Real Estate Information

A new state law (SB 5810) effective July 26th provides 60 days for tenants (but not home owners) to vacate after foreclosure and requires that trustees not issue notice of default until 30 days after they have made initial contact with the borrower. Trustees in their letters must advise homeowners about how to contact DFI HUD approved housing counselors and about the new Washington State Bar Association free legal services to homeowners facing foreclosure.

The Prowse and Company waterfront update for July 2009 contains this graph showing selling price to original list price as a percentage versus days on the market for all 68 Kitsap Waterfront sales this year. It shows the cost in time for homeowners who list for too high a price. It also shows that except for homes priced attractively that sell quickly, very few homes sell for near their original asking price, and the final price gets lower the longer they sit on the market. (Click image below to see larger version.)

Find addtional details about affordability and current market trends by reading more of this report.

Statistics we refer to are for that part of Poulsbo encompassing the downtown core, from the head of Liberty Bay southeast to Ne-Si-Ka Bay, including parts north to Sawdust Hill Rd. The market for other parts of Poulsbo and its suburbs should have similar trends. Poulsbo's June median sale price was $290,000, about 16% lower than in June 2008. Homes in Poulsbo were selling for a three month moving average median sale price of about $317,333 at the end of June, down about 5% from a year ago. Kitsap County's 3 month moving average median price has fallen 10% over the past year. The 3 month moving average number of closed sales in Poulsbo has fallen 11% from a year ago. The number of closed sales is down 3% Countywide from a year ago.  June pending sales were up 211% compared to a year ago in Poulsbo (last month they were up 121%). The Poulsbo listing inventory (112) is 37% lower than a year ago and dropped 7% last month. The inventory turnover (total homes on the market divided by number sold last month) is 5.3 months, improved from the 8 months last month. Because there is probably a considerable shadow inventory of unsold homes not currently on the market, Poulsbo is still a buyers market.

Total listings on the market by month for Poulsbo

Number of Closed Sales each month for Poulsbo

Variations in Median Price Month by Month for Closed Sales in Poulsbo

Statistics we refer to are for that part of Bremerton encompassing the downtown core and west to Kitsap Lake. The market for other parts of Bremerton and its suburbs should have similar trends. Homes in Bremerton were selling for a month end median price of about $193,500 at the end of June, about 4% lower than a year ago but up 10% from last month. This apparent rise indicates that the distribution of sales has changed rather than that prices are rising. The more stable 3 month moving average of median price for closed sales has fallen 12% from a year ago. Kitsap County's 3 month moving average median price has fallen 10% over the past year. Bremerton's 3 month moving average for number of closed sales is down 9% from a year ago (compared to a Countywide drop of 3%). The number of month end Bremerton pending sales is up 41% from last year, but understand that some of these are short sales or other types that may fall apart or not close in the near future. The number of Bremerton active listings (157) rose 9% from last month but is 37% lower than a year ago. The inventory turnover (total Bremerton homes on the market divided by number sold last month) is 5.4 months (up from 10.8 last month). The Bremerton market is probably still a buyers market because of shadow inventory that has been pulled off unsold, but the lower price ranges are definitely selling better now.

Total listings on the market by month for Bremerton
Number of Closed Sales each month for Bremerton
Variations in Median Price Month by Month for Closed Sales in Bremerton

Homes in Silverdale were selling for a June median price of about $340,000, up 37% percent from a year ago. This is a big jump from last month and indicates that the price distribution in the market has changed rather than that prices are rising. The 3 month moving average for Silverdale median closed sale price of $294,167 was up 9% from a year ago. Kitsap County's 3 month average median price has fallen 10% over the past year. The 3 month moving average for Silverdale's number of closed sales was 19% lower than a year ago, compared to a drop in closed sales of 3% for the County as a whole. The number of Silverdale pending sales in June is up 47% from a year ago. The number of active listings in Silverdale (73) is 43% lower than a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 4.9 months, improved from last month's rate of 6 months. Silverdale is looking now like a neutral market, but there appears to be a large shadow inventory of unsold homes not currently on the market.

Total listings on the market by month for silverdale
Number of Closed Sales each month for silverdale
Variations in Median Price Month by Month for Closed Sales in silverdale

Using the example of Kingston - the largest housing market in North Kitsap - homes were selling for a June median price of about $279,000, 16% lower than a year ago, while the 3 month moving average of median closed sale price is up 7% compared to a year ago. Kingston prices fluctuate more than some of the other markets because of the lower listing and sales volume. Kitsap County's 3 month moving average median price has fallen 10% over the past year. The 3 month moving average number of closed sales fell 20% from a year ago, while the number of pending sales is 13% lower than a year ago. The number of closed sales is down 10% Countywide from a year ago. The number of active listings in Kingston (70) is down 37% from a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 10 months (down from 21 months last month). Sales in North Kitsap seem to be slower than farther south in the County. Kingston is a buyer's market.

Total listings on the market by month for North Kitsap

Number of Closed Sales each month for North Kitsap

Variations in Median Price Month by Month for Closed Sales in North Kitsap

Residential homes on Bainbridge Island were selling for a month end median price of about $869,950 at the end of June, up 64% from May. This large increase means that sale of some higher priced properties have closed, skewing the distribution of the median (or middle) sales price. There are several factors - low interest rates, anxious sellers, and a slowly reviving market for jumbo loans all must be contributing to some extent. The three month moving average of closed sale prices ($648,317) is up 8% from a year ago and rose 2.4% from last month. Kitsap County's 3 month moving average median price has fallen 10% over the past year. Since the distribution of prices across the range of sales is changing, you cannot trust that a rise in median price is a rise across the market in sales price. In most cases the sales of higher priced homes in the market follows considerable price reductions in these properties. The 3 month moving average for Bainbridge Island's number of  closed sales is 6% lower than a year ago. The 3 month moving average of closed sales is down 3% Countywide from a year ago. The number of Bainbridge pending sales in June fell 4% from a year ago. The number of active listings on Bainbridge (255) is down 16% from a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 19.5 months, slower than the 12.8 month turnover rate of last month. Bainbridge Island is a strong buyers market.

Earlier in the week we learned that about 1 in 4 mortgage defaults were strategic - that is the party being foreclosed could continue to pay the mortgage but chose to pack it in and be foreclosed upon.

Friday's Wall St Journal provided additional information that negative equity (owing more than your home is worth) is overwhelmingly the most frequent reason for mortgage default, far more prevalent than low FICA scores or the quality of the loan. The Journal Article questions whether in light of this information, the present government rescue programs make sense.

An article in today's Wall Street Journal notes that the government has expanded the eligibility for refinancing relief for homeowners current on their mortgage payments who owe more than their home is worth up to 125% of the homes value under the Making Home Affordable program. This program provides government assistance in refinancing conventional mortgages backed by Freddie Mac and Fannie Mae. Response to this program, orginally intended to help 4 to 5 million homeowners with refinancing, has thusfar been weak. The Journal article noted that in mid June only 20,000 people had used the program to refinance.

A recent blog article in the Journal ("When is it Cheaper to Ditch a Home than Pay") discussed that one in four foreclosures results from strategic defaults by homeowners able to make payments but unwilling to pay on a loan for far more than the value of their homes. Our understanding is that the Making Home Affordable program assists homeowners in lowering their payments but does not address the loss of equity when the home's value drops below that of the mortgage.