Belfair, WA (PressExposure) July 05, 2011 -- Few banks in Western Washington are making construction loans. In this climate, it's hard for property owners to sell undeveloped land, regardless of its location, size or value.
A property owner on Olympic Peninsula's Pickering Passage has joined the trend to help finance his ten acres of Puget Sound waterfront land. He has agreed to carry an eight-year contract at 5% interest with only 10% down - reasonably typical in this area.
Even at today's bargain prices for Puget Sound waterfront, land like this is not selling without help from the seller in this current real estate market. When asked, local real estate broker Mike Mostyn said "This is what's happening with undeveloped land sales on the Puget Sound. Land owners have to help with financing to reduce builder's out-of-pocket costs before developers will get involved."
Historically, this is most unusual for the South Sound area. Land like this is rare and normally would be in high demand without much encouragement from sellers. Continuous reductions in price are not enough. Already, waterfront property is down to $15,000 per acre but without interested buyers, sellers are forced to sweeten their offers in other ways.
"It's an odd situation" says Mostyn. "Vacation property, especially waterfront homes is steadily recovering. Inventory remains low while Seattle buyers are snapping up bargains on Hood Canal and other salt water communities. Raw land on the other hand is sitting on the market for months without any interest."
For every seller of raw land, there must be at least five other owners who would like to sell their property but are simply not offering them publicly. This is mainly due to the 40% - 50% drop in prices experienced here since 2008. Knowing how valuable their land has been for decades, sellers are generally not interested in our deflated prices and with this new development of having to carry the paper, sellers are not interested in joining the market until things pick up in land sales.