There’s little doubt that the subprime mortgage crisis has affected Whidbey Island and will continue to do so for some time.

But gauging the extent of the impact may be a matter of who you talk to. One thing everyone seems to agree upon is that it’s definitely a real estate buyer’s market.

When it comes to the housing market, the statistics are pretty clear on North Whidbey. The number of sales are down, prices are down and the number of listings are up, according to the Northwest Multiple Listing Service.

Rick Schutte, a broker and general manager at Oak Harbor’s Coldwell Banker Koetje Real Estate, isn’t worried. He sees the change mainly as a return to normalcy after a period of an exuberant seller’s market.

“The market slowed down about a year-and-a-half ago and went back to normal,” he said. “For about three years before that we were in a highly-funded market.”

Schutte said the repercussion for the subprime fiasco on North Whidbey is mainly psychological. In other words, people hear about the crisis on the national news and are cautious about jumping into the real estate market.

Schutte feels that North Whidbey is pretty well insulated from subprime problems because of the military population and the number of loans guaranteed, in portion, through the U.S. Department of Veterans Affairs.

“Ours is a VA market and VAs are not subprime,” he said.

Gregor S. Strohm, ASA, a real estate appraiser in Oak Harbor, sees things a little differently.

“It’s going to get worse before it gets better,” he said.

Strohm closely watches the local real estate market and related statistics. He doesn’t see any “huge problems” right now, but he says the subprime crisis gradually killed off the real estate frenzy of two years ago. Back then, it wasn’t uncommon for buyers to bid against each other and for sellers to enjoy sales above the listing price.

But no more. “Some people are going to have to sit back and lower the prices of their homes,” he said.

Strohm said the subprime crisis has a wide-ranging impact on credit markets, housing, construction and the economy as a whole. The basic problem, he explained, is that banks and lending institutions made loans to homebuyers who really didn’t qualify and can’t pay the money back.

While other parts of the nation will likely feel a much bigger effect, he said Whidbey Island doesn’t operate in a vacuum. Interest rates are up and banks are tightening up lending practices.

“People who would qualify two months ago now may not qualify,” he said.

At the same time, nobody is seeing an increase in foreclosures on Whidbey, while the numbers skyrocketed in other parts of the country. Strohm said it’s just way too early to tell if that may happen on the island.

In July, 58 homes were sold on North Whidbey, as compared to 78 homes in July of 2006. In July, 379 homes were listed for sale, while there were only 260 a year before.

Home prices are also down. The 12-month moving average price on North Whidbey is down about $10,000, from a peak in February of $302,131 to $292,173 last month.

A good rule of thumb in the real estate market, Strohm said, is that a six-month housing inventory indicates a good, strong real estate market. He calculates that the current inventory is at eight-and-a-half months.

“It’s not a huge problem,” he said. “If it were at 12 months worth of inventory, that would be a problem.”

When it comes to VA loans, Strohm disagrees with Schutte due to changes over time. Strohm points out that VA loans account for less than 10 percent of mortgages in the area, much less than there were five years ago.

“They have become much less of a factor in this marketplace,” he said.

But the number of local VA loans may be growing in the future, especially in the face of an impending credit crunch. Schutte said his agents are encouraging military buyers to consider VA loans. They have definite advantages, he said, including being assumable. That means a new buyer in the future can assume the home seller’s existing mortgage, and most importantly, the interest rate.

On Central Whidbey, Windermere Realtor Marilyn Sherman Clay said she hasn’t seen much of an effect from the subprime problems. She explained that most of the people buying homes in the Coupeville area either pay with cash or put a large amount of money down, so it’s far from being a subprime market.

“The market is going along here and we only have so much inventory,” she said. “Prices are still holding, though they aren’t as good as they were two years ago.”

One impact she does see from the subprime crisis, Clay said, is fewer number of people selling their homes in California for huge bucks and scooping up prime real estate on Central Whidbey.

But even with a slowing market, the local experts agree that sellers with the right kind of home set at the right price won’t have any problems. The best homes are modern, attractive houses without functional problems, like only one bathroom or just a single-car garage.

“The best properties at each price point are going to continue to sell well and gain value,” Strohm said.

Clay agreed. “If priced well, an appealing home can sell within 30 days,” he said.

You can reach News-Times reporter Jessie Stensland at jstensland@whidbeynewstimes.com or call 675-6611.