Thursday, October 18, 2007
Download the October Prowse and Company Waterfront Update
Download the October Waterfront Update. This is your guide to our latest waterfront listings and market statistics about waterfront sales in Kitsap County.
Mid October Kitsap Real Estate Outlook
A recent article in the Seattle Times noted that the median price of homes in Seattle has fallen 7% since July. Nationally, home prices as measured by the Office of Federal Housing Enterprise Oversight’s housing-price index, which has never registered a year-to-year decline, are seen falling 1.26% this year and 2.55% next year, revised to fall farther than previous estimated drops of 1.16% and 2.25%. The Seattle market is currently priced at 120% of its value at the peak of the national real estate boom in 2004, and the July Case-Shiller index of prices for Seattle is at 192 (which doesn’t reflect the drop in median prices above). Nationally this price index has risen from 100 since 2000. The predictions of falling prices in the national real estate market are based on getting the median cost of housing back within the historical relationship of monthly payments to buyer’s incomes. Much of the mortgage financing done in the past 2 years has subverted this historical relationship. High rate subprime mortgages accounted for 29% of the total number of home loans last year (24% in Washington) according to a recent Wall St Journal survey, and these loans cut across far broader differences in income, race, and geography than most Americans suspect. Many buyers placed bets that the market would continue its surge, allowing them to capitalize on low initial rate, sub prime mortgages rather than obtaining conventional financing that required a larger down payment. The impact of defaults on these mortgages is still unveiling itself in the financial reports of banks and investment funds. Most analyses predict that market recovery is still a long way off. With all this in mind, we look at the sales activity and listing inventory in Kitsap County at mid October.
Here are the current statistics for Subject To Inspection (STI) and Active Listings (comparing the number in mid October to the number in mid September). 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 sales will fall apart before they become pending sales.
| Area | STI 10/15 | STI 9/15 | Active Listings 10/15 | Active Listings 9/15 |
|---|---|---|---|---|
| S. Kitsap W. of HWY 3 | 6 | 7 | 183 | 184 |
| S. Kitsap E. of HWY 3 | 6 | 4 | 158 | 175 |
| Port Orchard | 6 | 8 | 177 | 182 |
| Retsil/Manchester | 6 | 4 | 132 | 151 |
| Seabeck/Holly | 4 | 2 | 136 | 146 |
| Chico | 1 | 2 | 36 | 36 |
| Silverdale | 7 | 2 | 127 | 141 |
| W. Bremerton | 10 | 9 | 249 | 227 |
| E. Bremerton | 7 | 7 | 119 | 128 |
| E. Central Kitsap | 6 | 3 | 164 | 174 |
| Hansville | 1 | 2 | 49 | 51 |
| Kingston | 4 | 3 | 99 | 102 |
| Port Gamble | 1 | 1 | 33 | 30 |
| Lofall | 5 | 1 | 34 | 41 |
| Finn Hill | 3 | 2 | 77 | 78 |
| Poulsbo | 3 | 4 | 135 | 136 |
| Suquamish | 1 | 1 | 47 | 49 |
| Indianola | 0 | 3 | 42 | 38 |
| Bainbridge | 5 | 5 | 227 | 233 |
| Totals | 82 | 70 | 2224 | 2302 |
‘STI’ deals in October increased by 17% compared to the first two weeks in September, which were very slow. The number of active listings in our residential inventory decreased by 4%, showing that sellers are pulling their properties off the market in some cases rather than relisting. The ratio of sales to number of active listings rose from 3% to 3.7% - still well below the typical activity earlier in the year. Bainbridge Island remained unchanged after falling by 58% last month. Sales rebounded somewhat in East Central Kitsap and Silverdale.
Property sales are very competitive. Homes priced for the market earlier this year are often overpriced in today's market. Many sellers are choosing to reduce price to remain competitive, and we are seeing some homes come on the market at prices significantly below properties already listed in the same neighborhoods, reflecting that buyers are continuing to be more selective and only the best valued homes are being chosen.
October’s APR is 6.606% on a 30-Year and 6.252% on a 15-Year, both Conforming. September’s APR was 6.480% on a 30-Year and 6.126% on a 15-Year, both Conforming. Both rates are up somewhat from last month. These rates for loans that conform to the underwriting standards of Fannie Mae and Freddie Mac continue to be attractive. Buyers moving into our area with considerable equity after selling elsewhere or having sufficient funds for a 20% down payment can expect to purchase a new home here at an attractive price and close their transaction smoothly with few problems. Buyers expecting to purchase with a lower down payment or with poor credit history will pay significantly higher interest and be required to submit to more stringent lending standards than in the past. Buyers who wish to purchase with a jumbo mortgage (more than the maximum lending amounts of Fannie and Fred) will find much better rates than prior to last month's Fed rate cut. If you qualify for FHA or VA loans, these programs have become much more attractive for low down payment buyers. Check with your lender to see if you qualify. To check the daily rate you can contact your lender or preview web sites such as this one - http://www.wellsfargo.com/mortgage/rates.
Statistics not compiled or published by NWMLS
