Wednesday, April 18, 2007
Mid April Kitsap Real Estate Outlook
It’s another month of conflicting signals about our real estate market. On April 12th the National Association of Realtors, which had been projecting as recently as February a 1.9% increase in the median home price this year, said that prices for previously occupied homes will slip 0.7% this year from the 2006 level. Thus they are predicting the first year over year fall in home prices since the Great Depression. An article in today’s Wall St Journal about Washington Mutual’s plan to forestall failures of subprime loans revealed that high cost, mainly subprime, loans comprise 20-30% of the entire loan portfolios for a number of prominent national banks. We are expecting that lending standards will probably become more restrictive so that fewer buyers will be able to qualify in the near future.
Our experience of the Poulsbo and Kitsap real estate market is that it has been very slow. We have buyers buying, but our listings in general are not selling. That being said, a look at the statistics shows that there is more activity in the market than there was in February.
Here are the current statistics for Subject To Inspection (STI) and Active Listings (comparing the number in mid April to the number in mid March). You'll recall that STI represents a newly signed around contract prior to the buyer and seller agreeing on the home inspection. Below we show the number of STI contracts signed around in the first 2 weeks of the month. The number of STI contracts is the best gauge for telling us in near real time how many sales are occurring. Some of these deals will fall apart before they become pending sales.
| Area | STI 4/15 | STI 3/15 | Active Listings 4/15 | Active Listings 3/15 |
|---|---|---|---|---|
| S. Kitsap W. of HWY 3 | 6 | 9 | 152 | 128 |
| S. Kitsap E. of HWY 3 | 7 | 5 | 123 | 92 |
| Port Orchard | 9 | 6 | 156 | 134 |
| Retsil/Manchester | 4 | 1 | 101 | 88 |
| Seabeck/Holly | 2 | 1 | 97 | 82 |
| Chico | 1 | 1 | 28 | 23 |
| Silverdale | 5 | 9 | 94 | 77 |
| W. Bremerton | 14 | 6 | 174 | 145 |
| E. Bremerton | 5 | 6 | 85 | 67 |
| E. Central Kitsap | 6 | 5 | 101 | 81 |
| Hansville | 2 | 0 | 28 | 19 |
| Kingston | 2 | 2 | 67 | 52 |
| Port Gamble | 1 | 0 | 17 | 17 |
| Lofall | 0 | 1 | 24 | 21 |
| Finn Hill | 2 | 4 | 52 | 43 |
| Poulsbo | 9 | 4 | 90 | 72 |
| Suquamish | 4 | 2 | 30 | 31 |
| Indianola | 3 | 0 | 26 | 27 |
| Bainbridge | 6 | 6 | 176 | 142 |
| Totals | 88 | 66 | 1621 | 1341 |
‘STI’ deals increased by 33% compared to the first two weeks in March. The 88 STI transactions are 30% fewer than the 125 we reported in February. The most obvious change is the bloating of the residential inventory, up 21% since last month. Despite a healthy increase in the number of sales, the ratio of sales to number of active listings only increased from 5% to 5.4%. Sales in Manchester, Port Orchard, West Bremerton, and Poulsbo rose the most.
There is more than meets the eye with what we've reported above. First let's differentiate between the 1621 active listings above and the 1735 listings we reported at the end of March. Looks like the inventory is declining doesn't it? No - we actually have double standard for counting active listings. At the beginning of the month we've been comparing active, pending, and sold properties, and in doing so we lump active, active-STI, and contingent (a signed around contract contingent on the buyer selling his own house before proceeding with the purchase of another) sales together as "Active". Currently the total active computed this way is 1841 - that's a rise of 6% in total active inventory since April 1st! There are 184 Active STI (total, not just Active STI between April 1st and 15th) and 36 Contingent sales. In hot markets there aren't many contingent sales because sellers would prefer having buyers who don't have to sell another property so they can purchase. When the market slows, sellers who have not been seeing much activity are more inclined to accept good contingent offers.
Another missing factor is that in some areas there are a significant number of signed around contracts that are bypassing active status and initially recording as pending. These are new construction pre-sale contracts. In Poulsbo this month there have been 20 transactions placed in pending status - 8 regular sales that passed through STI status and 12 more new construction pre-sales that never appeared in the active listing inventory. Buyers have been opting for the low priced new construction at Quadrant Homes Stendahl Ridge development instead of homes already on the market. While new construction is down significantly nationwide, there are several large developments just starting in the Poulsbo area, and these will define the resale market. Our experience is that buyers won't pay more for resale than for equivalent new construction, regardless of the extra landscaping and amenities the seller may have added.
April’s APR is 6.480% on a 30-Year and 6.252% on a 15-Year, both Conforming. March’s APR was 6.353% on a 30-Year and 6.126% on a 15-Year, both Conforming. Both the 15 year rate and the 30 rate are up a bit. To check the daily rate you can contact your lender or preview web sites such as this one - http://www.wellsfargo.com/mortgage/rates.
Saturday, April 14, 2007
Download the April Waterfront Update
Download the April Waterfront Update
Saturday, April 07, 2007
Kitsap Real Estate Market Report - March 2007
Residential Highlights
Kitsap County residential inventory in March (1735 listings) was up 6% from February. The March inventory was 47% higher than last year, up from 40% last month and reversing the trend. The number of year to date pending sales was down 1% compared to a year ago - this reverses the the trend of improved pending sales from last month. Bainbridge Island pending sales are up 21% from a year ago (they were up 34% last month). The number of YTD closed sales is down by 5% compared to a year ago - up from minus 12% last month. This reflects the improvement in pending sales we saw last month, a trend that has reversed this month. Bainbridge Island closed sales were up 17% from a year ago after being minus 14% last month. This again reflects the rise reported last month in Bainbridge Island pending sales - a trend that has now reversed.
Prices are rising…
The YTD median sales price of $285,000 increased slightly more than 1 percent from the previous month. This is up 9.6% from a year ago. Our market continues to sacrifice sales for price stability. Many sellers read of rising prices in the media and interpret this as a need to raise their price. However, in general fewer homes within any given bracket of price and amenities are selling, so sellers should be striving to be most competitively priced among their competition.
Seller expectations…
The median list price for the year remained essentially steady at $350,000, about the same as the last 2 months - list prices are not going up. This is about 7.5% higher than a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 5.22 months, down from 7.8 months in February. A year ago this number was 3.79 months, and that was already reflecting a market slowdown from its 2005 levels. Today a seller has a 19% chance of selling his/her home in a given month. Competitive pricing is essential, and most offers we see presented are negotiating on price.
As we’ve said above, we think that the trend of improved pending sales has reversed. At mid month in March we reported that STI (subject to inspection) sales had declined significantly in the first two weeks of March - a harbinger of future pending sales. The number of STI’s improved somewhat the second half of March, but the forecast for April pending sales still appears to be down significantly.
The distribution of pending sales increases varied widely in the County. Areas where sales were depressed the most last year (Bainbridge, Poulsbo) appear to have benefited most from the spurt in sales. Here is a snapshot:
Bainbridge Island +22% (+35% last month)
Poulsbo +19% (+11% last month)
Bremerton -10% (0% last month)
Kingston +45% (-7% last month - wow!)
Silverdale -6% (+6% last month)
Port Orchard +9% (unchanged from last month)
Olalla -30% (-14% last month)
Note: Statistics not compiled or published by NWMLS
Statistics not compiled or published by NWMLS
