Whidbey Pacific Realty
Whidbey Pacific Realty
PO Box 131, 11042 SR 525
Clinton, WA 98236
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Island Economics, Demography, Real Estate and Government
Regional real estate economic patterns that will influence Whidbey Island during 2005 will emulate last year's - following the pattern begun in 1989. While we predict that new homes sales will decline somewaht from last year, total home sales should almost reach last years' record. For the nation as a whole, the year will have strengthening, modest (but quite robust) economic growth following continuing declines in unemployment. Some year-end employment increases were partially responsible for the stronger than might have been predicted election results in November. Although there is still substantial "healing" going on as a result of the impact of "911"; 2005 will see impressive "productivity" improvements, continuing low inflation, rising total employment with corporate earnings mostly higher, but varying from terrific to terrible. The corporate profits that topped out about three years ago, coincident with historically high price-earnings ratios, have returned with a vengeance. Expect corporate profits to be much improved. The securities market has gained some strength as a consequence. The stock market is still extremely volatile, but much less so than the past three years!
Mortgage and other interest rates continue their now almost fifty-year decline. Home loan rates rose briefly in 2000 on inflationary fears, but have since dropped to below seven percent. We predict that these low rates will continue at least through this year.
The Pacific Northwest, and especially Washington State, continues, despite high unemployment rates and the massive "deconstructing" going on at Boeing, to be a "hot spot" for both business and real estate. Considerable "downsizing" has already ocurred within the dot-com community and among some other "high tech" industries; however, there is still a shortage of skilled, regional, technical workers. The local dot-coms have been hit very hard as exuberance finally yields to reality. Many "wireless" and telecommunication companies are beginning to do well again. As always, the deck chairs are being rearranged though there is still enormous entreprenurial energy in the Pacific Northwest.
Real estate in most of Puget Sound is selling at record prices, though at rates less than the halcyon days of 1998-1999. Seattle, Bellevue and Redmond now average home prices near national records. Housing "affordability" has become a serious challenge in Puget Sound. On Whidbey real estate prices continue to rise. We too face "affordability" problems, however, for those arriving from places other than the Midwest or most of the South, we have prices that, while not "cheap", are affordable for most new residents. North Whidbey has a solid new construction housing base, affordable by Puget Sound standards. Unfortunately, we have little low-priced housing on South Whidbey, requiring that some who would choose to live there are finding they must buy further north on Whidbey where housing costs are lower. There is still a wide variety of lots and acreages for those who choose to build. Even waterfront is available - for those willing to pay the price. Tourism is fairly strong here, but travel and related industries remain weak, while some local businesses struggle; many are doing very well indeed.
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Whidbey Island, located in northern Puget Sound continues to benefit from technology industry expansions, following a lot of agony over "telecoms" and "dot.coms" employment contraction. The "mainland" areas of Mukilteo, Everett and Seattle have, during the last 15 years, attracted large numbers of "high technology" businesses. The Boeing Company's large-plane plant in Everett is struggling with sales, however, if it were totally independent, it would still be the largest airplane manufactury in the world. This activity combined with the attractive, casual lifestyle of the Pacific Northwest, makes Whidbey Island, only three miles away, an accessible place with still reasonable property values. In reality each year Boeing Everett has a smaller impact on Whidbey Island as fewer and fewer employees are needed to manufacture aircraft.
The traditional industries of Whidbey Island have been forestry and agriculture, but employment since the 1940's is government-related, with the U. S. Navy at Oak Harbor the largest single employer. In 2004, traditional industries employed a mere 2-percent of the total local labor force; government and public schools employed approximately 60 percent of "on-island" employment. North Whidbey has the only local economic base; this dominated by the activities of the Naval Air Station at Oak Harbor. Annual budgets of almost $300 million provide employment for about 9,000 military and civilian personnel. The internal economy of the island is weak, as most high-paying jobs require commuting to the "mainland" daily. Even the short 15-minute ferry ride is inconvenient for daily commuters; limiting future growth to an increasing proportion of retirees. All the above issues are described in more detail elsewhere on our site.
ISLAND REAL ESTATE.
Depending on the what part of the country you relocate from, real estate values will generally appear to be affordable. Currently, homes on North Whidbey average $247,500 (January 2005). On South Whidbey the average is $299,200. Land averages about $9,000 to $20,000 per acre based on our standard 5-acre zoning; more for view acreage, averaging $18,300 per acre. "Inexpensive" building lots have a median value of $43,000. Waterfront property can be very expensive - expect to pay more than $200,000 for good "Sound-frontage". Almost all properties, except those in parts of our three towns, require on-site septic disposal systems. Therefore, all unimproved land should be purchased "subject to perc" (meaning that the on-site soils are suitable for a septic system), to ensure that your property is buildable. Electric power rates are very low by national standards, and domestic water is generally abundant and extremely inexpensive. Property taxes here are the second lowest of any county in Washington State. Also, there is no state income tax; on either earned or unearned income. Sales taxes on non-food items funds most government activity. What we do offer is mild, Pacific Northwest weather, "rural" settings, a virtually crime-free environment, and a green, pastoral quality of life not easily matched elsewhere.
The Island is part of the 10th state legislative district, with Coupeville the county seat. We have only three incorporated towns on the island: Oak Harbor (18,800 pop.), Coupeville (1,300 pop.) and Langley (1,000 pop.). The towns are governed by an elected mayor and city council. The county is governed directly by three Island County commissioners; one from each of three county districts. Total island populations are now 58,600; the "northern half" having about 41,100 and the "southern half" about 17,500. The average "household" income in 2003 was $46,200, island-wide. There are dramatic differences between the social characteristics of North Whidbey (with the dominance of the U. S. Navy) and South Whidbey. These differences are reflected in family income. We estimate that on South Whidbey "household" incomes are almost $80,000. Property taxes overall average .962 percent, but vary by jurisdiction; and the impact of school, parks and other bond issues.
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