes, a significant percentage of buyers of homes and land in Sequim and Port Angeles go away. But there are signs of improvement.

“Despite all the dire headlines about the drop in real estate prices, 56 percent of the 292 metropolitan areas surveyed nationwide showed net price appreciation for the past year. . . . Kerry Killinger, CEO of Washington Mutual, said his company is seeing ‘a slight improvement over the last month or so’ in California — the single largest and hardest hit segment of the U.S. housing market. ‘There’s (been) some pickup in demand,’ Killinger said. ‘(We’re) watching this very closely (because) this may be indicating a troughing of conditions.’ That means that maybe — just maybe — the protracted real estate plunge in California is showing hints of finally flattening out.” [RealtyTimes online]

In the first four months of this year, 168 homes sold in Sequim and Port Angeles. That’s an average of 42 homes sold per month. Sales are down from the banner year of 2005, but buyers are clearly still buying, and that is good news for home sellers. In comparison, the first four months of 2007 had total sales of 200, or 50 homes sold per month. This is by no means a housing crash, certainly not in a small real estate market such as Sequim and Port Angeles.

[Source of data: Olympic Listing Service, homes sold are site built only]
Courtesy Sequim & Port Angeles Real Estate, LLC