The market is up! The market is down. Both are right, but I’ll get to that. The sad reality is that, despite Island County’s progress to re-opening (we’re in Phase Three!) the pandemic continues, and Whidbey has seen an increase in the number of cases, with fortunately no deaths. (Evidently, most or all of the folks infected caught the virus somewhere else and brought it to the island. Keep those masks on, eh?) Fear is too common when there’s something to fear, but that doesn’t mean fear everything. The short answer is, Whidbey Island real estate prices are up about 5% since the beginning of 2020 (arguably the start of the pandemic response.) The slightly longer answer is that increase may be because of a decrease in supply (down ~ 20%.) The much longer answer follows.
For the last couple of years, some of the local libraries have been generous enough to host semi-annual presentations about real estate and affordability trends on Whidbey Island. I’m a licensed real estate broker (Coldwell Banker 360 Team) so I have access to the data. That means I can present what’s happened rather than only what the market feels like. Data and anecdotes can agree, but data are less subjective. The next presentation wasn’t due until the autumn, but I’ve received enough requests for an interim report because of the pandemic. There’s evidence of fear, but there’s also evidence of action.
For those who want to skip to the data and my presentation here are a couple of links. Like I said above, these are the much longer answers.
Presentation slides (62 slides): Whidbey Real Estate and Pandemic News – Summer 2020
YouTube video (~52 minutes): Whidbey Real Estate and Pandemic News – Summer 2020
These presentations are updated versions of the previous one, though with less of an emphasis on affordability. Affordability is too dynamic to track as the economy bounces with old upsets from trade wars and Boeing crises, and new upsets from the virus and the rippling repercussions of job losses and work from home orders. Hopefully, the affordability picture will be clearer in a few months. Currently, affordability is even more individualistic than before. While the term ‘affordability’ frequently is a label for what can be purchased by people with minimum wage jobs, there’s an aspect of affordability that is reflected in the other end of the market. Someone who buys a million dollar property with cash was able to afford it. It is a different connotation, but one that may come to play as people move in response to the crisis.
As I said above, the short answer is that prices are up. That varies across the island. Houses with a Langley address that aren’t in downtown Langley are part of a market that spiked over 10% since the beginning of the year. With an overall average of 5% for the island, that also means some areas were down; e.g. Clinton down 5% though after a late 2019 ramp up.
At the same time, the market is down ~20% – in terms of inventory. For the last several years, the number of homes for sale has dropped, but with a seasonal rebound into summer. Just as the inventory was rebounding, the Stay Home orders were issued and the County set the stage at Phase 1 of 4. Now, instead of the rebound, the number of homes for sale is at or below winter norms. Two things have therefore combined: the long term decrease and a short term interruption in the typical temporary relief.
Simplistic economics suggest that decreased supply with no change in demand can lead to increased prices. That alone may explain the price rises. And, if demand increases…
Step into some anecdotes, because they do have some value when data are absent. Around the world, at least some who are interested and can afford it are retreating from the recent urbanization trend. While downtown living has plenty of attractions, prolonged sharing of hallways, elevators, and laundries aren’t as appealing. The ability to have some room between each house, maybe with room to grow your own greens, is appealing. Hence, enough people are recognizing the value of a more rural lifestyle that rural prices are up. Check the prior post on Rural Distancing for some numeric comparisons. The data don’t prove causation, but while Whidbey’s prices are up, Seattle’s are down.
The effect distant cities have on remote rural areas is easy to overlook. Rhetorically, how many people in Ballard really want to move to Greenbank? There’s no data I’m aware of. But. As I type this post, there are only 132 houses for sale on Whidbey Island. That’s more typical of a low number for the summer market on the south third of the island. For Greenbank and south, there are only 56 houses for sale. That 132 is small for the island’s population of approximately 80,000. (Looking forward to census data.) The 80,000 are important, but they can easily be overwhelmed by the regional population of over 4,000,000. If 0.1% of the mainland population decided to move to rural areas, that’s 4,000 people. The number per household differs, and there are other rural areas to pick from, but it is easy to imagine 132 of them being interested in Whidbey Island. And that’s just the Seattle potential. Whidbey Island is known around the world. Calls to real estate brokers come in from far farther than just the city down the Sound.
Supply is down. Demand may rise. It is doubtful that prices will stand still.
By the way, of those 132 houses, 23 are listed at over a million dollars, most of them are south of Greenbank. There are only 9 under the US median house price of ~$200,000; and only 60 under $500,000. Affordability gets redefined.
These are dynamic times. (Understatement!) Whidbey Island is in Phase 3, which is also appealing to some living elsewhere in Phase 1. The longer other areas are in Phase 1, the more appealing Whidbey Island may be. But, we could retreat to Phase 2, in which case there’s reason to move now rather than later, which may increase urgency and therefore demand.
The news changes daily. These updates are arbitrarily quarterly or semi-annually. If you need newer information, contact your broker. In the meantime, I hope this data and set of presentations helps. Contact me or leave a comment if you have questions.
Here’s hoping we get to conduct the next presentation in-person in the libraries, but realistically probably still behind masks.