Real Estate Information

Statistics are for the Bremerton downtown core and west to Kitsap Lake. The market for other parts of Bremerton and its suburbs should be similar. Bremerton homes were selling for a month end median price of $205,000 at the end of August, about 24% higher than a year ago and about 22% higher than last month. The more stable 3 month moving average median price ($180,650) was about 2.6% higher than a year ago. The sharp rise in median sales price in Bremerton reflects the sharp drop in the sales of lower priced homes since expiration of the homebuyer tax credit. The number of sales of higher priced homes did not fall as much. With fewer low priced sales, the median or middle price among all sales moved higher or to the right, if you can imaging a line of all the sale prices from low to high. The Kitsap County 3 month moving average median price is 4% higher than it was a year ago.   Bremerton's 3 month moving average for number of closed sales is 37% lower than a year ago and 24% lower than last month (both reflecting the drop off in lower priced sales, which dominate the Bremerton market). The 3 month moving average of closed sales is down 15% Countywide from a year ago.  The 3 month moving average number of Bremerton pending sales is down 46% from last year. The number of Bremerton active listings (187) is 5% higher than a year ago. The inventory turnover (total Bremerton homes on the market divided by number sold last month) is 14.4 months, slower than the 13.3 month turnover last month and 8.5 month turnover a year ago. The Bremerton market is slowing down and is a buyer’s market.

Bainbridge Island residential properties were selling for a August median price of $540,000, about 2% higher than in July. The more stable three month moving average of closed sale price rose about 5% from last month to $574,833 and is 17% lower than it was a year ago. The Kitsap County 3 month moving average median price is 4% higher than it was a year ago. The 3 month moving average for Bainbridge Island's number of closed sales is 35% higher than a year ago. The 3 month moving average of closed sales is down 15% Countywide from a year ago. The 3 month moving average number of Bainbridge pending sales in August rose 3% from a year ago. The number of active listings on Bainbridge (249) fell 7% from July and is up 2% from a year ago. Though we show prices rising and closed sales higher than a year ago, the rate of sales in Bainbridge is very slow. The inventory turnover (total homes on the market divided by number sold last month) is 12.5 months, slower then the 12.2 months in July and but somewhat better than the 13.6 months of a year ago. Bainbridge Island is a buyer’s market.

This is a repost of our July newsletter at prowserealestate.com.

Bloomberg Businessweek supplied plenty of local news for Kitsap County last week, citing a study by Moody’s Economy.com and Fiserv that the Bremerton-Silverdale area would have the fastest price appreciation of any metropolitan statistical area in the United States over the next 4 years, a 44.7% increase in prices (or 9.7% per year). Some clients have contacted us about this prediction, wondering whether to bank on it by renting now and selling in a few years.

We wish a 44.7% price rise for every homeowner, but don’t know the assumptions of this nationwide study or what specific demographic trends drove its conclusion. The article cites our county’s lower unemployment rate and the lower percentage of distressed homes for sale. These assumptions are true - unemployment is about 7.2% here compared with a nationwide figure of 9.5%, and the percentage of distressed properties is about 14% (our calculation for residential single family homes in the Northwest MLS) versus 19% nationally. As with many other parts of the country, residential construction in Kitsap County has slowed down a lot. The main idea in the article seems to be that demand will return as our economy returns to normal, which will happen sooner here than other areas. The housing inventory won’t be able to keep up, leading to a rise in prices. In a sense, the analysis is a heads up to builders to start development sooner. There are a number of large residential projects in planning, Sterling Hills in Silverdale, White Horse and Arborwood developments in North Kitsap, and various Noll Rd development projects, as well as Poulsbo Place II, in Poulsbo, just to name a few.

The rise in prices in Kitsap County peaked with a 3 month moving average median residential closed sale price of $301,182 in September 2007. If we use the current 3 month moving average median of  $248,916 and raise closed sale prices by 9.7% per year, we can plot a graph of past and projected home prices and compare it with median incomes in Kitsap County (median price in 2014 would be $360,470). See the graph below.

Financial reform has taken away those creative (and unrealistic) lending programs that allowed people to purchase homes when prices were rising from 2004 - 2007 without a corresponding increase in incomes. The projected rise in home prices now can only occur if there is a corresponding rise in real median incomes to maintain current affordability. Assuming that the source of rising income and home prices is not inflation (which would make incomes and prices go up everywhere and not just here), it seems unlikely that home prices can rise as much as projected without choking off the supply of eligible buyers, given that a large percentage of jobs in our County come from the government, and that government everywhere is trying to cut back rather than increase their costs. A squeeze on affordability from rising home prices could result in higher monthly rates in our rental market.

Each month we report on affordability in Kitsap County. How much would median incomes need to rise to maintain current levels of affordability with the projected 44.7% rise in home prices? If we use the current affordability index of 1.2, which is still not back to the historical levels of the past 25 years for our County, the median household income would need to rise from the current $57,724 to $89,170, a rise of about 55%. John Burns Real Estate consulting currently lists the Bremerton metropolitan statistical area (Kitsap County) as the 5th most overpriced area in the country comparing current median home prices and median incomes to historical averages for our county over the past 26 years. It will be interesting to find out whether the predictions of the Bloomberg report come to pass.

The number of closed sales in Kitsap County in July fell about 23% from June. Pending sales rose 15%, now having risen two months in a row after falling by nearly 50% in May. In June, there were 266 closed sales and 239 pending sales. In July there were 204 closed sales and 276 pending sales. Shown below is a graph of month-by-month pending sales vs closed sales. This graph shows how pending sales lead closed sales in direction if not magnitude - by about 2 months - and also shows the rise in pending sales at each of the homebuyer tax credit expirations (November and April) and the fall each took the subsequent month. Also based on this trend, we can expect a modest increase in closed sales next month.

Residential Highlights

Kitsap County's residential inventory in July (1944 listings) is about 4% higher than June and about 6% higher than a year ago. Inventory has been steadily rising this year, and is now at the highest we’ve seen since 2008. Some of the shadow inventory has become active again as bank owned and distressed sales and as sellers coming back to test the market. Distressed properties make up about 14% of our market. Closed sales were down 28% compared with July 2009. The more stable 3 month moving average number of Kitsap County closed sales is down 2% compared to a year ago, a sharp reversal from recent months of rising closed sales. 

Prices are steady...
The County’s monthly median closed sale price rose this month because the distribution of sales prices changed. Relatively fewer low priced homes were sold now that the tax credit is not there to lure 1st time buyers. At the same time almost no high priced sales occurred. July's median price ($264,250)  rose about 11% compared to June, and is 5% higher than a year ago. The more stable 3 month moving average (see graph below) of the median closed sale price ($248,916) rose about 5% from last month and is about 1.4% higher than a year ago. The current low median price coupled with record low interest rates offers good affordability, and it appears that some move up buyers are taking advantage in the $400-700k price range. Conventional mortgage rates are now about 4.57% for 30 year loans. Speculation that rates will rise later this year has been dampened by the debt crisis in Europe. Jumbo loans keep improving, and are now offered about 5.5%  The conventional and FHA loan limits remain at $475,000 in Kitsap County, which has helped sales of higher priced homes. The VA loan lender imposed limit is back to $417,000. Our median price graphs show a 3 month moving average of prices, which better shows trends and reduces the month-to-month fluctuations.

Seller expectations…
The July median list price (median of all properties listed for sale) fell to $304,450 from $319,000 last month (5% decrease). Median list prices have fallen significantly since a year ago as sellers became more aggressive in getting their properties sold.   The County has a listing inventory turnover rate of about 9.5 months, a slow down from the 7.1 month turnover in June.  Inventory turnover rate is calculated by dividing the number of homes for sale by the number of closed sales last month. This is a buyer’s market. The housing inventory increased for the 8th straight month, while the number of closed sales fell sharply in July. Shown below are graphs of inventory and inventory turnover for Kitsap County in 2007-10.

The inventory turnover also varies by price range, with higher priced homes selling more slowly than lower priced homes. We've made the point recently that the higher price ranges will be more difficult to reduce in inventory because today's lending environment has greatly reduced the pool of qualified buyers. This was a particularly daunting month in the higher price ranges, with only 1 closed sale in the County among 152 properties priced higher than $800k. 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. Below is a historical depiction of the changes in the ratio of listings to closed sales.

The number of pending sales in July was down 20% compared to a year ago and up 15% compared to June. The statistics for July pending sales varied for different parts of the County. Below is a graph showing the 3 month moving average of pending sales for different parts of the County.  Even though we said that pending sales increased last month, the 3 month moving average in all areas is still falling because of the overriding effect of May's big drop in pending sales. You can see that pending sales have fallen sharply in the lower priced (Bremerton) and higher priced areas (Bainbridge), while mid priced communities such as Poulsbo have seen lower magnitude fluctuations.

Reposted From:http://bprowse.com/north_kitsap_market

Statistics here are for Kingston, the largest housing market in North Kitsap. Activity in Kingston should be representative of the other areas in North Kitsap. Kingston homes were selling for a month end median price of about $208,725 at the end of July, 54% lower than a year ago. The more stable 3 month moving average ($253,480) of closed sale prices is down 28% compared to a year ago. The Kitsap County 3 month moving average median price is 1% higher than it was a year ago. The 3 month moving average of Kingston closed sales rose 39% from a year ago, while the number of pending sales is unchanged from a year ago. The 3 month moving average of closed sales is down 3% Countywide from a year ago. The number of active listings in Kingston (73) is up 7% from a year ago and down 16% from last month. The inventory turnover (total homes on the market divided by number sold last month) is 12.1 months (slower than the 9.7  month turnover reported last month and the 8.5 month turnover of a year ago). Kingston is still a buyer's market.

Reposted from:http://bprowse.com/bremerton_market

Statistics are for the Bremerton downtown core and west to Kitsap Lake. The market for other parts of Bremerton and its suburbs should be similar. Bremerton homes were selling for a month end median price of $167,450 at the end of July, about 1% less than a year ago and about 1% less than last month. The more stable 3 month moving average median price ($168,949) was about 6% less than a year ago. The Kitsap County 3 month moving average median price is 1% higher than it was a year ago.  Bremerton's 3 month moving average for number of closed sales is 12% lower than a year ago and 15% lower than last month. The 3 month moving average of closed sales is down 3% Countywide from a year ago.  The 3 month moving average number of Bremerton pending sales is down 44% from last year. With expiration of the homebuyer tax credit, pending sales in Bremerton have fallen sharply. The number of Bremerton active listings (186) is 2% higher than a year ago. The inventory turnover (total Bremerton homes on the market divided by number sold last month) is 13.3 months (much slower than the 6.5 month turnover last month and 4.9 month turnover a year ago). The Bremerton market is slowing down and is a buyer’s market.

Reposted From:http://bprowse.com/silverdale_market

Homes in Silverdale were selling for a July median price of about $383,500, 25% higher than a year ago. This rise is the result of a change in the price distribution of  homes sold - fewer low priced sales and more mid to high priced sales. Silverdale's more stable 3 month moving average median closed sale price was $301,150, about 18% higher than a year ago. The Kitsap County 3 month moving average median price is 1% higher than it was a year ago.   The 3 month moving average for Silverdale's number of closed sales was down 30% from a year ago. The 3 month moving average of closed sales is down 3% Countywide from a year ago.  The 3 month moving average of Silverdale pending sales in July fell 52% from a year ago. The number of active listings in Silverdale (109) is down 2% from last month and 35% higher than a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 9.1 months,  slower than the 8.5 month turnover reported last month. Silverdale is still a buyer's market.

Reposted From:http://bprowse.com/poulsbo_market

These statistics are for Poulsbo, including the downtown core, from the head of Liberty Bay southeast to Ne-Si-Ka Bay, and parts north to Sawdust Hill Rd. Other parts of Poulsbo and its suburbs should have similar trends. The July median sales price for Poulsbo was $317,750, up about 12% from a year ago and down about 11 % from last month. The more stable three month moving average closed sale price was $322,446, about 4% higher than a year ago. The Kitsap County 3 month moving average median price is 1% higher than it was a year ago.  The 3 month moving average number of closed sales in Poulsbo rose 2% from a year ago. The 3 month moving average of closed sales is down 3% Countywide from a year ago.  Poulsbo’s 3 month moving average of pending sales fell 41% from a year ago. The Poulsbo listing inventory (103) is 11% lower than a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 4.7 months, faster than the 6.4 months reported last month and better than most other areas in the County. Poulsbo is still a buyer’s market.

Reposted from:http://bprowse.com/bainbridge_island_market

Bainbridge Island residential properties were selling for a July median price of $529,500, about 19% lower than in June. The more stable three month moving average of closed sale price fell about 1.5% from last month to $547,333 and is 19% lower than it was a year ago. The Kitsap County 3 month moving average median price is 1% higher than it was a year ago. The 3 month moving average for Bainbridge Island's number of closed sales is 54% higher than a year ago. The 3 month moving average of closed sales is down 3% Countywide from a year ago. The 3 month moving average number of Bainbridge pending sales in July rose 29% from a year ago. The number of active listings on Bainbridge (268) rose 3% from June and is up 6% from a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 12.2 months, slower then the 8.1 months in June and the 10.5 months of a year ago. Bainbridge Island is a buyer’s market.

Prowse and Company's July Waterfront Update has been posted. See the graphs and download the latest newsletter and stats.

More about North Kitsap Real Estate:http://bprowse.com/north_kitsap_market

Statistics here are for Kingston, the largest housing market in North Kitsap. Activity in Kingston should be representative of the other areas in North Kitsap. Kingston homes were selling for a month end median price of about $239,000 at the end of June, 14% lower than a year ago. The more stable 3 month moving average ($256,348) of closed sale prices is down 33% compared to a year ago. The Kitsap County 3 month moving average median price is 2% lower than it was a year ago. The 3 month moving average number of Kingston closed sales rose 250% from a year ago, while the number of pending sales is up 33% from a year ago. Recall again that our current pending sales include pending short sales that may not close. The 3 month moving average of closed sales is up 17% Countywide from a year ago. The number of active listings in Kingston (87) is up 24% from a year ago and up 13% from last month. The inventory turnover (total homes on the market divided by number sold last month) is 9.7 months (worse than the 7.7  month turnover reported last month, but a bit better than a year ago). Kingston is still a buyer's market.