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Slow real estate market puts pinch on sellers
For six months, Islander Maria Pottinger, a mother of four, worked feverishly to keep her house in tip-top shape, just in case a real estate agent dropped by with a potential buyer for the four-bedroom Cape Cod on Quartermaster Drive.
She and her husband Kevin lowered the price of their house twice — the second time by a full $50,000 — to try to trigger more interest.
Two weeks ago, the Pottingers succumbed to the reality of Vashon’s real estate market. Faced with growing inventories and few buyers, they took their home off the market.
“We decided to step back and reclaim our lives,” she said.
Welcome to the world of real estate on Vashon — where prices have fallen and inventory has grown in what real estate agents say is the first real downturn the Island has experienced in 15 to 20 years.
Buyers — especially first-time ones who can take advantage of new government incentives — can find bargains on Vashon. Sellers, meanwhile, are realizing that the usual strategies — fresh coats of paint, artful staging, even price reductions — may not be enough in this sluggish market. And some agents say it’s gotten tough for them financially.
“What we’re seeing is just a surprising reluctance by people to commit to buying,” said Marie Browne of Keller Williams Realty, which listed the Pottingers’ home. “And the reason it’s surprising is because it’s truly a great time to buy.”
It’s particularly frustrating for those agents who whave what they consider some great deals, like Jean Bosch and Leslie Ferriel of John L. Scott, who recently listed a small, well-kept home on Bank Road for $275,000 — a place Bosch says would have been snatched up only a year ago. Fewer than 10 people have even looked at the house since it was listed three months ago, Bosch said.
“I think it’s been getting slower and slower, quarter by quarter,” she said. Asked how she is faring as an agent, she added, “It’s very hard.”
Agents noted that some places continue to sell. Waterfront, for instance, still carries a certain cachet with buyers. Those who are particularly wealthy have made full-cash purchases of second houses, some agents report. And houses that have a one-of-a-kind charm — such as Marnie Jones’ church-turned-residence in Dockton, which sold earlier this week — continue to garner interest.
“If it’s not waterfront, there’s very limited traffic,” said Denise Katz, an agent with Windermere.
But some say the “correction,” as many call it, is good for Vashon, where home prices have climbed steadily over the last 15 years, sometimes escalating more than 20 percent in the course of a single year.
“We were pricing buyers out of the market, and things are adjusting now,” said Bill Chunn, owner of Vashon Island Realty. “It’s painful, but there’s a lot of good to be had in it.”
Numbers help to illustrate Vashon’s changing real estate picture.
According to statistics provided by Windermere, nearly 40 percent fewer homes sold in the first eight months of this year than in the first eight months of last year. By the end of last August, 107 homes had closed, with listings staying on the market an average of 58 days. By the end of August this year, 67 houses had been purchased, and the average length of time on the market was 94 days.
Prices have fallen, too, Windermere’s numbers show. The median price for a house sold in the first eight months of 2007 was $560,000, compared to a median price of $480,000 this year — a 14 percent drop. The average price, another way to crunch the statistics, shows a price drop of 8.7 percent.
What’s more, a growing number of sellers are responding to the downturn by cutting prices, Windermere statistics suggest. So far this year, there have been 227 price reductions, a 34 percent increase over the number of price reductions a year ago.
The situation on Vashon is not surprising, many note, in light of what’s happening around the country. Across the nation, thanks to a sub-prime mortgage fiasco that has forced thousands of homeowners into foreclosure and swallowed up major financial institutions in bad debt, the housing market has stalled, throwing the U.S. economy into a tailspin.
But even while Vashon’s situation mirrors the national picture, it’s not nearly as bad in the greater Seattle area as it is in other parts of the country, noted Beth de Groen, an agent with John L. Scott. The longtime agent, who started selling on Vashon in 1993, has sold two homes priced at more than $1 million this year, both of which were purchased by buyers who paid with cash.
“We look great compared to everyplace else,” she said, adding that the Raleigh/Durham/Chapel Hill area in North Carolina and the San Francisco region are also faring better than the rest of the country.
Even so, de Groen added, she’s never seen a year as sluggish as this one.
“There hasn’t been a fall like this in 15 years,” she said.
According to Ken Zaglin, owner of the John L. Scott office on Vashon, prices peaked last August and have fallen steadily since then. But the Island’s smaller number of sales and the special nature of Vashon — a place people move to largely because they want to rather than need to — make it hard to make many sweeping generalizations about the Island’s real estate picture, he said.
“There are always exceptions, because Vashon has so many atypical properties,” he said.
Sellers, of course, are feeling the brunt of the decline, and those who have found buyers say they count themselves lucky.
Jones, who purchased a small church in Dockton, named it Angels of the Sea and began running it as a small inn, just sold her place — after producers of a national show called “Sell This House” appeared at her doorstep and undertook a complete makeover. The show is scheduled to air on the A&E channel on Oct. 25. Ironically, she’s already found buyers, a Texas couple scheduled to close on the house Oct. 22.
Still, she believes the show made a difference — the staff spent three days there painting walls, changing light fixtures and bringing in new furniture — if only because “it divested me of my property,” she said.
“I felt that having it on their show would help it sell,” said Jones, who plans to move with her son and partner to a waterfront home in Burton. “What I didn’t realize was that the process of the makeover was just as important.”
No makeover artists have shown up at Kathryn True’s north-end home, which she and her husband want to sell so that they can move to Vashon town and have what she calls a “more pedestrian lifestyle.”
They put their 2,100-square-foot home on the market in August and have had four parties take a look since then.
Because they don’t need to sell and because they like their home and neighborhood, the listless market isn’t causing them to panic, she said. Still, she said, it’s hard to keep the house “real estate ready.”
“We do these furious cleaning sessions,” she said.