This is an archive copy of our market report for February.
There is such a preponderance of negative economic news that the wary person will start looking for the upside. Many of the Kitsap Real Estate statistics don't look good, but let’s probe around for a bright spot before we conclude that there is no end to this darkness. Pending sales in February are still higher than a year ago - what’s driving that? The listing inventory fell January - this is far from normal. The inventory turnover (number of active listings divided by number of closed sales in that month) improved from 14.6 months in January to 13.1 months. While the turnover implies that your home may take 13 months to sell, you should know that most homes don’t sell at all, and those that do sell take an average of about 100 days or so. Shown below are graphs of inventory and inventory turnover for Kitsap County in 2007-09. Also shown is a graph of probability of sale, showing historically what percentage of the homes listed for sale will actually sell. The inventory turnover also varies significantly by price range, with higher priced homes selling much more slowly than lower priced homes. See the graph below for a better perspective. Every seller is in a price war and beauty contest at the same time. If your price is not best among comparable properties, the chance of sale is very small. With listing inventory up and closed sales down, our market is far different than it was in 2005. Below is a historical depiction of the changes in the ratio of listings to closed sales.
Kitsap Real Estate Months to sell existing inventory at current rate of sale
Chance of sale of Residential properties in Kitsap County
Kitsap Home Inventory Turnover Rate for various price ranges
Historical ratio of listings for sale vs closed sales
Listing Inventory
Kitsap’s listing inventory was 1790 listings at the end of February was 19% lower than a year ago and down about 1% from last month. This is very much against the seasonal trend. It appears for now that the lower inventory is because sellers have given up until the market improves - but stay tuned.
Kitsap Listing Inventory
Pending and Closed Sales
The number of February pending sales rose 12% compared to a year ago (same as last month) and were up 12% compared to January. The statistics for February pending sales (compared to February sales last year) varied for different parts of the County. Most areas have improved, though Port Orchard and Poulsbo have fallen. Here is a snapshot:
Bainbridge Island 21% (72% last month)
Poulsbo -44% (14% last month)
Bremerton 23% (4% last month)
Kingston 166% (0% last month)
Silverdale 23% (-70% last month)
Port Orchard -59% (-0% last month)
Olalla 57% (17% last month)
The number of YTD closed sales Countywide (see graph below) is minus 25% compared to a year ago, down from minus 23% last month
Kitsap County Closed Home Sales
Median Sales Price
The median price has been falling. February's median price ($225,450) is down about 4% percent from the median in January (see graph below), and is about 10% lower than a year ago. Last year we predicted that the median price would need to fall to about $235,000 to restore affordability (ratio of home prices to income) to the levels early in the decade prior to the latest housing boom, so this month’s median price is good news for buyers. Based on our latest count, the percentage of pending and closed sales from short sales and bank owned properties continues to increase. The recent fall in interest rates has made a great difference in affordability for conforming conventional, VA, and FHA buyers. With passage of the President’s Stimulus Program, the conventional, VA, and FHA loan limits were restored to $475,000 in Kitsap County, which should give a lift to sales of higher priced homes. The jumbo loan and sub prime markets are still difficult for buyers to obtain financing. We have reworked our median price graphs to show a 3 month moving average of prices, which will better show trends and reduce the month-to-month fluctuations.
Kitsap Median List and Sale Prices
After the January’s median list price dropped from $349,000, approximately where it had been for more than a year, to $329,000, about a 6% drop, the February median bounced back somewhat to $335,000. This continues the trend started last month where we have seen that sellers are paying more attention to the drop in closed sale prices and lowered their list prices from the plateau of the past couple years.
