Whidbey Island Real Estate Condition - Where it Was, Where it Is, and Where it is Headed.

The residential housing marketplace here on Whidbey continues to present a challenging environment. Home sales are still occurring although their number is down considerably from recent peak years. Based upon data provided by the Northwest Multiple Listing Service, 2005 was the peak year for home sales when 1,635 homes sold.

For the prior 12 months ending May 31, 2010 there were 750 home sales reported on the Island. On the basis of home sales activity it would appear that the local housing market bottomed out this past winter. On a 12 month moving average basis, the number of home sales has been slowly rising each month since that time.

In contrast, home prices appear to be still in a state of fluctuation. Some months the reported average sale price (on a 12 month moving average basis) is up a tad; other months it is down slightly. This is probably an indication that prices are stabilizing. It appears that the better properties are selling more quickly and for the most money. Such properties are those that have the best locations and/or are improved with homes that are in good, well-maintained condition, with contemporary floorplans and, of course, fairly priced. On the other hand, the properties having poor locations and/or homes with significant functional obsolescence or that are in poor condition are suffering the most.

It appears that as we go into the summer selling season that the inventory of available homes for sale is rising. The number of foreclosures and bank-owned homes that are competing for buyers will need to dissipate before there can be return to normalcy. Another concern is what impact will the expiration of the $8,000.00 federal tax credit program have on the local housing market.

This continues to be buyers market and will likely remain so for the foreseeable future.

Written by Gregor M. Strohm, ASA