kitsap-market-blog
Tuesday, November 07, 2006
Kitsap Real Estate market update for October
Median list and sale prices are leveling off, while a combination of seasonal factors and a continuing market slowdown have caused inventory to fall slightly and inventory turnover to continue to slow.
Residential Highlights…
Kitsap County’s residential inventory in October (1839 active listings) was down 3% from September. Inventory has been rising all year, so this drop must be viewed as the normal seasonal drop where sellers pull their unsold properties off the market to wait for spring. The October inventory was 51% higher than a year ago, down from 58% last month. Even the exception in Kitsap County’s rising inventory, Bainbridge Island, has a rising inventory with a 52% increase from 2005 (it was up 42% last month and 20% in August). The Bainbridge residential properties inventory is now about the same as the rest of the County. The number of YTD pending sales in October was down 13% compared to a year ago - same as last month. Note that Bainbridge Island pending sales YTD are down 20% from a year ago. The number of YTD closed sales is down by 12% compared to a year ago - up from 11% last month. Bainbridge Island closed sales YTD are down 21% from a year ago. Inventory is up substantially while actual sales are behind last year’s numbers. If you look just at last month’s closed sales, they are down 23% compared to a year ago. That’s a big drop compared to the 11% decrease we reported last month.
Prices are stabilizing…
The median sales price of $275,000 countywide was up 10% from a year ago, (same as last month). Compared to September it rose less than 1% - meaning that prices are stabilizing. Since January the median sales price has risen 7%.
Seller Expectations...
Both the median list and closed sale prices were essentially unchanged last month. The median list price has risen 7.8% since January. Sellers appear to be pricing their listings more in line with the softening market conditions. In practice our experience has been that nearly all of our listings sold in the past 2 months have had to reduce price before receiving a successful offer. The inventory turnover of homes on the market, as calculated by total number of homes on the market divided by number sold last month, is 6 months (up from 5.5 last month and 4.5 the previous month - this is a telling figure about the pace of sales). A year ago this number was 3.1 months and even lower in the summer of 2005. Based on this a seller’s home has a 17% chance of selling in any given month now versus a 32% chance a year ago. Competitive pricing is much more of a factor now than last year.
Wednesday, November 01, 2006
Realty Times November Newsletter
Here is a link to our ”November Real Estate Update”:
This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.
This month’s issue includes topics such as:
“Seller’s Home Appeal for Today’s Market”;
“Buying To Expand Can Be Tricky”;
“Keeping Your Credit Clean”;
“How Much is Too Much to Fix up Your House?”;
“Economists Question Media’s Negative Drumbeat on Housing”;
Plus a roundup of October real estate activity as well as much more advice and information.
Tuesday, October 17, 2006
NAR - Buyers are returning to the Market
It’s probably time we put a little positive spin on all of this hand wringing over the real estate market. In mid 2006 the National Association of Realtors (NAR) published a comprehensive report on the Seattle Real Estate market.
This report paints the strong economic outlook of the Greater Seattle area in great detail. Some of the more enlightening information in the report regards mortgage servicing costs versus income ratio. With the ratio of average home price to average income climbing from 2 to about 3 in the Seattle area since 2000, you would think that the percentage of income people spend on mortgage service would also have climbed significantly - but this ratio has remained remarkably close to the historical average of 20% - currently it is about 23% in the Seattle area, close to the national average of 22%. Lower loan fees and interest rates have kept the percentage of income used for mortgage payments down in spite of rising prices. Since the NAR report was published, interest rates have actually declined about half a percent, making this ratio even more favorable now than it was in mid summer.
David Lereah, NAR’s chief economist, said the housing market is showing signs of life and that sales may be leveling out. “Many potential home buyers who have been taking a wait-and-see attitude or taking their time and being methodical in the search process are being enticed by lower home prices,” he said. “Given a positive economic backdrop of lower interest rates and job creation, we expect sales activity to pick up early next year.”
Then NAR article also said that the current scenario presents a unique opportunity for buyers. “The supply of homes on the market is the highest we’ve seen in over 13 years, and mortgage interest rates are experiencing an unexpected decline,” said NAR President Thomas M. Stevens, senior vice president of NRT Inc. “The 30-year fixed rate is hovering around 6.3 percent, and sellers in most of the country are now showing a willingness to negotiate. While this changing market is a great time to buy, it’s become increasing important for parties on both sides of the real estate transaction process to have professional representation.”
The 30-year fixed-rate mortgage will probably average 6.5 percent in the fourth quarter but will trend up modestly in 2007. The one negative aspect of this effort to hold down the total cost of debt service is the trend towards adjustable rate mortgages, now at about 47% of all new loans. Buyers cannot count on home value appreciation in the near term to allow future refinancing to avoid the rising payment scheme of some adjustable rate mortgages.
The unemployment rate should average 4.8 percent in the fourth quarter. Inflation, as measured by the Consumer Price Index, is expected to be 3.4 percent for all of 2006, while growth in the U.S. gross domestic product is forecast at 3.3 percent. Inflation-adjusted disposable personal income is likely to grow 3.4 percent for 2006.
The strong economic picture in Seattle and in Kitsap County as well, coupled with a plentiful supply of homes on the market throughout Kitsap County, certainly reinforces the scenario that now is a good time to be a buyer.
Statistics not compiled or published by NWMLS
