PORT TOWNSEND — Jefferson County’s real estate market can be summed up succinctly:
Home inventory higher, sales slower.
“We’ve seen the county soften considerably,” said John Eissinger, Jefferson County Association of Realtors president and associate broker at John L. Scott Real Estate in Port Townsend.
It is a market adjustment come true, one that real estate agents predicted at the beginning of the year, after mortgage loan interest rates below 6 percent helped spawn stellar sales in 2005.
During 2005, 702 existing homes were sold countywide, with the median price at year’s end being $280,000, according to Northwest Multiple Listing Service..
This year, sales through Aug. 31 have totaled 349 countywide, compared to 403 sales during the same period in 2005, said Eissinger.
The median price for the entire county this year is now at $325,000.
“Last year, we had two to three people bidding over the same piece of property,” said Eissinger. “We’re not seeing that anymore.”
While reasons for the downward sales trend cannot be pinpointed, Jefferson County’s market appears to be following national sales trends.
Across the United States, the pace of housing sales dropped 21.6 percent since summer 2005, according to Commerce Department figures reported in August.
Washington state’s median price rose to $293,000 during the second quarter of this year, 14.9 percent above a year ago., according to the Washington Center for Real Estate Research.
But nationwide, the rate of increase has slowed, according to the latest figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage-finance companies Fannie Mae and Freddie Mac.
Average home prices rose 1.17 percent in the April-to-June period, compared with 3.65 percent in the second quarter of 2005.
That’s the biggest decline in price growth the agency has noted since it began keeping records in 1975.
A buyer’s market
Most real estate agents with a history in Jefferson County’s market ups and downs see it as just another down cycle. Nothing permanent.
“It’s definitely moving into a buyer’s market,” said Michelle Sandoval, a Realtor in Port Townsend and Jefferson County for 14 years and co-owner of Windermere Real Estate Port Townsend.
“It was a transition market for about a year.”
Sandoval adds that sellers are still coming around to realizing it has become a buyer’s market, with some sticking to prices she sees as too high to sell right now.
“It’s a transition,” she said, adding that she believes the market trend will remain the same for perhaps two years.
“This is a cycle. It’s not a bust or boom market. This cycle won’t last forever.”
She said that is because the Port Townsend and Jefferson County market is attractive to many baby boomers with cash who wish to retire here.
Just back to normal
While it could be interpreted as a market downturn, a state real estate researcher concludes that the market has merely returned to normal.
“If they look very carefully they will see that they are very well ahead of where they were,” Glenn Crellin, director of Washington Center for Real Estate Research said of sales.
“It’s not a strong buyer’s market out there, it’s just a normal market.”
He said those who don’t mind living in their homes for a while will likely get the sales price they want if they just wait it out.
J.W. Olsen, broker with Windermere Hood Canal Properties who has sold Jefferson County real estate for about 54 years, agrees that the market will recover after the cooling period.
He has seen many ups and downs since he first sold real estate in the 1960s in East Jefferson County.
“I’ve seen the cycles when interest rates were 18, 19 and 20 percent, and now people are saying 8 percent is too high,” Olsen said.
Fact is, interest rates were bouncing between 5 and 6 percent in 2005.
This year, rates were running between 6 and 7 percent, but have fallen to the lower 6-percent range in recent months.
Rates are expected to drop below 6 percent again, real estate agents said.
Another factor in last year’s hot market: Home inventory throughout the county was at an extreme low, driving prices up.
A normal inventory sustains the market for five to seven months, real estate agents said.
