Sequim is in a bifurcated real estate market, and we are seeing a similar pattern in other parts of the country, including California. In March I wrote an article about the bifurcated real estate market and the effect for buyers, “The effect this is having for retirees moving to Sequim is two fold. First, some are not able to find their perfect home in the Sequim home inventory, and second, prices are more competitive in this segment of the inventory. Many listings in Sequim in this bifurcated segment are selling at full listing price.” [Read Bifurcated Real Estate Market in Sequim.]
Bifurcated Real Estate Market in California
The Sequim market is partly a function of the California real estate market (and many other markets), and even California has been experiencing a bifurcated real estate market. “California’s housing market continues to be bifurcated both geographically and demographically, with the San Francisco Bay Area and high-end housing markets outperforming other regions and market segments,” said California Association of Realtors chief economist Leslie Appleton-Young. “A strong job market and barriers to building new housing are creating an imbalance between supply and demand in some housing markets. Buyers who are not impacted by affordability issues are fueling sales in the high-end market, which is putting upward pressure on home prices.” [Source: Housingwire]
What Does This Bifurcated Real Estate Market Mean?
It means that the market is not yet in balance. Sequim home builders have not been building new homes for seven years, yet buyers have been slowly picking off the best homes in the best areas for seven years. So the imbalance is real, especially in a small real estate market like Sequim’s. The law of supply and demand will eventually push prices of the existing inventory upward until we do have balance, at which time the price of an existing home will once again be nearly equivalent to the cost of buying and developing a lot and building a new home.
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