Are real estate prices in the Sequim area at or near a bottom, and if so when will real estate prices start to increase? What kind of appreciation can we expect in Sequim? These are questions that buyers have been asking me as they plan to buy their retirement homes in or around Sequim. Most buyers are not concerned about whether they are buying precisely at the bottom of the market, because either this is the last home they will buy or they will live in it for 15 years or longer, so the bigger concern is appreciation.
Real Estate Prices at the Bottom?
We have a combination of unique circumstances affecting Sequim real estate prices right now, and for buyers it is the perfect scenario that we are not likely to see again. Let me explain. The Sequim real estate market is a small market, and prices move slowly and react slowly to economic forces like supply and demand. While prices have gone up substantially in many hot real estate markets around the country, especially in southern California, prices have not gone up commensurately in Sequim, and they should have simply based on the economic fundamentals of supply and demand.
One of my buyers sold their home the first weekend they put it on the market in California, and they said real estate prices had increased 25% in the past six months in their market. They paid cash for a home in Sequim. Another buyer told me they had 34 bids on their California home, all above the listed price. I sold them a home in Sequim too, all cash. Sales in Sequim this calendar year have eclipsed sales in any year over the past seven years of the recession, yet prices in Sequim have not moved up the price curve. At least not yet, but that will change soon.
Real Estate Prices and Appreciation
Retirees moving to Sequim tend to have the same preferences, and they have been competing to buy homes in that small segment of this market. That means the supply of homes in that small segment has been shrinking. [Read The Sequim Real Estate Market is Bifurcated.] Since prices elsewhere have been increasing, more buyers have been arriving in Sequim to buy homes. It is a very simple supply and demand equation that insists that prices increase. But they have not gone up yet. When they do start to go up, it will be a very noticeable increase at first, and then beyond that a steady 3% per year appreciation in real estate prices. Just like the stock market jumps 5% when everyone finally realizes we are in recovery, real estate prices in Sequim will jump a little when prices finally respond to supply and demand.
What does all this mean? It means that Sequim real estate prices are still dragging the bottom, but they are about to start increasing for the first time in seven years of depression. Exactly when will prices start to increase? I cannot say, but my guess is that it will happen in the next 12 months, perhaps after the turn of the new year or in the spring. Mark you calendar and watch the Sequim inventory for homes you like, and watch Sequim real estate prices. But if you intend to buy your retirement home here in the next few years, I think I would do what I could to buy earlier rather than later. Later will cost much more, at least in my humble opinion. That’s my take on Sequim real estate prices.
I recommend our Sequim Real Estate Market Reports.
Last Updated on June 6, 2024 by Chuck Marunde
