Local home prices drop in March

March saw a drop in Anacortes home prices as well as a drop in number of homes sold. But, lower mortgage rates have more prospective first-time buyers out house hunting.

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Quagmire is a word that comes to mind when I’m asked about the real estate market in Anacortes. According to Webster, “A difficult or precarious situation; a  predicament.” This may be if you’re an over-extended seller, but for buyers it  means softer prices and more room to negotiate.

The median price for homes sold in Anacortes in March was $310,000, down about $30,000 from March of 2008, when the media price was $340,500. That’s an 8.8% drop. This percentage may be artificially high due to the small number of sales and some of those sales being bank foreclosures.

Fourteen homes were sold in March, a month when the number of sales is traditionally low. A year earlier saw 21 homes sold in Anacortes. The “for sale” numbers are up; there are more than 272 homes currently listed for sale in Anacortes, about a dozen more than a year ago.

Fortunately, lending rates have softened once again and we are seeing conventional loans down just below 5%. This is a first. Contrary to public belief, the loans we’ve seen below 5% were bought down either by the buyer or the seller.

The good news is, the market is moving briskly in the below $250,000 price range, while the range from $250,000 to $300,000 is also seeing activity. This is first-time buyer territory. The lenders did a big push late last year, getting the word out on the value of FHA loans. A buyer can put as little as 3% down on loans up to $410,000.

First-time buyers are making moves now that they’re eligible for an $8,000 tax credit which doesn’t need to be repaid. Other than first-timers, however, buyers are extremely scarce.

We are still not seeing the investors and move-up buyers are still sitting on their hands. The typical flood of retirees have had to return to work, I’m afraid. And if they show up looking, they are bargain hunting.

But it is early in the year. The Anacortes market is typically just waking up in April, a few more days of blue ink in the stock market and things could start to get back to a normal market. But don’t expect prices to jump back to 2005 levels. That bubble has lost its air, sale prices are up from 2004, just about where they should be at the normal 5 to 6% per year progression.