Real Estate Information

Bainbridge Island residential properties were selling for a March median price of $501,500, about 1% less than in February and 4% lower than a year ago. The more stable three month moving average closed sale price fell 4% from last month to $485,708 and is 16% lower than a year ago. The Kitsap County 3 month moving average median price is about the same as it was a year ago. The 3 month moving average for Bainbridge Island's number of closed sales is 12% higher than a year ago. The 3 month moving average of closed sales is down 12% Countywide from a year ago. The 3 month moving average number of Bainbridge pending sales in March was down 7% from a year ago. The number of active listings on Bainbridge (166) rose 4% from February and is about 14% lower than a year ago.  The inventory turnover (total homes on the market divided by number sold last month) is 5.9 months, much better than the 11.4 months in February and also faster than the 8.8 months of a year ago. Bainbridge Island is a buyer’s market.

Reposted From http://bprowse.com/bainbridge_island_market

This is an archive copy of our March Newsletter.

US unemployment finally appears to be starting to improve, the unemployment rate dropping last week to 8.9%. A projection by the Congressional Budget Office (below) shows an expected gradual improvement of about 1% per year over the next 5 years. Many aspects of our economy are improving, as evidenced by improvements in truck tonnage, rail shipments, industrial production, personal consumption expenditures, and GDP measurements. Still America’shousing market remains in low gear, with new home sales near historic lows, residential inventory high, and sales volume and prices falling. Though the number of new mortgage defaults appears to be dropping, there is still a large shadow inventory of distressed properties not yet for sale or in foreclosure.

Government efforts to provide relief for distressed property owners have for the most part fallen short, though there are currently negotiations between states attorneys general and mortgage servicers to determine changes in mortgage servicing to prevent further foreclosure documentation problems. Last month the Department of the Treasury released their plan to reform housing finance, including the eventual unwinding of Fannie Mae and Freddie Mac, the agencies that currently purchase and securitize most of the loans to purchase residential real estate. Among other provisions, the plan to wind down these agencies is scheduled to reduce the conforming loan limits by October 1, 2011. FHA loan limits are to be reduced at the same time to ensure that buyers requiring larger loans do not switch to FHA. Another aspect of financial reform is for banks to implement the Basel III Capital Accords by substantially increasing the amount of capital (equity) they hold on their balance sheets. Within the US, a number of prominenteconomists continue to press for a stricter standard than agreed in Basel III, in particular that much higher capital requirements are necessary to eliminate the problem of “too big to fail”.

All of these factors, plus the turmoil in the Middle East and rising oil prices, have left buyers and sellers in our local markets uncertain of future trends and reluctant to commit to real estate purchase contracts. Though few buyers are moving forward, a  survey discussed on the John Burns Real Estate Consulting web site shows that 88% of 10,000 buyers surveyed thought that now was a good time to purchase a home, as well as describing some things current buyers are hoping to find in our market. 

The number of closed sales in Kitsap County in February rose slightly, up about 3% from January and up about 4% from a year ago. This small improvement still leaves the number of closed sales down about 35% from an average month last year. Pending sales rose about 10% compared to last month but were 16% lower than a year ago. In January, there were 131 closed sales and 238 pending sales. In February there were 135 closed sales and 261 pending sales. 30% of the closed sales were distressed properties. 46% of the pending sales were distressed properties. In 2010, 25% of all closed sales were distressed properties, so we are seeing more distressed sales now than previously. Shown below is a graph of month-by-month pending sales vs closed sales. Pending sales tend to lead closed sales in direction if not magnitude by about 2 months. Based on past trends, we expect the number of closed sales to rise next month.

Residential Highlights

Kitsap County's residential inventory in February (1412 listings) is about 1% higher than January and about 9% lower than a year ago. So far inventory is not coming back on the market as quickly as last year. Distressed properties listed in the MLS make up about 22% of our market, up from 21% we reported last month.  At the end of February, RealtyTrac showed 1207 Kitsap County homes either in default, in foreclosure, or bank owned (down considerably from 1462 last month - this is progress we haven’t seen previously). The MLS shows only about 26% of the distressed property inventory, so there could be as many as 898 distressed properties that have yet to be put up for sale. The good news here is that the shadow inventory now looks like it’s begun to shrink. Closed sales were up 4% compared with February 2010. The more stable 3 month moving average number of Kitsap County closed sales is down 7% compared to a year ago. We expect the three month moving average to drop somewhat next month because December closed sales were brisk, whereas January and February closed sales have been uniformly dismal.

Prices are steady...

Kitsap County’s monthly median closed sale price in February ($250,000) rose about 4% compared to January, and is 1% lower than a year ago. The more stable 3 month moving average (see graph below) of the median closed sale price ($241,998) is about 3% higher than last month and is about 1% higher than a year ago. Looking beyond the market ups and downs caused by the federal tax incentive programs, home prices have been level or slightly declining over the past year. The current low median price coupled with still low interest rates offers good affordability. Conventional mortgage rates are now at 4.88% for 30 year loans, about the same as last month. 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 February median list price remained at $280,000, about the same as the last 2 months. Median list prices have fallen about 9% over the past year as sellers have became more aggressive in getting their properties sold.   The County has a listing inventory turnover rate of about 10.5 months, about the same as  the 10.7 month turnover in January. Inventory turnover is the number of months it would take to sell the current inventory at the current rate of sales. In February, both the number of listings and the number of sales remained close to what they were in January. 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. There were 3 sales in the $700k and above range among 119 listings County wide. 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 February was down 16% compared to a year ago and was up about 10% from January. The statistics for February 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.

Affordability

We assume that a buyer making the median family income puts 20% down on the median priced home and obtains a 30 year fixed rate mortgage. We assume that a first time buyer making 70% of the median income puts 10% down on a house priced at 85% of the median and obtains a 30 year fixed rate mortgage with mortgage insurance.  We assume that both buyers can afford to spend a maximum of 25% of their monthly income on the principal plus interest of the loan. Using the annual averages of median price, median income, and average annual 30 year fixed interest rate since 2001, we plot an affordability index equal to the maximum affordable payment divided by the actual payment. When the index is greater than 1, the loan is affordable to the typical buyer. When it is less than 1 some buyers cannot afford to purchase. Mortgage insurance quotes are dependent on credit scores - MI for a FICO credit score of 700 might be $20 per month higher than MI for a credit score of 750. We use 750 and have corrected all PMI values to be consistent with this. Our numbers for 2011 are estimates using the latest monthly data for median prices, interest rates, and median income. As a point of reference the index in 2001 was 1.31 and the first time buyers index was .89.

The affordability index fell to 1.19 in March from 1.24 in February. Interest rates remained about the same but median price rose from 239,995 to 250,000. First time buyer affordability also lowered to .80 from .83 in February. Below is a  graph of the year-to-year changes in affordability and a second graph showing month-to-month affordability over the past year.

March’s APR is 5.065% on a 30-Year and 4.573% on a 15-Year, both conforming. February’s APR was 5.065% on a 30-Year and 4.573% on a 15-Year, both conforming. If you qualify for FHA, VA, or USDA loans , these programs have are attractive for low downpayment buyers. The conventional and FHA loan limits remain at $475,000 in Kitsap County. These higher limits have helped sales of higher priced homes. The VA loan lender imposed limit is back to $417,000. A typical 30 year fixed jumbo APR (with total costs of the loan, not just the rate factored in) is 5.390% on one major bank web site - same as last month. You should also check with local credit unions and savings and loans for jumbo loan rates. To check the daily rate you can contact your lender or preview web sites such as this one - http://bankrate.com/.

Homes in Silverdale were selling for a February median price of about $270,000,  6% higher than a year ago and unchanged from last month. Silverdale's more stable 3 month moving average median closed sale price was $256,667, 2 percent lower than last month and 1% higher than a year ago.  The Kitsap County 3 month moving average median price is about 1% higher than it was a year ago. The 3 month moving average for Silverdale's number of closed sales the same as a year ago. The 3 month moving average of closed sales is down 7% Countywide from a year ago. The 3 month moving average of Silverdale pending sales in February was the same as a year ago. The number of active listings in Silverdale (94) is 31% higher than a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 18.8  months,  much slower than the 8.4 months reported last month and about the same as the 18 month turnover of a year ago. Silverdale is  a buyer's market.
 

Reposted from http://bprowse.com/silverdale_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 February median sales price for Poulsbo was $274,874, down about 6% from a year ago and down about 16% from last month, when the median spiked to $327,000. The more stable three month moving average closed sale price was $296,791, about 7% higher than a year ago.  The Kitsap County 3 month moving average median price is about 1% higher than it was a year ago. The 3 month moving average number of closed sales in Poulsbo rose 15% from a year ago. The 3 month moving average of closed sales is down 7% Countywide from a year ago.  Poulsbo’s 3 month moving average of pending sales rose 7% from a year ago. The Poulsbo listing inventory (111) is 25% higher than a year ago but down 6% from last month. The inventory turnover (total homes on the market divided by number sold last month) improved somewhat to 10 months compared to the 13.1 months reported last month, and is a little better than the 11.1 months reported a year ago. Poulsbo is a buyer’s market.
  

Reposted from http://bprowse.com/poulsbo_market

Statistics here are for Kingston, the largest of the remaining housing markets in North Kitsap. Activity in Kingston should be representative of the other nearby communities. Kingston homes were selling for a month end median price of about $194,000 at the end of February, 35% lower than a year ago and 15% lower than last month. Because of the relatively lower sales volume in Kingston, a couple high priced sales (or lack thereof) can make a big change in the statistics but may not mean much of change in the market. The more stable 3 month moving average ($215,217) of closed sale price is 27% lower than a year ago.  We have low inventory and few sales. The Kitsap County 3 month moving average median price is about 1% higher than it was a year ago. The 3 month moving average of Kingston closed sales fell 27% from a year ago, while the number of pending sales fell 50% from a year ago. The 3 month moving average of closed sales is down 7% Countywide from a year ago. The number of active listings in Kingston (42) is down 37% from a year ago - very low. The inventory turnover (total homes on the market divided by number sold last month) is 10.5 months, slower than the 6.3 month turnover reported last month but somewhat better than the 11.2 month turnover of a year ago. Kingston is still a buyer's market.
  

Reposted From http://bprowse.com/north_kitsap_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 $150,000 at the end of February, 11% lower than a year ago and about 15% higher than last month. The more stable 3 month moving average median price ($147,833) was about 2% lower than a year ago and less than 1% lower than last month.  The Kitsap County 3 month moving average median price is about 1% higher than it was a year ago.  Bremerton's 3 month moving average for number of closed sales is 19% lower than a year ago and 20% lower than last month. The 3 month moving average of closed sales is down 7% Countywide from a year ago.  The 3 month moving average number of Bremerton pending sales is down 28% from last year. The number of Bremerton active listings (111) is 29% lower than a year ago. The inventory turnover (total Bremerton homes on the market divided by number sold last month) is 7.4 months, much faster than the 12 month turnover last month and but better than the 9.2 month turnover a year ago. The Bremerton market is a buyer’s market.
  

Reposted from http://bprowse.com/bremerton_market

Bainbridge Island residential properties were selling for a February median price of $505,625, about 12% higher than in January and 24% lower than a year ago. The more stable three month moving average closed sale price fell less than 1% from last month to $503,375 and is 12% lower than a year ago.  The Kitsap County 3 month moving average median price is about 1% higher than it was a year ago. The 3 month moving average for Bainbridge Island's number of closed sales is 6% higher than a year ago. The 3 month moving average of closed sales is down 7% Countywide from a year ago. The 3 month moving average number of Bainbridge pending sales in February was up 4% from a year ago. The number of active listings on Bainbridge (160) fell 2% from January and is about 11% lower than a year ago.  The inventory turnover (total homes on the market divided by number sold last month) is 11.4 months, a little slower than the 10.9 months in January but a little faster than the 13.9 months of a year ago. Bainbridge Island is a buyer’s market.

Reposted from http://bprowse.com/bainbridge_island_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 January median sales price for Poulsbo was $327,000, up about 14% from a year ago and up about 13% from last month. The more stable three month moving average closed sale price was $277,109, about 8% higher than a year ago.  The Kitsap County 3 month moving average median price is about the same as it was a year ago.  The 3 month moving average number of closed sales in Poulsbo fell 20% from a year ago. The 3 month moving average of closed sales is down 18% Countywide from a year ago.  Poulsbo’s 3 month moving average of pending sales rose 23% from a year ago. The Poulsbo listing inventory (118) is 48% higher than a year ago. Unlike most areas - inventory has been building in Poulsbo. The inventory turnover (total homes on the market divided by number sold last month) slowed to 13.1 months compared to the 6.4  months reported last month, and also slower than the 6.2 months reported a year ago. Poulsbo is a buyer’s market.

Reposted from http://bprowse.com/poulsbo_market

Statistics here are for Kingston, the largest of the remaining housing markets in North Kitsap. Activity in Kingston should be representative of the other nearby communities. Kingston homes were selling for a month end median price of about $228,500 at the end of January, 36% lower than a year ago but 3% higher than last month. Because of the relatively lower sales volume in Kingston, a couple high priced sales (or lack thereof) can make a big change in the statistics but may not mean much of change in the market. The more stable 3 month moving average ($222,217) of closed sale price is 35% lower than a year ago.  With very low inventory and few sales, the fall in median price tells more that only low priced homes are selling rather than that prices across the board have fallen that far. The Kitsap County 3 month moving average median price is about the same as it was a year ago. The 3 month moving average of Kingston closed sales fell 30% from a year ago, while the number of pending sales rose 50% from a year ago (from 4 to 6, just to keep in mind the low sales volume in North Kitsap). The 3 month moving average of closed sales is down 18% Countywide from a year ago. The number of active listings in Kingston (38) is down 36% from a year ago - very low. The inventory turnover (total homes on the market divided by number sold last month) is 6.3 months, about the same as the 6.2 month turnover reported last month and much better than the 14.8 month turnover of a year ago (2 more sales but also far fewer listings to sell) . Kingston is still a buyer's market.

Reposted from http://bprowse.com/north_kitsap_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 $130,000 at the end of January, less than 1% higher than a year ago and about 21% lower than last month. The more stable 3 month moving average median price ($148,650) was less than 1% lower than a year ago and 6% lower than last month.  The Kitsap County 3 month moving average median price is about the same as it was a year ago.   Bremerton's 3 month moving average for number of closed sales is 15% lower than a year ago and 12% lower than last month. The 3 month moving average of closed sales is down 18% Countywide from a year ago.  The 3 month moving average number of Bremerton pending sales is down 24% from last year. The number of Bremerton active listings (108) is 28% lower than a year ago. The inventory turnover (total Bremerton homes on the market divided by number sold last month) is 12 months, only half as fast as the 6 month turnover last month and but better than the 15 month turnover a year ago. The Bremerton market is a buyer’s market.

Reposted From http://bprowse.com/bremerton_market