Mid August Kitsap Real Estate Outlook
Despite what seems like a terrible month for real estate, mortgage debt, and general business conditions in the US markets, the revelation of the impact of subprime mortgage defaults upon the markets that purchase this debt has in a sense come as a relief. Judging from the fall in stocks and flight to more secure investments, one could conclude that the news has been quite frightening. This is reassuring because things might not really be that bad.
Last month's first 15 days, with just 56 STI sales, will probably be the low point for the year in Kitsap County. This month we have 102, which is more typical of the pace we've seen in other months this year. On the other hand, the inventory of unsold homes continues to grow - up another 8% this month to 2292.
Here are the current statistics for Subject To Inspection (STI) and Active Listings (comparing the number in mid August to the number in mid July). 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 8/15 | STI 7/15 | Active Listings 8/15 | Active Listings 7/15 |
|---|---|---|---|---|
| S. Kitsap W. of HWY 3 | 8 | 0 | 190 | 173 |
| S. Kitsap E. of HWY 3 | 3 | 5 | 159 | 158 |
| Port Orchard | 8 | 5 | 196 | 198 |
| Retsil/Manchester | 3 | 4 | 152 | 138 |
| Seabeck/Holly | 5 | 5 | 144 | 132 |
| Chico | 4 | 0 | 39 | 35 |
| Silverdale | 11 | 2 | 140 | 132 |
| W. Bremerton | 16 | 6 | 223 | 215 |
| E. Bremerton | 6 | 2 | 135 | 120 |
| E. Central Kitsap | 4 | 4 | 156 | 154 |
| Hansville | 3 | 0 | 50 | 39 |
| Kingston | 3 | 2 | 93 | 89 |
| Port Gamble | 1 | 0 | 26 | 20 |
| Lofall | 3 | 0 | 39 | 39 |
| Finn Hill | 3 | 4 | 82 | 70 |
| Poulsbo | 7 | 2 | 136 | 120 |
| Suquamish | 1 | 5 | 51` | 34 |
| Indianola | 1 | 2 | 42 | 44 |
| Bainbridge | 12 | 10 | 239 | 220 |
| Totals | 102 | 56 | 2292 | 2130 |
‘STI’ deals in August rose by 82% compared to the first two weeks in July - restoring back to normal what was a huge drop in activity last month. The residential inventory has continued to grow significantly, up another 8% since last month. The ratio of sales to number of active listings came up from 2.6% to 4.5%. Bainbridge Island sales continue at a respectable pace. Sales in West Bremerton, Silverdale, and South Kitsap west of Hwy 3 rose markedly.
Properties are selling, but as you can see it is very competitive with the huge increase in inventory and significant decline in closed sales. Properties priced for the market in January are often no longer competitive. Many sellers are choosing to reduce price to remain competitive, and we are seeing some homes come on the market at prices well 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. At the start of the month we reported that sales countywide were up for prices above $500k, while they have fallen significantly in the lower priced areas. This skewing of the distribution of sales results in rising median and average prices when for the vast majority of sellers their price must be rock bottom to attract a buyer.
August’s APR is 6.733% on a 30-Year and 6.505% on a 15-Year, both Conforming. July’s APR was 6.860% on a 30-Year and 6.757% on a 15-Year, both Conforming. Both rates are down significantly from last month and even more from our peak 2 months ago. 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% downpayment 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 downpayment or with poor credit history will pay significantly higher interest and be required to submit to more stringent lending standards than in the past. Also buyers who wish to purchase with a jumbo mortgage (more than the maximum lending amounts of Fannie and Fred) will pay a premium. If you qualify for FHA or VA loans, these programs have become much more attractive for low downpayment 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.
Next entry: Kitsap Real Estate Local Markets in July
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