By Joe Smillie
Peninsula Daily News
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After suffering through years of slumping home prices, an early 2013 real-estate buying binge centered in Sequim looks to be an indicator that the housing market is beginning to turn up from the bottom.
“The housing recovery we've been waiting for in Sequim for the past five years seems to be here,” said E. Michael McAleer, president of the Sequim Association of Realtors.
According to the Olympic Multiple Listing Service, 622 homes were listed for sale in Sequim and Port Angeles on April 1, a 7 percent drop from the 667 on the market at the same time in 2012, a surprising trend given the time of year, experts say. Housing inventories are diminishing in Port Townsend and East Jefferson County.
“The first quarter of any year is traditionally the slowest quarter in terms of sales volume here in Sequim,” McAleer said.
Not this year.
Across the entire North Olympic Peninsula, the number of homes listed for sale is down after the year's first quarter, from 1,153 on the market after the first quarter of 2012 to 1,007 this year.
Giving Realtors more hope that the trend will continue is the number of home sales pending on April 1; 398 in 2013, up from 307 in 2012.
Powered by Sequim's strong spring, the number of homes sold in Clallam County rose from 107 in the first quarter of 2012 to 157 in the first quarter of 2013, according to data from the two real estate listing services that track the county's housing market.
The number of homes sold in Sequim alone rose from 56 to 105.
While the average Sequim home price has only slightly risen, from $220,000 in 2012 to $222,000 this year, McAleer said that gap should widen.
“The increased sales volume and decreased inventory are indicators of good things to come,” McAleer said.
Fewer homes sold in Port Angeles during the first quarter 2013 than the year before, but Kelly Johnson, president of the Port Angeles Association of Realtors, said the market has started to heat up lately.
“I swear, when I walked in on Jan. 1, there was just this palpable feeling of an about-face from the year before,” Johnson said.
The Olympic MLS shows 86 homes sold in the first three months of 2013, down from 90 in 2012.
But the average price paid for those homes rose from $159,044 to $178,975.
Johnson said the early year drop was primarily because December 2012 was one of the worst home-buying months on record, meaning few sales closed in January.
The MLS appears to show a turnaround in the works, with 76 homes currently under contract in Port Angeles, compared with 57 at the same time a year ago.
Johnson said there was a flurry of home buying in Port Angeles in early March, but that eased after 130 union mill workers went on a brief strike at Nippon Paper Industries USA.
The recent surge in real estate is driving it further upwards.
As Johnson noted, buyers have become more savvy since the 2008 market crash and are noticing prices going up.
For evidence, she pointed out that 79 percent of the homes sold in Port Angeles went for less than $200,000.
“That's first-time buyers right there,” she said. “They're seeing the inventory start to dry up, and are deciding it's time to get off the dime.”
Low interest rates also make this a good time to buy, according to Aimee Dennis, senior loan officer for Cobalt Mortgage in Sequim.
“Consumer confidence is definitely on the rise,” Dennis said. “Now, a lot of renters are getting in because interest rates make mortgages much more affordable and they can still get a great home for a great price.”
Forks, West End
Activity in Forks stayed relatively flat.
The West End hub had 32 listings on the Northwest Multiple Listing Service through the end of March 2013, just one fewer than 33 at the end of March 2013.
Forks had 16 homes sell in the first quarter of 2013, up from 11 in the same period of 2012.
Average price paid for Forks homes rose slightly from $175,174 in March 2012 to $179,578 in March 2013.
“Sequim's market generally lags a year or so behind the Seattle and California markets which have been sellers' markets for a year or more depending on the area,” McAleer said.
North Olympic Peninsula homebuilding
Though the number of existing homes sold is increasing, the home building economy has not shown signs of recovery.
FaLeana Wech, executive director of the North Peninsula Builders Association, reported the number of permits for single-family dwellings has fallen so far in 2013.
“But we've kind of reached the bottom, and hopefully that means we're going to start moving up,” she said.
In the first quarter of 2012, there were 23 building permits issued for homes. In the same period of 2013, there have been 18 permits issued by Clallam County, the city of Sequim and the city of Port Angeles.
Wech also said recovery in the Seattle-area markets is a good sign for the peninsula.
“We feel good that the overall recovery in other markets will positively impact our market in the months to come,” she said.
East Jefferson County
This spring has seen a spike in home sales in Jefferson County, leading area Realtors to believe a long dry spell that has been the North Olympic Peninsula's real estate market for the past few years has come to an end.
“We feel like we've reached the other side of the desert,” said Karen Best, a Jefferson County Association of Realtors director.
“And I don't see a mirage.”
The number of homes put on the market in Jefferson County dropped during the first three months of 2013, compared with the first quarter of 2012, while the number of sales has seen a dramatic increase and a 17 percent rise in prices.
At the end of the first quarter of 2013, January through March, the Northwest Multiple Listing Service had 353 homes listed for sale in Jefferson County. That is 22 percent lower than the 453 listed in the first quarter of 2012.
“It definitely feels like the inventory is starting to dry up,” said Ron Helmonds, president of the Jefferson County Association of Realtors. “And the lower end is starting to disappear.”
Which means the trend could continue.
“We're expecting to see a very brisk summer,” Best said.
According to the Northwest Multiple Listing Service, 226 homes sold or were in the process of being sold in Jefferson County during the first quarter of 2013, compared with 177 in the same time frame in 2012, a 22 percent rise.
The number of first quarter 2013 sales in the county seat almost doubled the number of sales in the first quarter of 2012.
The MLS reports 112 closed or pending sales in Port Townsend in that time frame, compared with 66 in the same period of 2012.
Best said the city follows fairly closely the trends of the Seattle market, as retirees from the metro King County area sell their homes there to retire to Port Townsend.
“We definitely have an older demographic, and that means we're a little more reliant on other markets,” she said.
The Northwest MLS shows a 42 percent drop in the number of homes listed in King County, from 6,700 on April 1, 2012 to 3,860 on April 1, 2013.
Average sale price of a King County home also rose, from $295,000 to $349,950.
As retirees in Seattle have an easier time selling their homes there, they are more able to purchase homes on the Peninsula, she said.
The 2013 market outside Port Townsend has been hit and miss.
Listings are down and sales up in Port Ludlow, where 49 homes were on the market at the end of March 2013, down from the 72 listed in 2012.
Sales also have increased in Port Ludlow, with 39 homes selling in the first quarter 2013 compared with 27 in first quarter 2012.
The MLS reports a slumping market in south Jefferson County.
Listings in Brinnon are up from 2012, 45 to 32, while sales have dipped slightly from five during last year's first quarter to four this year.
Quilcene had 21 homes listed at the end of March, up from 18. First quarter sales in Quilcene fell from nine last year to eight in 2013.
A lingering holdover from the housing slump is low appraisals.
With the market turning up from what is now believed to be its bottom, home valuations required by most lenders are still based off the slumping values.
Judy Maves-Klatt with MK Appraisal said the low sale prices have had an impact on loan appraisals, but expects that will turn around also if the housing market continues to grow.
“It's a game of statistical catch-up,” Mavesklatt said.
Sequim-Dungeness Valley Editor Joe Smillie can be reached at 360-681-2390, ext. 5052, or at email@example.com.