“Did I pay too much for my Sequim home in 2007?”  This is a question a client asked me today, and since it is relevant to so many Sequim homeowners right now, I think the answer is worthy of posting here.  This issue is important to sellers right now, but deep in this story is a huge lesson for buyers.  Since I act primarily as a buyer’s agent and never as a dual agent, this article could be the one of the most important articles a buyer will read on this real estate blog.

To answer the question of whether you over paid for your Sequim home, we need to look at the history and put your purchase in context.  I looked at the recorded Deed and it shows you closed on March X, 2007 at a price of $300,000.  That was the tail end of the boom years in real estate prices.  The year 2005 had the most sales in Sequim at the highest prices, and 2006 sales slowed down but prices did not begin to stall out until the impact of the real estate recession began to be felt in the spring and summer of 2007.  You purchased at the precise end of the bull market in real estate and at the beginning of the decline.

Sequim Home Value

But there’s another important aspect of valuing your Sequim home, even going back to when you purchased it.  Let’s look briefly at this property’s history.

It was built in 1983 at what was probably $55 per square foot or $67,000.  Land like this was selling for about $25,000 at that time.  With a few other costs, I would estimate that the owners had about $92,00 to $110,000 in this property and home.  In November of 1999, they sold it for $142,000.  Considering they held the home from 1983 to 1999, or 16 years, they had a very modest profit of roughly $30,000. 

From 1999 to 2005 Sequim saw the largest price appreciation of homes in our real estate history.  As I’ve said already, those prices did not start dropping significantly until 2007.  Some home prices dropped slightly in late 2006 and early 2007, but it was later when we began to see the cumulative effect of the nationwide real estate recession.

When you purchased your Sequim home in March of 2007, in my opinion, it would have increased in value substantially since 1999.  The price it sold for in 1999 was $116 per square foot.  At the peak of the market this home would have been worth, in my opinion, approximately $170 per square foot, and that is a generous number.  That would have been $207,000.  That would represent a 45% price appreciation from 1999 to 2007, only 8 years.  That’s a gigantic price appreciation.  Again, this is a 1983 home and it is very small, only 1,220 square feet, and only 2 bedrooms.  In 2007 you could buy a brand new 3 bedroom, 2 bath home in Sequim on one acre for $250,000.   (more…)

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A gloomy outlook of the housing market was forecast on June 10th, 2011 by Robert Shiller, known for his accurate predictions of the housing market crash before the real estate recession.  Schiller is the economist who co-founded the S&P/Case-Shiller index of U.S. home prices.  He said a further decline in property values of 10 percent to 25 percent in the next five years “wouldn’t surprise me at all.”

Housing Market Prediction for Sequim

How will this forecast or negative outlook on the national housing market play out in the Sequim real estate market on the Olympic Peninsula?  What is the real estate market going to do in the Sequim area in the next 12 months to 36 months?

First, the Sequim housing market must be differentiated from the national housing market.  I think we could all agree that the real estate market is dramatically different in major cities around the U.S.  The Las Vegas market is completely different than the Anchorage market, as the Houston market is different than the Denver market, as the Miami market is different than the San Bernadino market.  And Sequim is different than any of those markets.  National statistics are useful for some purposes, but not in accurately predicting what will happen in some specific markets like the Sequim housing market.

Second, we have a small inventory of homes for sale (800+), and retirees continue to buy homes here every single month of the year and have every month during this entire recession. There is much more stability in this small market with the attraction that Sequim has become for retirees around the country.  Even in this recession, people are retiring and moving to Sequim as they have been planning for many years.  (more…)

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New listing at 1573 Doe Run on Bell Hill in Sequim with a valley view, a mountain view, and a partial water view.  Priced to sell quick way below the original listing price.

Sequim real estate brought to you by eXp Realty and Chuck Marunde.

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Sequim is having a spring sale, and Sequim homes are selling.  So are Port Angeles homes (represented in these photos).  We have clearly had a significant boost in homes sales these past couple of months, and many homes were sold these past two weeks by me and other Realtors.  Retirees are making their move now that spring is here and because many feel interest rates are about to start going up gradually and are unlikely to come back down to these historical 30 year lows.

This three bedroom, two bath home was built in 1995, and is in nearly perfect condition inside and out.  It’s 1,700 square feet is amazingly efficient with an architectural plan that uniquely creates a kitchen and adjoining sitting area with a cozy setting.  It has vaulted ceilings, a master bathroom with a shower and a deep bathtub, and a garage with a 12 or 13 foot ceiling.

The landscaping is gorgeous around this home even though the home has been vacant.  It’s great when a home is well maintained during the listing period.

I represented the buyers, and they are very very pleased.  Oh, the price?  Try $232,000.  This is unusual, so don’t get your hopes up that you’ll find a Sequim home just like this.  Photos by yours truly.

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Sequim homes are getting a lot of showings lately.  Buyers are arriving from around the country and looking for their retirement home.  I wrote about this some months ago, and it happens every spring in Sequim.  Of course, all of us were watching carefully to see how this recession would effect the buying market here, and the good news for sellers is that people are still retiring in Sequim from all over the country.

I’m very busy working with buyers, all of them from outside the area.  One of my listings sold last month, another one of my listings sold last week, and I sold a lot last month and another house this week.  All of these buyers are retiring to this area.   I also received an offer today (for an amount I cannot disclose at this time) on a listing I have on a custom built home on five acres fenced for horses with a  private trail to the beach.

What are the price ranges with these sales?  $229,000, $395,000, $100,000, and $232,000.  The undisclosed sale is just under $399,000.

It is apparent that buyers are making their move now in these spring months and not waiting for the  economy and  the real estate market to prove that the recovery is already here.  Of course, the self-fulfilling prophesy with the belief that we are in a recovery may itself spur the recovery.

Many of my buyer clients are telling me they are simply not going to put their lives on hold anymore and wait for certainty before they make their move.  They have been planning to move to Sequim for a long time, and they understand that interest rates are going to go up at some point, and they are telling me, “We aren’t getting any younger.”

Whatever reasons buyers have for moving to Sequim to buy their retirement homes, I am pleased that so many are choosing to work with me as their Sequim buyer’s agent.  I am grateful for the privilege of helping clients with such an important decision.

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