Property Assessments– What do they mean?

 

Our office and brokers have received many calls with questions regarding the newly received property value assessments.

According to the San Juan County Assessor’s website “State law requires that assessors appraise all taxable property within the county at 100% of its true and fair market value, according to the highest and best use of the property. Fair market value, or true value, is the amount of money that a willing and unobligated buyer is willing to pay a willing and unobligated seller.

“Each year, the County is responsible for reviewing the values of approximately 20,000 parcels. Whether you have purchased your property recently or not, the Assessor will still evaluate your property on an annual basis. These annual evaluations are based on research of sales of properties within the past year. For example, if 2016 sales are available, they are used to calculate the 2017 assessed values.

By State law, members of the Assessor’s office are re- quired to conduct a physical inspection of the property every 6 years. If new construction occurs, then this new construction will be physically inspected annually until construction is completed. These physical inspections are taken into consideration when updating the current assessed value.

Once the valuation is established, your taxes are calculated based on a tax rate. Many factors determine property tax rates, the amount of property tax due on com- parable properties will vary throughout a county. The three main factors that determine the tax rate include: various combinations of taxing districts in different areas of the county, budget amounts for each taxing district, and voter-approved special levies and bonds.

Key point: these tax rates vary year to year, depending upon the County annual budget.  If assessed values go up (or down) it does not necessarily mean that your taxes will go up (or down).

If you disagree with your new property assessed value, there is an appeal process via the Board of Equalization that you may undergo. Keep in mind that you must reg- ister the appeal within 30 days of the original filing of the new valuation of your property.

The San Juan County Assessor’s website is an excellent resource for additional information:

 www.sanjuanco.com/149/Assessor

 

 

 

 

 

 

 

 

John Dunning, Designated Broker/Owner

Posted on November 29, 2017 at 10:20 AM
Windermere Orcas | Category: Financial, Housing Market, San Juan Islands

Real News – Article 4

AFFORDABLE HOUSING — WHAT COULD BE DONE

This column is the second on the affordable housing issue.  We all know what is needed, but it seems we don’t have a clear vision of how to accomplish it.

Last time I mentioned an affordable housing solution on San Juan Island that appears to have served that island well since its development in 1982. It’s called The Oaks. Located in a rural area and buffered from surrounding properties, most Islanders don’t even think about it and some don’t even know it exists.

In a time of less restrictive zoning regulations, the developer acquired 7 contiguous parcels of rural land totaling approx. 40 acres. They installed streets, sidewalks and utilities serving 76 home sites for double wide manufactured homes. The land is leased to the homeowners who  own the units, which can be resold by owners moving off-island, or to other properties. Sales prices have ranged from around $100—$200K depending on location and size of the homes. The property lease includes water, sewer and road maintenance such that the area appears well maintained.  There are relatively few sales of these homes because turnover of residents is low.

Today, due to County zoning regulations, it would be almost impossible to do an Oaks.  Yet we can see it works and addresses affordable housing needs, at least on San Juan Island by being a product that naturally falls into the right price point.  Our County needs to encourage affordable housing development by creating new zoning regulations to allow projects like this to occur today.  Of course, the devil is in the details, and zoning modification would have to include safeguards such that neighbors would not be adversely affected.

Orcas Island has areas of forested and/or buffered land where thoughtfully-designed high-density development could occur on otherwise low-density land. This would be an excellent topic for each of us to address with our Commissioners.  The time may now be right for such a discussion.

Since I started this column, I have received a fair amount of thoughtful feedback and I encourage you to give me a call or drop by to say hello and discuss any Island issue you feel is important.  My intention is to make this column thought provoking and helpful in some small way.

 

 

 

 

 

 

John Dunning, Designated Broker/Owner

Posted on November 6, 2017 at 4:42 PM
Windermere Orcas | Category: Housing Market, San Juan Islands

Real News – Article 3

In a past article I discussed where our Buyers are coming from, but in this article, I think you might like to see how our 2017 sales market stacks up against last year at this same time….

The total number of Orcas sales has increased from 42 in 2016 to 53 this year to date.  But that doesn’t tell the whole story, because the price points where the sales have occurred are significantly different year-to-year.

The 2016 and 2017 number of properties sold between $150 and $350K are very similar.  But, starting at $400K thru $550K, there have been almost twice as many sales in 2017.  Interestingly, homes priced in the $600K range sold better in 2016 with the $700K range being very similar year-to-year.

The real change is from $800K and up.  Last year there were no sales in the $800K range but there have been a number of sales this year.  2016 sales between $900K and $1,400K were stronger than 2017, but 2017 exceeded from $1,500K and above.

What can we draw from all of these statistics? Honestly, no real pattern other than the availability of inventory is our largest determinant of what sells.  We have a shortage of properties currently on the market, and yet many buyers are still coming into our offices on a daily basis, still looking for their dream home or second home.  Isn’t this just the way it always happens?

For those owners who have been hesitant to list their Land or Homes, we haven’t seen a better time than now!  And that isn’t just hyperbole.  We are approaching our prime selling season of the year.

People visit Orcas during the summer, fall in love with the Island, return home to mainland America, and start trying to figure a way to make our home their home. They return in September with money in pocket, ready to make their move.  It’s just the way this business works.

Enough of statistics….we wish everyone a wonderful fall in the Islands and hope to see many of you in the office, where the coffee is always on and the conversation interesting and friendly.

Until next time,

 

John Dunning, Designated Broker/Owner

 

Posted on September 19, 2017 at 3:39 PM
Windermere Orcas | Category: Articles, Buying, Housing Market, Selling

Real News – Article 2

A few months ago, the Wall Street Journal published an article stating that the San Juan Islands are the fastest growing luxury home market in the country. This article has created many discussions in the local real estate world all revolving around the question: “What does this statistic mean?”. It also asks the question: “Who is really buying on Orcas Island?”

It may surprise you to find out that in the past twelve months, of the 191 sales of both land and residential properties on Orcas Island, 75 of those sales were represented by Buyers already living on Orcas Island. No wonder the locals pay such close attention to the real estate market!

In addition to these 75 purchases, 48 of the sales were by Buyers from the Seattle metropolitan area, and 11 from greater Washington State. That equates to 70% of our Buyers being from Washington State.

The graph below illustrates the breakdown of where our Buyers are coming from overall.

I hope you find these statistics as interesting as I do. If you have any questions, or would like more information, stop by our office here in Eastsound to speak with any one of our highly qualified Brokers….We always love to talk real estate!

 

Sincerely,

John Dunning, Designated Broker/Owner

*Source: NWMLS & Realist

 

Posted on September 8, 2017 at 11:44 AM
Windermere Orcas | Category: Articles, Buying, Housing Market, San Juan Islands, Selling

Real News

As the owner of the Windermere agency on Orcas, I am often asked; How’s the market? The answer is that the market is continuing to improve, and we are grateful to be past the challenging times of 2009 – 2012. But, this answer warrants further comment.

We have come a long way from 2009, when four months passed without a single real estate sale occurring on Orcas Island. In contrast, during the  first six months of 2017, 45 homes sold, leaving us with only 113 active Orcas listings today.  It’s easy to understand why our Buyers are struggling to find their “perfect home.”

It is evident, however, that pricing correctly is still the key to achieving a sale.  The average number of days on the market for the homes that have sold within the past 6 months is 185 in contrast to an average of 248 days for the active listings, with many having been for sale for more than a year.

When we look at the residential market by price range, the bulk of the activity is still occurring in the $300,000 -$599,000 range, where 26 of the 45 homes sold this year were located.  The  median number of days on market for homes in this range has decreased to 52 days.* Currently 17 homes are in escrow, which means it will take 6.6 months to absorb the current listed inventory.

As you can see, there truly is a bit more to answering the “How’s the Market” question.  If you would like more information, or to inquire as to your property’s value today, please stop in to visit with one of our 22 Orcas-based brokers.  We always love to talk about the market!

 

 

John Dunning, Designated Broker/Owner

*Source: Real Market Reports.

 

Posted on August 31, 2017 at 12:28 PM
Windermere Orcas | Category: Articles, Buying, Housing Market, Selling

The Gardner Report – Q2 2017

content_17288_WWAGardnerReportQ2_Masthead

 

ECONOMIC OVERVIEW

The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017.

Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976.

I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity.

 

HOME SALES ACTIVITY

  • There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016.
  • Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County.
  • The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago.
  • The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017.

 

 

 

HOME PRICES

 

  • Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187.
  • Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages.
  • When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth.
  • The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices.

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016.
  • King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago.
  • Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016.
  • Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement.

Inventory is short and buyers are plentiful.

Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year.

Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust.

 


Posted July 26 2017, 11:00 AM PDT by Matthew Gardner, Chief Economist, Windermere Real Estate. Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K. Find the original post here

 

 

Posted on July 27, 2017 at 8:11 AM
Alysha Sherburne | Category: Articles, Buying, Housing Market, San Juan Islands, Selling

The Gardner Report – Q1 2017

 

ECONOMIC OVERVIEW

I’m happy to report that Washington State continues to add jobs at a steady rate. While the rate of growth is tapering, this is because many markets are getting close to “full employment”, during which time growth naturally slows. That said, I believe that the state will add around 70,000 jobs in 2017. Washington State, as well as the markets that make up Western Washington, continues to see unemployment fall and I anticipate that we will see this rate drop further as we move through the year. In all, the economy continues to perform at or above average levels and 2017 will be another growth year.

 

HOME SALES

  • There were 15,652 home sales during the first quarter of 2017. This is an increase of 9.5% from the same period in 2016, but 20.7% below the total number of sales in the final quarter of 2016.
  • With an increase of 45.5%, sales in Clallam County grew at the fastest rate over the past 12 months. There were double-digit gains seen in an additional 10 counties, suggesting that demand remains very robust. The only modest decline in sales was seen in Grays Harbor County.
  • The number of homes for sale showed no improvement at all, with an average of just 6,893 homes for sale in the quarter, a decline of 33% from the previous quarter and 25% from the first quarter of 2016. Pending sales rose by 2% relative to the same quarter a year ago.
  • The key takeaway from this data is that 2017 will offer little relief to would-be home buyers as the housing supply remains severely constrained.

 

 

HOME PRICES

  • With demand continuing to exceed supply, home prices continued to rise at above-average rates. Year-over-year, average prices rose by 9.5% but were 1.1% lower than in the final quarter of 2016. The region’s average sales price is now $409,351.
  • Price growth in Western Washington is unlikely to taper dramatically in 2017 and many counties will continue to see prices appreciate well above their long-term averages.
  • When compared to the same period a year ago, price growth was most pronounced in Kittitas County, which rose by 19.6%. Double-digit price growth was seen in an additional 10 counties. The only market where the average price fell was in the ever-volatile San Juan County.
  • It is clear that rising interest rates have not taken much of a sheen off the market.

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the first quarter dropped by 16 days when compared to the first quarter of 2016.
  • King County remained the tightest market, with the average time to sell a home at just 31 days. Island County was the only area where it took longer to sell a home than seen a year ago; however, the increase was just one day.
  • In the first quarter of the year, it took an average of 70 days to sell a home. This is down from the 86 days it took in the first quarter of 2016, but up from the 64 days it took in the final quarter of last year.
  • Given woefully low levels of inventory in all Western Washington markets, I do not expect to see the length of time that it takes to sell a home rising in 2017. In fact, it is likely that it will continue to drop.

 

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the first quarter of 2017, I moved the needle a little more in favor of sellers. The rapid increase in mortgage rates during the fourth quarter of 2016 has slowed and buyers are clearly out in force.

 

 

Posted May 1 2017, 11:00 AM PDT by Matthew Gardner, Chief Economist, Windermere Real Estate

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.

Posted on May 2, 2017 at 8:41 AM
Alysha Sherburne | Category: Articles, Housing Market

First Time Buyers, Millennials, and What to Expect in 2017

 

I believe that the big story for the coming year will be first-time home buyers. Since they don’t need to sell before purchasing, their reemergence into the market ensures that sales will continue to increase, even while inventory is limited. Thirty-one percent of buyers currently in the real estate market are first-time buyers, but it would be more ideal if that figure was closer to 40 percent.

Why don’t we have enough first-time buyers in the market? With Baby Boomers working and living longer, we aren’t making much room for Millennials to start their careers. Plus, the major debt that the younger generation owes on student loans ($1.3 trillion today) hugely impacts the housing market. But the bigger issue is lack of down payments. Before the recession, many Millennials could look to their parents for help with down payments; however, these days that is not as much the case.

I would also contend that the notion of Millennials being a “renter generation” is nonsense. In a National Association of Realtors survey, 75 percent of them said that buying a home would be the most astute financial decision they’d ever make; however, 80 percent said they don’t think they could qualify for a mortgage. I do believe that Millennials will eventually buy, but they’re delaying their purchasing decisions by about three years when compared to previous generations, which is about the same amount of time they’re waiting to start families as well.

Mortgage rates have risen rapidly since the election, and unfortunately, I do not see a turnaround in this trend. That said, they will remain cheap when compared to historic averages.  Expect to see the yield on 30-year mortgages rise to around 4.7% by the end of 2017. For those who have grown accustomed to interest rates being at historic lows, this might seem high, but it’s all relative.

If I were to gaze all the way into 2018, my crystal ball takes me to the dreaded “R” word. Like taxes and death, recessions are another one of those unwanted realities that inevitably comes to visit every so often. Irrespective of who was voted into the White House, my view remains the same: prepare to see a business cycle recession by the end of 2018, but, rest assured, it will not be driven by real estate, nor will it resemble the Great Recession in any way.

 

Posted January 11 2017, 11:30 AM PST by Matthew Gardner, Chief Economist, Windermere Real Estate

Posted on January 11, 2017 at 4:25 PM
Alysha Sherburne | Category: Articles, Housing Market

What’s In Store For The 2017 Seattle Housing Market?

 

2016 was another stellar year for the Seattle housing market, in which a surplus of buyers and a deficit of sellers drove home prices higher across the board. So, can we expect to see more of the same in 2017? Here are some of my thoughts on the Seattle/King County housing market for the coming year:

1.Our market has benefited greatly from very healthy job growth, driven in no small part by our thriving technology companies. Economic vitality is the backbone of housing demand, so we should continue to see healthy employment growth in 2017; however, not quite as robust as 2016. Migration to Seattle from other states will also continue in the coming year, putting further pressure on our housing market.

2. Are we building too many apartments?  The answer to this question is “maybe”. I believe we are fast approaching oversupply of apartments; however, this glut will only be seen in select sub-markets, such as South Lake Union and Capitol Hill. Developers have been adding apartments downtown at frantic rates with many projects garnering very impressive rents. In the coming year, look for rental rate growth to slow and for concessions to come back into play as we add several thousand more apartments to downtown Seattle.

3. The Millennials are here! And they are ready to buy. 2016 saw a significant increase in the number of Millennial buyers in Seattle, and I expect to see even more in 2017. The only problem will be whether Millennials will be able to find – or afford – anything to buy.

4. Home prices will continue to rise. But price growth will taper somewhat. The market has been on a tear since bottoming out in 2012, with median home prices up by a remarkable 79% from the 2012 low, and 14% above the pre-recession peak seen in 2007. Given the fact that interest rates are now likely to rise at a faster rate than previously forecasted, I believe price appreciation will slow somewhat, but values will still increase at rates that are well above the national average. Look for home prices to increase by an average of 7.5 – 8.5% in 2017.

5. More homes for sale? I am optimistic that inventory levels around Seattle will increase, but it still won’t be enough to meet continued high demand.

6. This is my biggest concern for the Seattle housing market. Home prices – specifically in areas with ready access to our job centers – are pulling way ahead of incomes, placing them out of reach for much of our population. This forces many buyers to move farther away from our job centers, putting additional stress on our limited infrastructure. We need to have an open discussion regarding zoning, as well as whether our state’s Growth Management Act is helping or hindering matters.

7. New Home Starts/Sales. As much as I would love to say that we can expect a substantial increase in new homes in 2017, I am afraid this is not the case. Historically high land prices, combined with ever increasing construction and labor costs, slow housing development, as the price of the end product is increasingly expensive. This applies to single family development as well as condominiums. We should see a couple of towers break ground in 2017, but that’s about all. Vertical construction is still prohibitively expensive and developers are concerned that there will not be sufficient demand for such an expensive end product.

8. Are we setting ourselves up for another housing crash? The simple answer to this question is no. While home price appreciation remains above the long-term average, and will continue to be so in 2017, credit requirements, down payments, and a growing economy will all act as protectors from a housing crash in Seattle.

 

Posted December 29 2016, 11:00 AM PST by Matthew Gardner, Chief Economist, Windermere Real Estate

 

Posted on January 4, 2017 at 3:25 PM
Alysha Sherburne | Category: Articles, Housing Market

Perspectives: 2017 Forecast

Well, it’s December; the time of year when we look to our crystal ball and offer our housing market predictions for the coming year. And by crystal ball we mean Windermere’s Chief Economist, Matthew Gardner, who has been travelling up and down the West Coast giving his annual forecast to a variety of real estate and financial organizations. Last month’s surprising election results have created some unknowns, but based on what we do know today, here are some thoughts on the current market and what you can expect to see in 2017.

HOUSING SUPPLY: In 2016 the laws of supply and demand were turned upside down in a majority of markets along the West Coast. Home sales and prices rose while listings remained anemic. In the coming year, there should be a modest increase in the number of homes for sale in most major West Coast markets, which should relieve some of the pressure.

FIRST-TIME BUYERS: We’re calling 2017 the year of the return of the first-time buyer. These buyers are crucial to achieving a more balanced housing market. While rising home prices and competition will act as a headwind to some first timers, the aforementioned modest uptick in housing inventory should help alleviate some of those challenges.

INTEREST RATES: Although interest rates remain remarkably low, they will likely rise as we move through 2017. Matthew Gardner tells us that he expects the 30-year fixed rate to increase to about 4.5 percent by year’s end. Yes, this is well above where interest rates are currently, but it’s still very low.

HOUSING AFFORDABILITY: This remains one of the biggest concerns for many West Coast cities. Some markets continue to see home prices escalating well above income growth. This is unsustainable over the long term, so we’re happy to report that the rate of home price appreciation will soften in some areas. This doesn’t mean prices will drop, but rather, the rate of growth will begin to slow.

Last but not least, we continue to hear concerns about an impending housing bubble. We sincerely believe these fears to be unfounded. While we expect price growth to slow in certain areas, anyone waiting for the floor to fall on housing prices is in for a long wait. Everything we’re seeing points towards a modest shift towards a more balanced market in the year ahead.

Posted December 12 2016, 9:00 AM PST by Jill Jacobi Wood, OB Jacobi & Geoff Wood

http://www.windermere.com/blogs/windermere/posts/perspectives-2017-forecast

Posted on December 15, 2016 at 2:10 PM
Alysha Sherburne | Category: Articles, Housing Market