Thursday, November 15, 2007
Kitsap Real Estate Local Markets in October
This article seeks to explore some of the significant variations in the Kitsap Real Estate market. Overall, inventory turnover has continued to decline (takes longer to sell the existing inventory), particularly on Bainbridge Island. Listing inventory dropped for the first time since the start of the year, indicating that some sellers are taking their properties off the market until spring. Some areas still have rising inventory (Bainbridge and Bremerton). Median prices everywhere show the prospect that they may soon start to drop. The Bainbridge Island market has slowed significantly in the past 3 months as turmoil in the financial markets has damped what has been good year for the sale of upscale homes. Bremerton continues to be slow but may have picked up a hair. Silverdale looks a lot like it did last year. Poulsbo is hot, but the resale market in Poulsbo is much like resales elsewhere in the County. Here is a breakdown by area.
Bainbridge Island Real Estate
Homes on Bainbridge Island were selling for a median price of about $680,000 at the end of October, up about 5% from a year ago. Kitsap County median prices were up about 7% over the past year. The YTD number of Bainbridge closed sales is down 1% from a year ago, and the YTD number of pending sales is down 2%. The Bainbridge market activity has dropped steadily over the past several months after being up for most of the year compared to 2006. The number of closed sales is down 17% Countywide from a year ago. The number of active listings on Bainbridge (246) is up 22% from a year ago. Unlike most of the County the inventory is still rising, whereas overall we are seeing it decline as sellers take their homes off the market until next year. The inventory turnover (total homes on the market divided by number sold last month) is 24.6 months, up sharply from 7.3 months reported last month. Bainbridge Island is a buyers market.
Bremerton Real Estate
Homes in Bremerton were selling for a median price of about $215,960 at the end of October, up about 8% from a year ago. Kitsap County median prices were up 7% over the past year. The YTD number of closed sales is down 28% from a year ago, and the YTD number of pending sales is down 21%. The number of active listings (274) is up 47% from a year ago, and the inventory turnover (total homes on the market divided by number sold last month) is 8.8 months. Bremerton is a buyers market. Whereas the County listing inventory fell this month by 4.3%, the Bremerton inventory is still increasing, up 8.3% from last month.
North Kitsap Real Estate
Using the example of Kingston - the largest housing market in North Kitsap - homes were selling for a median price of about $365,000 at the end of October, up about 9% from a year ago. The median price rose last month after falling the past several months. Fluctuations occur because of the relatively small number of sales. Kitsap County median prices were up 7% over the past year. The YTD number of closed sales is down 16% from a year ago, and the YTD number of pending sales is down 9%. The number of closed sales is down 17% Countywide from a year ago. The number of active listings in Kingston (96) is up 30% from a year ago, and the inventory turnover (total homes on the market divided by number sold last month) is 10.7 months.
Poulsbo Real Estate
Homes in Poulsbo were selling for a median price of about $354,956 at the end of October, up about 1.4% from a year ago. Kitsap County median prices were up 7% over the past year. The number of closed sales YTD has increased 12% compared to last year, and the number of YTD pending sales has increased 39%, though a large portion of that increase is from presales of one moderately priced new construction development - homes that never appeared as active listings. The Poulsbo listing inventory (140) has risen by 2.9% compared to a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 7.4 months.
Silverdale Real Estate
Homes in Silverdale were selling for a median price of about $318,500 at the end of October, up about 1% from a year ago. The number of YTD closed sales was about the same as a year ago, compared to a drop in closed sales of 17% for the County as a whole. The number of pending sales YTD is up 3.2% from a year ago. The number of active listings in Silverdale (133) is up 30% compared to a year ago, and and the inventory turnover (total homes on the market divided by number sold last month) is 7.4 months.
Wednesday, November 07, 2007
Kitsap Real Estate Market Report - October 2007
Within the past week the Federal Reserve has again lowered its Federal Funds Rate target by a quarter point - now at 4.5%. These moves to improve liquidity and shore up business confidence in our financial markets run counter to the Fed’s need to suppress inflation, which may occur as a result of the weakening US Dollar and the rising costs of imported goods and energy. Although financial markets may continue to provide the Fed with arguments to further cut the funds rate, it will be interesting to watch the debate among Fed policy makers about the advisability of doing so. The Mortgage Bankers Association last week predicted that the housing slump will last at least another year. Nationally the number of existing home sales is expected to decline 12% this year and another 10% next year.
Much of the unrest in financial markets has been the result of recent losses reported by major banks and brokerages, particularly Citibank and Merrill Lynch. While losses reported thus-far by these and other major banks do not yet exceed $30 to $40 billion, at least one analyst has reported that the total losses from the credit crunch may be in the range of $250 - 500 billion. There are currently over $1 Trillion in subprime mortgages in the US, about 20% of the total number of home loans. The Center for Responsible Lending has published a snapshot of subprime lending in the US. It shows that 14.4% of the subprime loans are in foreclosure and estimates that up to 2.2 million families will lose homes due to foreclosure over the next several years. It estimates that about 90% of the subprime loans made during the 2004-2006 period included a sharp increase in interest rates (typically at the two year point). Our experience is that many of these also came with a prepayment penalty that makes refinancing unaffordable for the first 3 or more years of the loan.
Looking now at Kitsap County, the listing inventory is falling as the holidays approach. Nationally this same trend is occurring in most areas. This drop in the total number of listings obscures the 16% increase in the number of new listings that came on the market last month compared to a year ago. Median sales prices fell $1000 compared to last month, but are still up 7% from a year ago. Here are some more details.
Residential Highlights
Kitsap County residential inventory in October (2314 listings) was down 4.3% from September. Inventory was 26% higher than a year ago. The number of year to date pending sales was down 12% compared to a year ago - same as last month. Countering the downward trend, Poulsbo YTD pending sales are up 39% compared to a year ago. Of 61 current pending sales in Poulsbo, 52 are new construction, and most of these are presales that never appeared as active listings. Bainbridge Island year to date pending sales are down 2% from a year ago (a reversal over the past several months after being up for most of the year). The number of YTD closed sales Countywide is minus 17% compared to a year ago - same as last month. Poulsbo YTD closed sales are up 12% from a year ago, down from 18% last month. Bainbridge Island closed sales were down 1% from a year ago, reversing the positive trend we have reported for most of the year.
Prices are falling…
The YTD median sales price of $295,000 in October was down less than a percent from September. It has basically been flat for 4 months now. This is up 7% from a year ago. It’s still most important for sellers to be striving to be most competitively priced among their competition.
Seller expectations…
The median list price for the year remained steady at $350,000. This is the same as last month and is less than 1% higher than a year ago. The spread between the median list price and median sales price is telling - when the market is good this spread becomes larger and as the market declines this difference becomes smaller. Two years ago (at the top of the market) the spread between median list and median closed sale price was $74,100. A year ago the spread was $74,500, This month the spread is $55,000. The inventory turnover (total homes on the market divided by number sold last month) is 9.3 months, about the same as September. This number has been steadily going up for the past several months. A year ago this number was 6 months, and that was already reflecting a market slowdown from its 2005 levels. Today a seller has a 11% chance of selling his/her home in a given month. Competitive pricing is essential, and almost every offer we see presented is negotiating on price.
The statistics for pending sales (compared to year-to-date sales last year) varied for different parts of the County. Here is a snapshot:
Bainbridge Island -2% (+3% last month)
Poulsbo +39% (+45% last month) - 52 of 61 pending are new construction
Bremerton -21% (-24% last month)
Kingston -9% (-7% last month)
Silverdale +3% (-2% last month)
Port Orchard -4% (-6% last month)
Olalla -23% (-23% last month)
Statistics not compiled or published by NWMLS
