About Clallam County, WA

Are homes being built in Sequim and Port Angeles? How many new homes are being built so far in 2008? Has the slowing real estate market and the troubled economy hurt the building industry? No doubt it has, but the picture is brighter than I might have thought just by reading headlines and listening to the talking heads.

I’ve tracked building permits issued by Clallam County from 2005 through September of 2008, and here are the results:

I’ve included data for single family stick-built homes, manufactured homes, and duplexes. We see again proof that 2005 was a banner year in real estate with 359 permits issued for homes. Since then we have a steady decline, and for the first nine months of this year, we have 160 building permits. Annualizing this number would give us a rough equivalent to the number issued last year, but I suspect that the remainder of this year will see fewer permits with the year ending at about 190 building permits.

This is good news. You would have thought no one was planning to build a home, but in fact many are, an average of about 17 each month. That’s not a big number, but in little Clallam County, that’s a positive number in the worst real estate market in decades.

I’ve included data for manufactured homes to show they are still a factor for many retired couples moving here. I also included duplexes only to show that we have virtually no duplex market here at all. That may answer a few questions for investors who email me asking about duplexes.

[Source of Data: Olympic Listing Service]

Sequim is a wonderful place to live. Here are seven reasons I love Sequim, and why you might love it, too.

1. Sequim is a beautiful and peaceful community with water views, mountains, and old growth forests;

2. Sequim has retirement communities, lots and homes built to suit retirees in close proximity to shopping and community activities (but you can also buy a farm or 5 acres outside of town);

3. Sequim’s school district is one of the best in the country, and the children are all above average (4 of them are mine);

4. Sequim has an extremely low crime rate, and you’ll feel like you went back in time 30 years;

5. Sequim doesn’t suffer the traffic nightmares of most cities (do you love the country?);

6. Sequim has great weather and is popular for its rain shadow, meaning it gets about a third of the rain fall of Seattle; and

7. Sequim has an amazing variety of recreational activities, such as fishing, boating, bicycling, hiking, flying, marathons, dog shows, farmer’s markets, boat races, bird watching, hikes into the Olympic National Park, skiing at Hurricane Ridge, short ferry rides to Victoria, B.C., horse riding, lavender farms, great motorcycle rides around the Peninsula, more volunteer activies than one can list here, dozens of hobby groups and clubs, and just about anything you can imagine for every age group.

[Photo by Chuck Marunde, John Wayne Marina in Sequim]
[Original Article Posted at: Sequim Real Estate News]

What's the secret of Sequim weather? Is there a rain shadow? Is it warmer and does the sun shine more in Sequim than in Port Angeles? Well, this is a topic of conversation from Port Angeles to Santa Barbara and Houston.

Finally, you can compare the weather in Sequim and Port Angeles LIVE right here. See this live comparison of the weather in Sequim and Port Angeles.

Sales volumes continue to decline. You may recall that in June the volume was down by 24 percent. It's now off by 33 percent.

Last year there had been 291 homes sold by the end of August. This year we have sold 195 or 67% of last year's levels. Sales numbers are down in every price point with the higher-priced homes showing the strongest declines.

Many of our upper-level priced homes are purchased by out of area buyers and while Washington state has not suffered from the sub-prime debacle as several other areas of the country have, a downturn in the other markets does have a reflection in ours. It is not uncommon to hear buyers lament, "Our home hasn't sold yet so our plans are on hold."

Homes sales for the $500,000 - $599,999 level are off by 75% and those priced from $400,000 - $499,999 are down by 61 percent. Homes sales for those priced above $600,000 are off by 58% followed closely by homes in the $300,000 - $349,999 range; off by 59 percent. The $350,000 - $399,999 priced homes are down 55% from last year's sales level.

We have a much stronger inventory of homes priced to $199,999 with 71 currently available. Last year there were 48 at this time. And even though lower-priced homes have sold well this year, the level is down 18 percent from ‘07.

The next segment of homes, $200,000 -$249,999, is almost identical in inventory from this time a year ago with 63 currently available, versus 65 in 2007 but the sales volume has dropped 31 percent.

There are 13 fewer homes priced from $250,000 - $299,999 (74 versus 87) than we had available last year and the sales volume has dropped almost 28 percent.

So what does it all mean for someone who wants to sell? Has the market tanked? Are people losing money because home sales levels are falling? In short, no.

Real estate, despite what the infommercials would have you believe, is a long term investment. Some years the return is much better than others and if you look at only this year you are not seeing the whole picture. Look instead at what has happened to your home's value since it was purchased. While the appreciation may not be as dramatic as you had hoped for in the short term, overall home values have and will continue

to grow. Washington is a very desireable place to live and the influx of people will keep pressure on the markets and that will fuel appreciation. Planning forecasts anticipate an average of 100,000 people a year moving into the state through 2015.

Yes, this year there are fewer buyers and in a market where values are determined by activity, it is a great time to be a buyer. But even if you don't make the killing you were hoping for selling your home, odds are your investment has made a sustantial gain in value. And while it may take longer to sell, bear in mind that only the homes that are listed will be the ones that someone will buy.

While inventory is still up over 2007 levels, surprisingly, homes under $200,000 predominate the market. Last year there were 41 homes in that price point. Right now we have 72.

Homes priced in the $200,000 - $249,999 range number the same as last year at this time; 65. Inventory for those in the $250,000 - $299,999 segment is slightly under last year's with 72 versus 77 for ‘07.

If your budget is $300,000 - $349,999 you will find 29% more dwellings to choose from. Currently, we have 57. And there is a 58% increase in the number priced from $350,000 - $399,999 with 45 now on the market.

Conversely, there are 58% fewer homes selling for $400,000 - $499,999. We have only 29 available as of June 30th.

In the upper two segments of the market, there are 50% fewer homes priced from $500,000 - $599,999 and 59% more homes selling at $600,000 and up, with 11 and 32 being offered respectively.

It's still taking about 30% longer to sell a home these days. The absorption rates (how long it would take to deplete a certain segment at the current sales rate) vary from about seven-and-half months for the least expensive to almost four years, three months for homes priced in the $300,000 - $349,999 range.

Homes priced from $200,000 - $249,999 have about nine-and-a-half months of inventory available. After that, absorption rates slow dramatically.

There's a two year supply of $250,000 - $299,999 homes; a 28 month supply of homes from $350,000 - $399,999; and 29 months of those at $400,000 - $499,999.

Looking at upper-end homes selling from $500,000 - $599,999, there's a 33 month inventory. And the top level of $600,000 plus has a four year supply.

Even though inventory levels are higher than the previous year's, the average days on market is almost the same, just slightly over four months.

Sales are down just about 25% from last year.

Last year we had sold 197 by this time. This year 146 have sold. Of those, sales of the under $200,000 and $200,000 - $249,999 homes have remained at the same level with 58 and 41 having sold by this time each year. By comparison, last year ten homes in the $500,000 - $599,999 range had sold. This year, two. Only homes from $600,000+ have increased over ‘07. Last year, one; this year, four.