Well, I did it again. Last night we reprised the presentation made late last year about real estate and affordability trends on Whidbey Island. I say ‘we’ because if there wasn’t a library to host it or an audience that asked questions it would only be me talking to an empty room. That would be silly. As in many places around Seattle, along the coast, and across the planet housing has become an issue for everyone from serious investors to individuals fortunate enough to afford a house to the homeless and near-homeless. Through in economy concerns and create a topic worthy of lots of discussions, and occasional updates.
For that previous presentation, as well as a fuller narrative and a link to the video, go to ‘Is Whidbey Changing‘ (the edition that was named before I realized this could be a recurring title.) (Also: Curses to the clash between Google and Microsoft that kept the event from being livestreamed. Maybe next time.)
That presentation was updated with new data, which filled in the winter season and answered some of the anxious questions asked late last fall. For those who like data, slides, and the ability to review them for themselves, here’s the most recent presentation.
Here are several of the insights about the changes.
- The comparison between automated estimates continues: Zillow, Redfin, RealAVM, and ValueMap. If the person with two watches doesn’t know what time it is (back from the times when watches were mechanical and had errors), then having four makes things better and worse. Only having one answer can create a false confidence. Asking for several opinions is harder and requires critical judgment, but is also more valuable. (Imagine if the world ran that way.) I use the example of the estimated price of my 868 square foot house that was a view. Four different algorithms (probably) developed by four sets of mathematicians and four answers for one house. At one point the differences were about $74,000, or about 25%. Another implication is that, if I trusted Zillow’s estimate, my house’s value went up by more than two year’s living expenses in less than three months. Yeehaw! At that rate I can retire in about thirty months! But, one house is not representative, which is why the rest of the presentation uses statistics based on existing home sales, not estimates.
- One of the anxious aspects from last year was whether a Seattle slump was damaging Whidbey Island home prices. The island’s trend did quiet a bit, but managed to climb. Arguably, Whidbey Island’s real estate market was harder hit by the winter weather, and yet it continued. That suggests the market isn’t as fickle or fragile as the worst worries suggested.
- Prices are affected by supply and demand. North and Central Whidbey reached record low inventories. South Whidbey was aimed at the same, but bounced up just enough to miss making the record island-wide.
- The seasonal variation in houses for sale continues its bouncy downward trend, but has to change eventually. The market can’t have a negative number for the number of houses for sale. When Seattle was in a similar situation, the prices began to climb dramatically. In so many ways Whidbey Island is not Seattle, but the markets may – may – act similarly.
- The price distribution of the number of houses for sale continues to show a dramatic reduction from several years ago. The biggest drop continues to be in the sub-$300,000 houses. On a percentage basis, that means South Whidbey has about twenty houses over a $1,000,000 (about 20% of the market) and only about ten below $300,000.
- North Whidbey’s market actually picked up speed with Days on Market dropping below 20 days.
- Similar when looked at as Months of Supply.
- The Price per Square Foot trends across the island show all are rising, with South Whidbey leading the way, which may be a consequence of its greater supply of million-dollar homes.
- A new bit of data focused on ‘downtown’ Langley where Price per Square Foot started rising two years ago, distancing itself from the rest of the island, and its zip code. ‘Downtown’ Langley may be experiencing its global awareness heightened by tourism marketing.
- For the last few months, the rest of South Whidbey didn’t see much change in the Median Sale Price. While Central Whidbey had a drop, it was only after a surge that put it higher than North Whidbey. That may be caused by Central Whidbey’s smaller inventory where a few sales can dramatically shift numbers.
- Whidbey maintains it ‘most affordable’ status when compared to San Juan, Vashon, and Bainbridge despite Bainbridge’s slight drop.
- Seattle’s price drop is apparent, but small in comparison to where it was. Everywhere else was relatively flat or slowly climbing despite the news.
- In regional supply, Seattle’s surge is so large that the uptick is larger than the entire Whidbey Island market. That extra supply in King County may mean less demand for Island County.
- As for Seattle relative to the Pacific Rim, it isn’t the cheapest, but it’s down there. So, even as we recognize its unaffordability, globally it can look very affordable.
- The following charts on Whidbey Island’s demographics, affordability, and vacancy rates haven’t changed. Basically, the island is getting older, earning enough money on the island to live on the island is getting tougher, and county and particularly South Whidbey have a very large number of vacant homes. The island also has a sad and developing homeless situation: people who aren’t just statistics, but are people who can’t afford housing even if they have a full-time job. No one is a statistic, but together we become one. Odd?
- Another new bit of news comes from various cities that also face high vacancy rates and low available inventories. It is becoming common that cities charge taxes, like an extra percent of taxable value, for homes that aren’t lived in regularly. The details differ by city, but the situation and intent are the same. They may demonstrate at least one way to fund affordable housing.
During and after the talk there were several good questions. I don’t claim to know everything so I will admit to being human and having to point at other humans for those answers. When in doubt, talk to the County about official stuff. For some items, we can all guess but not know because of privacy concerns or because the analyses would require significant resources. Other brokers, bankers, and basically the rest of the community all have something to add.
One item that is easy to pass along is the influence of waterfront properties on the Median Sales Price. Surely with so many waterfront homes and their significantly higher price per square feet they’d significantly shift the overall numbers.
Waterfront properties do have significantly higher Price per Square Foot ($356 for waterfront versus $201 for the rest) and significantly higher Median Sales Price ($605 versus $320, respectively) but they only represent ~15% of the market (88 out of 572 houses).
There are many more topics to discuss. Two more opportunities are scheduled: Freeland Library on April 23 at 2PM, and Coupeville Library on May 4 at 10AM, each with its own emphasis. By the way, I applaud the island libraries for hosting these free discussions. Housing, affordability, and sustainability are important issues as the island and the region changes. I look forward to giving similar presentations, or answering specific questions from individuals. As I said above, I don’t have all the answers, but I might be able to help.
Stay tuned. This story has been going on for decades and has no reason to stop.
I’m happy to help.