Real estate market remains soft on Vashon

Though real estate activity has picked up in the last month, Vashon-based real estate agents remain braced for another tough year.

According to the latest statistics, the number of sales in 2008 represented a 60 percent drop from the high-water mark of 2005, and this year, agents expect even fewer transactions.

In 2005, 211 houses sold. Last year, there were 83. Based on sales in the first six months of 2009, Ken Zaglin, owner of the John L. Scott office on Vashon, expects transactions to number around 70 by the end of this year.

“A few markets are starting to show a resurgence,” he said, noting Bellevue as one of them. “But on Vashon, which often lags, ... the market is still showing a modest decline.”

As a result, house prices remain soft, agents say.

The median sales price for the first six months of 2009 was $412,500, according to statistics supplied by Dick Bianchi, owner of the Windermere office on Vashon. For the first six months of 2008, the median price was $460,000. And in the first six months of 2007, the median sales price on Vashon was $522,000, his statistics show.

Indeed, the only segment that has shown much activity so far this year is the $350,000 to $400,000 category; 13 houses in that price range have sold in 2009. Only seven houses have sold for more than $600,000, and of those, only one logged in above $1 million.

“There are a lot of bargains,” said agent Emma Amiad. “Unfortunately, there aren’t a lot of buyers.”

Those who are in the market, however, say it’s been a pleasant experience, enabling them to either find a home quickly and easily or take their time and search for exactly what they want.

“We got a beautiful home and property — almost three acres. It’s absolutely gorgeous. The home was move-in ready. And we got a great deal on it,” said Mitzi Galus, who bought a house with her husband Robert on Vermontville Road earlier this year.

Donna McDermott, who is both selling a home on the Island and buying another, said she and her partner have likely looked at every single house on the market in their price range. It’s been a fun experience, she said.

“There are some beautiful homes out there — and a lot of second homes on the beach that have not been available before. I think the prices are amazing,” she said.

But being both a seller and a buyer, she’s seen both sides of the market, she said. As sellers, she and her partner had to take a considerable loss on the house they’ve owned for four years; as buyers, the couple — who have what McDermott calls “the farmer itch” — have been able to find the ideal property, with a wonderful barn. “It’s animal ready,” she said.

But some agents say they’re encouraged by the activity of just the last month, when 11 houses went into contract.

“For sellers, that’s a pretty nice indicator that the buyers are active,” said Jean Bosch, an agent with John L. Scott.

What’s more, Bosch, an advocate for affordable housing, said she’s actually encouraged by the lower prices — a trend that might make it possible for middle-income families to purchase homes on the Island again.

“We’re getting down to actual affordability here,” she said.

Other agents said the housing prices are such that the market could begin to attract investors again. For the first time in a while, they note, an investor can buy a house and rent it at a rate that covers the mortgage.

“It’s unheard of to buy a house on Vashon that cash-flows,” said Marie Browne, co-owner of the Keller Williams real estate office on Vashon.

Sellers who are motivated are realizing that they need to bring their prices down, she added, noting that a house she initially listed at $599,000 has come down to $315,000. “That’s like a steal price,” she said.

Even so, many, especially first-time buyers, remain hesitant and cautious, she said.

“People still have a lot of fear — and not unfounded fear — about the ability to pay a mortgage,” she said.

McDermott agreed that buyers need to be thoughtful in the current market. At the same time, she said, those who are looking to buy need to realize it’s a different kind of market on Vashon, with unusual houses that appeal to different kinds of people and that, as a result, might not sell quickly.

“Some think that because the house has been on the market for a while, there’s something wrong with it, and that’s just not true,” she said.

“Homes on Vashon are really personal. The right person just hasn’t walked through the door. ... You can really miss the house of your dreams if you look at it like someone buying a piece of property in L.A.”

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