Mid September Kitsap Real Estate Outlook
The Federal Reserve cut the Federal Funds rate half a point yesterday, resulting in an immediate jump in the stock market and cheers from many investor circles. The rate cut exceeded what many thought would be only a quarter point reduction, and was an aggressive move to restore confidence in the business community and financial markets. It is not expected to have an immediate effect on our housing market. We look at mid month to see how much the tightening of lending standards and investor pessimism was affecting our Kitsap housing market.
Here are the current statistics for Subject To Inspection (STI) and Active Listings (comparing the number in mid September to the number in mid August). 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 9/15 | STI 8/15 | Active Listings 9/15 | Active Listings 8/15 |
|---|---|---|---|---|
| S. Kitsap W. of HWY 3 | 7 | 8 | 184 | 190 |
| S. Kitsap E. of HWY 3 | 4 | 3 | 175 | 159 |
| Port Orchard | 8 | 8 | 182 | 196 |
| Retsil/Manchester | 4 | 3 | 151 | 152 |
| Seabeck/Holly | 2 | 5 | 146 | 144 |
| Chico | 2 | 4 | 36 | 39 |
| Silverdale | 2 | 11 | 141 | 140 |
| W. Bremerton | 9 | 16 | 227 | 223 |
| E. Bremerton | 7 | 6 | 128 | 135 |
| E. Central Kitsap | 3 | 4 | 174 | 156 |
| Hansville | 2 | 3 | 51 | 50 |
| Kingston | 3 | 3 | 102 | 93 |
| Port Gamble | 1 | 1 | 30 | 26 |
| Lofall | 1 | 3 | 41 | 39 |
| Finn Hill | 2 | 3 | 78 | 82 |
| Poulsbo | 4 | 7 | 136 | 136 |
| Suquamish | 1 | 1 | 49 | 51 |
| Indianola | 3 | 1 | 38 | 42 |
| Bainbridge | 5 | 12 | 233 | 239 |
| Totals | 70 | 102 | 2302 | 2292 |
‘STI’ deals in September fell by 31% compared to the first two weeks in August. It is reassuring that the residential inventory has stabilized - rising less than 1% from last month. The ratio of sales to number of active listings fell from 4.5% to 3%. Unlike in the past several months, Bainbridge Island sales fell by 58%, showing that the upper end of the market, which has buoyed overall sales in spite of sagging sales in the lower price ranges, is now seeing the effects of the mortgage lending problems and financial market turmoil. Sales fell markedly in West Bremerton and Silverdale also.
Properties sales are very competitive. Homes 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 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.
September’s APR is 6.480% on a 30-Year and 6.126% on a 15-Year, both Conforming. August’s APR was 6.733% on a 30-Year and 6.505% 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% 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. 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 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.
Next entry: Kitsap Real Estate Local Markets in August
Previous entry: Kitsap Real Estate Market Report - August 2007
