Looking for a house to buy on Vashon?
Last week, two new property listings came on the market and were sold within days, leaving only four abodes left for buyers to consider — all of them priced at close to or more than $1 million each.
One of the four remaining choices is a brand new listing for a 6-acre parcel containing an older house and double-wide manufactured home, described as “fixers,” with a price tag of $1.1 million.
It is the latest offering from the corporate owner of the sprawling Misty Isle Farms estate, who has been selling the estate off in pieces throughout 2021.
What’s happening in Vashon’s white-hot seller’s market? The Beachcomber spoke with six local realtors, as well as the executive director of Vashon’s affordable housing nonprofit, to find some answers.
All described a time unlike anything they have ever before experienced, and all expressed concerns about how that market will affect Vashon as a community, going forward.
Pandemic-related trends seen throughout the region and in many metropolitan areas in the United States, these local experts said, have accelerated locally in 2021, altering the landscape of the housing market on Vashon and making it much less affordable for those without deep pockets.
Homebuyers and renters, some said, may not see much relief from these trends any time soon.
Chris Szala, executive director of Vashon HouseHold, said that the affordable housing units his organization offers are full, “with 50-deep” waitlists.
“We did have more turnover during COVID as people in many cases lost jobs and moved back to their original home state — Montana, Texas, Oregon,” he said. “Those spaces were taken up quickly by people who work on-island, so we are quite happy about that.”
Still, he said more affordable housing is urgently needed on Vashon.
“People fear density on the island, but the reality is that we could use about 80 units in the downtown area to help stabilize our workforce on-island,” he said. “Without it, the long-term prospect is not good. Either businesses start to close or prices go up so that those of us in what is called the ‘middle class’ will not be able to afford to stay on the island either. It gets to be a bit of a downward spiral.”
Lagging supply meets surging demand
Sophia de Groen Stendahl, an owner and broker with Windermere Vashon, said that in 2021, local price increases were fueled by many factors felt nationwide, including millennials entering the housing market and a significant slowdown in home building due to the pandemic.
In a fourth-quarter report for her company, she noted the national pandemic trend of city-dwellers relocating to outlying areas due to their ability to work remotely.
At the same time, she said, some islanders who might have otherwise listed their homes for sale, in more ordinary times, did not do so in 2021, due to the lack of inventory of houses for them to move to.
Windermere owner and managing broker Beth de Groen, who works with her daughter Sophia, said that in the past, her firm had worked with many local sellers who were downsizing and wanting to move to smaller houses.
The pandemic — which she said she expects to “be around in some form or fashion for at least another year” — has changed the way islanders make decisions about relocating.
“Those people are staying where they are,” she said.
Islander Leslie Ferriel, whose real estate license now hangs at the John L. Scott’s Westwood Village office, explained that the same desirability factors that have compelled people to want to move to Vashon have also kept current homeowners and residents in place here.
“Who is going to sell their house on Vashon?” she asked. “There aren’t many people hankering to leave.”
All of this, said Windermere designated broker, Denise Katz, has led to a local housing market where supply is greatly outpaced by demand, causing not only fierce competition but also dramatically rising prices.
Katz detailed the situation by the numbers: In 2021, 173 homes sold on Vashon, and of those, 53 sold for $1 million or more — accounting for 31% of sales. The median price for a house on Vashon is now $835,000, up from $696,000 in 2020 — a 20% increase.
What’s more, said Compass realtor Connie Sorensen, ten homes on Vashon sold for more than $2 million in 2021 — double the number sold in 2020 in that price category.
“What we’re seeing is just a huge push on the upper-end prices … partly driven by the fact that we are an island and have a lot of waterfront,” she said.
Ken Zaglin, owner and designated broker of John L. Scott Vashon, defined the current market as “historic” for local sellers. But many potential homebuyers, he said, had a very difficult year.
The pace of sales has become almost instantaneous, he said, with many houses selling almost immediately after they have been listed — leading to a sense of shortage on the market — even though the 176 homes that sold in 2021 were within the range of a normal year for Vashon.
Zaglin also said that a larger percentage of sales on Vashon are now cash sales — disadvantageous to those who need to finance a home purchase.
Other realtors said that many homes were still being financed, even by affluent buyers, due to current low-interest rates. Financing contingencies in offers, however, were no longer common, they said.
According to Zaglin, the market has been emotionally bruising for “normal, working-class” buyers who find themselves competing with affluent buyers — and that agents who represent these buyers have never worked harder.
He said some agents have written as many as 10 to 14 offers for these kinds of buyers, only to see them lose out, time and again, to buyers with vastly more resources.
Stendahl said she had helped people of more limited means to purchase homes, but the current market requires buyers to be savvy, seek expert advice, and carefully consider their strategies.
“Everyone needs to rethink what their expectations are,” she said, adding that she too was worried about the lack of rental options on Vashon.
Some buyers, said both Zaglin and de Groen, have availed themselves of new financing options which essentially allow buyers to make what seems like cash offers on houses.
One local mortgage consultant, Patte Wagner, who works at Evergreen Home Loans, described her company’s CashUp program, which is designed to help buyers submit a cash offer to purchases homes in competitive markets.
Once a qualified borrower with 10% or more down has been fully approved, Evergreen will advance the cash for the sale — allowing the seller to get paid in “all cash” — and then transfer the home to the borrower once their loan closes, generally within 7 to 30 days.
Those seeking more information on the program should contact Wagner at email@example.com or visit evergreenhomeloans.com.
Who are the buyers?
All the realtors interviewed described a mix of buyers, with some coming from other communities in the Northwest region but also states including Texas, California, and New York. Some buyers were already islanders, they said.
International investors, whose high-dollar purchases have roiled markets in larger cities, have not been a factor on Vashon, said several realtors.
However, Seattle’s home market, currently ranked as number eight for the highest home price and sales growth in the U.S. by the National Association of Realtors, has enabled many to navigate and finance a move to Vashon.
The lion’s share of recent buyers on Vashon, said de Groen, are Seattleites and people from the East Side and Mercer Island, who have taken advantage of the opportunity to sell their homes in those communities for excellent prices.
What’s the forecast?
Higher interest rates and inflation could have an effect on Vashon’s current market, some realtors said, with the caveat that these factors would likely not affect the highest-end buyers. And continued low inventory, all said, would keep demand high.
Zaglin expressed hope for an eventual softening of the market, as employers required workers to return to their offices. Ferry dependency, he said, has always served to limit growth on Vashon.
Still, he said, he was not expecting the market to change demonstratively in the near-term, but rather, there would be a slow return to a time when more people would have a “shot at purchasing and living on the island.”
Sorensen, of Compass Realty, said that she was looking out for buyer fatigue.
“Where do buyers stamp their feet and say ‘enough is enough?’” she asked.
Still, she predicted, sales would be steady in 2022, with prices continuing to increase along with demand.
Stendahl put it a different way, referring to Vashon’s current dearth of listings.
“We’re already seeing a shortage,” she said. “That doesn’t make me feel like 2022 will be a breath of fresh air where we’ll get more balance.”
Ferriel, who serves on the board of Vashon HouseHold, projected much the same scenario but added another hope for Vashon.
“Inventory is going to stay low, interest rates might affect the lower end of the market, and we need affordable housing — let’s build it in the town,” she said.