2009 In Review

It's time for the annual review recapping what happened in Port Angeles real estate in 2009.

Trumpets, please. We had 2 more sales in 2009 than in 2008. Considering that there were 28% fewer homes sold in 2008 than in 2009, an increase of even 2 sales is positive.

There is no question that the 1st Time Home Buyer Tax Credit was a big factor in sales in the third and best quarter last year. $8000 of "free money" can motivate a lot of people.

One of the starkest statistics is what happened in the $500,000+ range. Last year there were 7 sales and the highest was $600,000. There were only 9 sales above $500,000 in 2008 but 4 were between $600-1,400,000.

So when you look at how much the median price has dropped since 2006-15%-the fact that there are simply very few sales in the upper tier is why, not just that prices are dropping.

In fact, prices have dropped  much more than 15%.

Comparing the purchase price of a house in 2005 or 2006 with its sale price in 2009 can make you weep.

If that house was part of a short sale, and the bank was not paid off in full, the decline was in the vicinity of 30%.

If that property had been foreclosed and was now bank owned, the price had fallen around 40%.

These are real numbers taken from real examples using actual properties that sold last year.

The toughest position in the market is for the discretionary seller, the one who wants to move or resize or make a lifestyle change but isn't in a financial bind. That seller is competing with short sales and bank owned properties, and these are priced below market.

But they become the market. These distressed properties establish a new, lower market.

With the improvements to the Home Buyer Tax Credit, there is reason to expect a decent spring market.  The enhanced program raises the income limits for 1st Time Buyers.

The tax credit expansion is aimed at those who have owned a principle residence for the last 5 years. They can qualify for $6500 in Tax Credit. There's no requirement to sell their existing home so this should whet the appetite of some.