Last of four parts
SEQUIM — Many of those who might otherwise put their homes up for sale in the Sequim-Dungeness Valley have instead chosen to ride out the economic storm.
The result: Fewer homes on the valley’s market than in the past four years.
“When you don’t know where the market’s going as a buyer, you tend to protect yourself,” said Mike McAleer, RE/MAX Fifth Avenue lead agent, who has been in the Sequim-area real estate business since the early 1990s.
He now heads up “Team McAleer” with his daughter, Colleen, and son, E. Michael McAleer.
Fear of uncertain economic times is more the driving force behind slower real estate sales these days, explained McAleer, the team’s senior adviser.
“What’s it going to be worth in a year?” he said, echoing what’s on the minds of many sellers today.
Heidi Hansen, Sequim Association of Realtors president and managing broker for Coldwell Banker Town & Country, explained the challenging seller side of the equation.
“Buyers have not just been looking for deals; buyers have been looking for steals,” she said.
“Home prices and interest rates make home buying affordable, but the Great Recession still impedes consumer confidence.”
Calling 2009 “a miserable year” for sales, Colleen McAleer, Team McAleer’s Realtor statistician, reported in the team’s first-quarter residential recap: “2010 was much better. 2011 is not quite as robust as 2010 started out to be.”
In the first three months of 2010, an average of 24 homes were selling per month, she said.
“In 2011, we are off that slightly, with 22 homes selling on average per month,” she said.
“That’s a 7 percent drop.”
She sees a growing trend in the sale of higher-end homes.
The first quarter in the Sequim-Dungeness Valley market saw five homes sell above $500,000 or more, with another seven in the contract stage.
“I anticipate that we will at least double last year’s number of high-end sales,” she said in her report.
But the distressed sales market is showing no signs of abating.
A distressed sale can refer to bank-owned property known as real estate owned, or REO; a “short sale,” in which the asking price was less than the seller owes; or a foreclosure, in which the seller fell behind in mortgage payments and received a letter of default from the lender.
“In the last four months, we have seen a worrisome change to the ongoing trend,” the Team McAleer report said.
“Last month [March], 11 of the 26 sales, or 42 percent, were distressed sales, all of which were REO or banked-owned properties,” the report said.
“In February, eight of the 18, or 44 percent of the sales, were distressed.
“In January, only two sales were distressed, but that is because banks pushed to get those properties sold prior to the beginning of the year. December of 2010 had 15 distressed sales,” the report said.
The report concluded that December through March saw a total of 109 homes sold, 36 of which were distressed sales.
“This has put a real downward pull on the overall market,” the Team McAleer report said.
Washington state ranks 12th in the nation in foreclosures. It ranks 18th in the number of seriously delinquent mortgages.
“We must absorb the distressed and foreclosed inventory for a complete recovery,” Hansen said.
“Seriously delinquent mortgages of 2010 will become the foreclosures of 2011. It’s a sad thing when people have such an economic change in their life that they can’t make their mortgage payment.”
She said many rental property owners from hard-hit California who had bought rental properties in the area as investments have stopped paying mortgages.
E. Michael McAleer, who specializes in educating and hunting down homes for buyers, sees two buyer’s markets — “the retiree haves and the working class have-nots.”
He sees that as a sign that overall sales will pick up in the coming year.
“People who were ready to retire in 2008 to 2010 put that on hold because their 401(k) looked bad and because they couldn’t sell their homes,” he said.
Many of those retirees will reconsider with markets improving where they come from, he said, such as metropolitan parts of California.
But those buyers are looking for “elbow room” in their retirement — lots of an acre or more — which will not help sales of much-smaller lots inside the city of Sequim.
For buyers, foreclosures do keep home prices down.
The median price for homes in the Sequim-Dungeness Valley was $210,000 last quarter compared with $180,000 the first quarter of this year, according to Multiple Listing Service numbers extracted by Hansen.
The median price declined by about $30,000 from the fourth quarter of 2010 through the first quarter of this year.
During the first quarter of this year, the highest number of homes sold — 57 — were in the $200,000 range, compared with 48 sold in the $150,000 range in the first quarter of 2010.
The fourth quarter of 2010 ended with 62 homes sold in the $200,000 range.
The lowest number of homes sold were in the $600,000 range or more.
The fourth quarter of 2010 saw a surge of homes sold in the $300,000 range — 58 — compared with 31 in the first quarter of this year and 10 in the first quarter of 2010.
At the end of this year’s first quarter, 257 homes were on the Sequim-Dungeness Valley market, 49 of them foreclosures.
There are 124 members in the Sequim Association of Realtors, down from more than 200 at the height of the real estate market five years ago.
“We have a lot of people who do it as a sideline,” Hansen said.
“We have lost a lot more who have done it as a sideline than we have as [full-time] Realtors.”
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Sequim-Dungeness Valley Editor Jeff Chew can be reached at 360-681-2391 or at jeff.chew@peninsuladailynews.com.