Whidbey home sales slow down
July 3, 2008 · Updated 5:09 PM
"Home sales are down in Central and North Whidbey.According to an economic indicators study just published by the Greater Oak Harbor Chamber of Commerce, house sales in 1999 were down by 40.5 percent compared to 1998. The study also shows that the overall trend for single family home sales has been steadily downward since 1995. That's not news to most people with low to mid-priced houses on the market. Those sellers are now waiting an average of six months for an acceptable offer, instead of the average three months it took to sell 18 months or so ago, says Pat Harrison, last year's president of the Whidbey Island North Association of Realtors. I wouldn't agree with the 40 percent figure, Harrison said. It's still a good market. There are a lot of homes out there, although the low end has been slow for about a year and a half.Jodi Kittelson, real estate loan officer for Whidbey Island Bank in Oak Harbor, agrees that there is a slowdown. There are many more homes out there for sale and they're not moving like they have in the past.Loans are still readily available for those who qualify, Kittelson said, but a rise in interest rates may be part of the cause of slow sales.Rates were 7 1/4 percent six to eight months ago. They're 8 percent now. For some people that puts them out of being able to qualify for home ownership, Kittelson said. Home prices that are too high may also be part of the problem, she added. Current Association of Realtors president Terry Reynolds says she sold more homes in 1999 than 1998, but most were priced at $150,000 and above.It's an unusual market, she said. Usually, lower priced homes sell better. But people are renting instead. They're just not purchasing and I'm not sure why. It's been a trend for the last six months. It's a very strange market. Oak Harbor real estate appraiser Gregor Strohm, who helped to compile the figures for the economic indicators newsletter, says there is a dichotomy in the market that isn't seen very often. It's a buyers' market at the lower end of the scale and a sellers' market at the upper end.Strohm says that homes priced under $150,000 are harder to sell now principally because the interest rates have gone up. Interest rates that were at a low of 6 3/4 percent a couple of years ago, are around 8 1/2 percent now. That's almost 26 percent higher, which directly relates to your payments. The jump means that a family that could afford a $130,000 home at the lower interest rate can now afford to spend around $110,000, Strohm said. Properties haven't gone down in value, he said, and wages haven't kept pace with the higher repayments that go with higher interest rates. Prices have gotten ahead of what is affordable for a typical home buyer, he said. But over-building isn't the problem.According to the Chamber's economic indicators, 84 new homes were built in Oak Harbor in 1999, 23 fewer than in 1998, but five duplexes and 16 apartments were built in 1999, compared with only four units in 1998.That may have affected the number of rentals available, since the vacancy rate for rentals rose a little in 1999, but it is still not much over 5 percent.Other factors are hard to pin down, Harrison and Reynolds said, since loans are available, and there are plenty of homes on the market. Harrison thinks that first time buyers may be harder to please.Younger buyers want their dream home to be their first home, she said. They expect a nice home to start.She also believes that some people don't realize that they could buy a home for not much more than they are paying in rent. There are some real deals out there, Reynolds said. Some real nice homes at very affordable prices are just sitting there. I wish I knew why.------------------------------The North Whidbey Island Economic Indicators newsletter, which is published yearly, is available on request from the Greater Oak Harbor Chamber of Commerce. Call 675-3535."