Carole’s Blog

Gig Harbor straddles areas poised for housing growth

Before I get to my headline…

Next week I will report on August figures for Gig Harbor home sales which appear to be an improvement over July’s anemic closings. We are set to close on target or better than 2009, with pending sales starting to flow as well. Sales include a couple more closings over 1m.

Sellers are in lock-step with nation-wide economic news though, as over 250 residences were reduced in price during the month. More next week…

Now for some good local news…

Often Gig Harbor home sales do not follow county or regional trends.  While July figures were down throughout the region and Gig Harbor, inventory did not build in Gig Harbor as in other areas.

 And for some even better local news…

Washington State–specifically Tacoma and Bremerton-Silverdale–are poised to have some of the strongest housing markets by 2014. Earlier this month Businessweek.com released a forecast of the U. S housing market, prepared by Moody’s Economy.com and the information firm Fiserv.

Bremerton-Silverdale housing prices are expected to increase 44.7% over the next four years or 9.7% annually. The area has experienced a 20% drop from the 2007 boom year. The area’s heavy military presence has kept unemployment at 7.2%, compared to 9.5% nationally, and only a fraction higher than last year. Median family income is $69,900.

The area attracts buyers looking to live close to Seattle at a lower cost in a great natural setting. The same thing can be said of Tacoma, which the study predicts will be Washington’s second strongest market with a 33.1% price gain. 15% of that is predicted to occur by 1^st quarter 2012. Tacoma’s median family income is a tad lower than Bremerton at $66,200.

Gig Harbor is blessed to be straddling these two metro areas, offering some of the best schools, great parks and recreation, panoramic views, proximity to Seattle and probably the most picturesque small waterfront city in the Northwest.

Housing supply and demand in Washington, Oregon, New Mexico and Utah are in balance, according to the research, and are most likely to be undersupplied in another two years.

Carole Holmaas is a Broker with Windermere Real Estate, licensed since 1968. She specialized is waterfront and view properties and may be reached at 253.549.6611 or at Carole@ISellGigHarbor.com

Sales of Gig Harbor Waterfront look a lot like 2009

With 10 Gig Harbor waterfront sales written in July, the year is shaping up to look not as good as 2009 but not as bad as 2008—which was the worst for sales of Gig Harbor waterfront homes for decades.

Only 26 homes have closed escrow in 2010 through July. Nine of those were in June which gave waterfront Brokers signs of encouragement. But July turned around and brought only five closings. Closed sales numbered 30 at this point in 2009, with 51 sales, and 22 in 2008 when the year finished with only 40 sales.

101 sales is the average yearly number from 1998 through 2005 (just prior to the market peak when sellers “hung on” to their homes with expectations they would continue to increase in value). This number was consistent even during the recessionary early years of this decade. So 40 sales of Gig Harbor waterfront homes is abnormally low. And in 2009 when many of the high-end sales were cash, because of non-existent jumbo financing–sales barely topped 50.

Three of the July closings have been listed for 1578 days, 700 days and 537 days, respectively.

Nearly half of the current inventory of Gig Harbor waterfront homes is listed over $1,000,000. The median price is $625,000 in Key Peninsula. Normally Key Peninsula attributes one-third of all sales. This year their share is closer to one-fifth of sales.

Additionally, there is a fair amount of “shadow inventory”. These are sellers who would list their homes if the inventory wasn’t already so high…or those who have become discouraged and taken their homes off the market for a period of time. These “pent-up sellers” create something we call “shadow inventory” and they will enter the market once sales activity improves, thereby applying downward pressure on prices.

In my weekly snapshot of Gig Harbor waterfront market conditions that I prepare for my sellers and it is notable that four to six sellers have reduced their prices each week since the first of the year.

Carole Holmaas is a Broker, specializing in Gig Harbor Waterfront sales,  at Windermere Real Estate, licensed since 1968. She may be reached at 253.549.6611 or Carole @ISellGigHarbor.com.

Gig Harbor waterfront sales get slow start

Sales volume is down in all price ranges and Gig Harbor waterfront is no different. Half or more of all the sales for a specific calendar year are finalized by June 30, according to data for this past decade.

There are 17 Gig Harbor waterfront homes closed to date. If three more close by June 30 it will tie the last two years. In 2009 51 waterfront homes closed for the year, up from a dismal 40 the year before–but down from 100-114 in the years 1998-2005

If everything “pending” closes by the end of July Gig Harbor waterfront will be on track with 2009 statistics. This includes nine properties written during June, historically the best month for generating a waterfront sale, followed by March, January and April.

Assessed value has not played a major part in buyer’s offers previously but now it has become one more bit of data that buyers may use in negotiations. And unfortunately, Gig Harbor waterfront assessed values have dropped for the 2010 assessment (and 2011 taxes) 4-8% just this last week. But this is less than the average of 9.55% for all properties.

Sellers have been reducing their offering prices since early spring. Nearly 5% of all waterfront sellers have reduced their listing prices weekly. Most Realtors know that waterfront buyers desire to be relocated on the property they are purchasing to enjoy Gig Harbor waterfront prime summer months of July and August. To supply perspective to sellers’ motivation– the fact is that in the last two years only 25-30% of all sellers desiring to sell have been successful in selling. So there is a huge “pent-up demand” by sellers.

The median price of Gig Harbor waterfront homes selling this year is up substantially from 2009. Half of the homes have sold above $880,000 and half below. Last year this number, with virtually no “jumbo” financing available, was $682,500. Here is the big HOWEVER, the sales contracts written, but not closed, show a median price of $672,000. And that median is list price—not sales price. The median sales price will be less.

Sold homes are taking, on average, more than a year to sell.

For buyers, with interest rates hovering near 4.5%–lowest since the 50’s, and with wonderful inventory in all price categories of no, low, medium, and high bank waterfront to pick from—this is an opportunity of a lifetime. In Gig Harbor half of the homes are listed below $950,000 and half above. In Key Peninsula the mid-point is $525,000.

Carole Holmaas is an Associate Broker at Windermere Real Estate, licensed since 1967, specializing in Gig Harbor waterfront and view properties. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her achieved blog may be read at http://blog.ISellGigHarbor.com

Gig Harbor home prices show modest sustainability

Gig Harbor home prices are continuing to sustain modest increases a third of the way into 2010, although down from March’s high of $432,000. It was evident that the March figure was an anomaly and could not be sustained; it reached back to prices the first half of 2007.

Gig Harbor home prices are up 7.2% to $385,000 over April 2009. April is the eighth of the last 10 months to show improvement year over year. Gig Harbor includes both the Gig Harbor peninsula and Fox Island.

Prices are shown in $000’s

A wide spectrum of prices sold in April—over half below $400,000 but 27% of the sales were over $500,000, including two over $1million. I expect we will start to see higher Gig Harbor home prices as a more “normal” market takes over from the first-time buyer market dominating the last few months.

However I expect the number of sales to drop off some now that the first-time buyer incentive has expired. Sales of Gig Harbor homes have been better than 2009 for five of the last six months.  April sales were up 34% over 2009 and 2008. Much of that activity was driven by first-time buyers as well as favorable interest rates.

With the global economy in distress, interest rates are now predicted to stay low for the remainder of this year. Unfortunately the substantial volume of foreclosures will continue to keep Gig Harbor home prices down—a trend likely to persist into 2011 or beyond.

Inventory continues to drop—last month down 4% from a year ago and 17% from two years.

The chart shown for Gig Harbor home prices includes both single family and condos.

 

Carole Holmaas is an Associate Broker at Windermere Real Estate and licensed since 1967. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her posts on real estate conditions may be read at http://blog.ISellGigHarbor.com

Key Peninsula home prices slump in March

While sales numbers are up 155% from February and 77% from March 2009, Key Peninsula home prices are the second lowest in more than four years.  The median sales price was a meagerly $176,000 last month…but the current listing price is nearly double that price. The median price is the halfway point between all the sales.

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These figures include all Key Peninsula zip codes—part of the Gig Harbor multiple listing service area.

Only two of the 18 homes that closed escrow exceeded $250,000…one at $250,000 and the most expensive home at $340,000.

This is a reversal of the stability Key Peninsula home prices saw up through second quarter 2008…and a reversal of the price increases in October and November’s closings when the median sales price reached $250,000.

Four of the seven lowest sales price months for Key Peninsula home prices have come in the past seven months.  

I suspect this downward price movement is directly related to the many eager first-time buyers using the last of the tax credit. Buyers can find more qualifying homes in Key Peninsula, rather than Gig Harbor. Buyers had to be under a binding contract by the end of April to qualify but closings can still take place up to June 30. After the end of April, the market should swing from first-time buyers to a more balanced group of buyers. This should bump Key Peninsula home prices up a bit…unless the market is flooded with a new surge of foreclosed and bank-owned homes.

On a positive note—absorption rate—the number of months supply of homes for sale, based on the number of sales the previous month, stands at just 10 months which is slightly better than the Gig Harbor peninsula’s 12 month supply.

Carole Holmaas is an Associate Broker, licensed since 1967, at Windermere Real Estate. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her postings may be followed on http://Blog.ISellGigHarbor.com and Twitter.

Gig Harbor WA Salt Waterfront Home at Wollochet Bay for Sale.  88 feet lower-bank waterfront, with a hint of Mt Rainier view,  plus a 2-party shared nearly new dock is the setting for this 5-year old 3412 sf well-bred traditional salt waterfront home for sale. The open plan is surrounded by windows, elegant touches & spacious glass-enclosed entertainment deck.

Dramatic fireplace, a chef-sized kitchen with double ovens and beautiful granite and glass tile accents, study with handsome coffered ceiling and spacious entrance hall. The main floor master suite is highlighted with raised fireplace, a very spacious walk-in closet & “spa-like” bath with jetted bath. There is a 2nd bedroom and bath on the entry floor. The lower floor offers 2 additional bedrooms, bonus room with large wetbar with 2nd fireplace, bath, hobby room and second utility room.

Beautiful landscaping completes this salt waterfront home for saleplus a triple car garage that is 32 feet deep—plenty of room of workshop or to pull the boat and trailer inside. The waterfront is bulkheaded with stone. Besides the private dock, there is a community boat launch and dock available to home owners. The home is on a sewer.

Call me at 253.549.6611 for more information about this or another salt waterfront home for sale or visit me at Windermere Real Estate in Gig Harbor.

It is likely Wollochet Bay is connected to a Native American word, which means “squirting clams”.  Native Americans fished and sold the fish to the European-American settlers and traded woven baskets.

Area residents have consistently demonstrated their strong commitment to provide a high quality public education to nearly 10,000 students. The district enjoys a statewide reputation for meeting the educational needs of today’s students who become tomorrow’s leaders. In addition, Gig Harbor has nearly a dozen private schools. 

The Harbor History Museum is located on Gig Harbor Bay and allows visitors a place to experience the history of Gig Harbor. The Museum is in the process of relocating to a new multi-million dollar facility, highlighted by the Shenandoah, a purse seiner built in a Gig Harbor shipyard and the Midway schoolhouse.

While Gig Harbor was once most known for its fishing and logging, it is now also known for its numerous art galleries, art walks and art shows. Two theatre companies in Gig Harbor provide entertainment including dinner theatre and summer outdoor theatre.

The Gig Harbor area is ideal for enjoying water-related recreation. Whether you prefer water skiing, power or sail boating, kayaking, fresh or salt water fishing, scuba driving, windsurfing, clamming, beachcombing or swimming, the secluded harbors provide excellent moorage and docking facilities.

There are four state parks. Boat ramps are located near the major bays. Gig Harbor operates a waterfront park, a park on Crescent Creek, a boat-building facility and a pioneer farm. Eight golf courses offer year-round golf close to Gig Harbor.

Numerous events are scheduled throughout the year, largely centered on the Gig Harbor waterfront, including farmers markets, outdoor cinema, Tuesday night music at the park, and lighted holiday boat parade.

Youth and adult baseball, basketball, football, gymnastics, dance, and soccer programs are provided through community organizations. Two local pools provide swimming opportunities for the community and swim clubs.

Gig Harbor home prices resume 4^th quarter ascent

March’s Gig Harbor home prices resumed 2009’s 4th quarter upward trend, with a substantial 30% increase from a year ago. March is the sixth month of the last nine showing year-over-year improvement and reverses the median price drop of the last two months. The current $432,000 sales price is actually the highest since 3^rd quarter 2007 but is not a price I would expect to be sustainable in today’s real estate market. Still though, it is good news—news that many home sales are closing with no relationship to the tax credit offered.

In fact Gig Harbor home prices included Fox Island’s $511,000, Gig Harbor North’s $479,000 and Kopachuck/Horsehead Bay’s $452,000—all above the median price for Gig Harbor as a whole.

Gig Harbor Home Prices - Median Sales Price

And sales of Gig Harbor homes jumped dramatically—50% over 2009…and even 10% over 2008. This is the ninth month of improvement year-over-year. A certain portion of the activity is still driven by the first-time home buyer tax credit so we might expect to see sales take a slight dip in the next few months as this credit is phased out.

Gig Harbor includes the zip codes of 98332 through 98335.

Absorption rate–the relationship of inventory to sales–is standing at a 12 month supply, at March’s sales rate…not bad considering Gig Harbor experienced supply as high as 28 months in late 2008.

The strongest segment in Gig Harbor home prices the past thirty days has been in the $400-450,000 range, a segment actually experiencing a seller’s market with a 3.8 month supply. Less than 5-6 months supply and the scales tip in favor of the seller. The $500-550,000 market is experiencing a near neutral market. 

 Inventory continues to drop–down 5.3% from a year ago. It is up 7.5% from February–typical for the time of year. More enthusiasm for listing is also being creating as sales numbers and prices boost.

­­­­­ Carole Holmaas is an Associate Broker at Windermere Real Estate, licensed since 1967. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her blog may be followed at blog.ISellGigHarbor.com 

March was positive for Gig Harbor home sales. Four major statistics show March provided positive news for Gig Harbor home sales. With median home prices the figures displayed a major change from January and February.

• The median sales price for Gig Harbor home sales rose nearly 10% from a year ago.  This brings the overall decrease for first quarter down to a negative 3.1%, compared to 2009 first quarter and is the highest since July 2009. March is a 17% improvement from February…the second lowest price in the past four years. Prices previously had shown a steady improvement throughout the second half of 2009.

• Gig Harbor home sales in March totaled 78, a 58% increase from a year ago, although down 36% from the real estate peak. These figures include both Gig Harbor and Key Peninsula. Next week I will provide a break down of the two areas. Primarily, sales were bulked in the $400-450,000 range—nearly 15% of everything closed. Another 25% of sales were over $500,000, including three over $1m. Six Canterwood homes sold, plus six condos, several view and two waterfront homes.

• Negotiated, but not yet closed sales…pendings…also increased—a 35% increase from last March.  Pierce County, as a whole, experienced an even greater increase…because prices for Gig Harbor home sales are less conducive to first-time buyers which have been fueling recent nation-wide home sales. Gig Harbor’s fewer first-time buyers might also impact Gig Harbor home sales less this spring when the tax credit is no longer available.

• Inventory has dropped which is a positive trend for future price increases. It is down over 5% from last year and down 12% from the height of inventory in 2008. Traditionally, high inventory months include June through August while March, May and June are the months that generate the most new Gig Harbor home sales.

Median Sales Price 2006-2010

Sales of Gig Harbor waterfront homes start slow in 1^st quarter

Sales of Gig Harbor waterfront homes have been scarce in the first quarter of 2010. Three have closed to date—the fewest number of sales for at least three decades of my record keeping–and lower even than 2009 figures.

There are about a dozen pending sales–negotiated but not yet closed sales—in the pipeline. But if those numbers don’t pick up, this promises to be a very slow year in sales of Gig Harbor waterfront homes.

Assessing closings over the past 13 years, the average number of first quarter sales is 14. And 20 is the average number of first quarter pendings. Last year April was a big month for sales written but the more than 125 waterfront sellers are going to be facing a very disappointing spring and summer at the rate of sales so far.

There are all the obvious reasons for this—bad economy, unemployment, lack of consumer confidence, loss of homeowner equity, and until now, almost non-existent financing for loans above $750,000.

However, in the past couple months, financing has loosened up for “jumbo” loans. But interest rates are available at ¼ to ½ percent more for a 30-year fixed rate loan. And loans can be found for less than 5 percent on a five-year fixed 1 year adjustable basis. 

The downside of financing though is the actual appraisal. Buyers need to plan for the possibility of paying for two appraisals to secure the loan. And even then many appraisers are not arriving at the agreed upon selling price and some sales fall apart.

First quarter sales ran the gamut—a bank owned home in Filucy Bay, starting well over $1m two years ago and selling for $460,000, a home on Forest Beach that includes a large beach house selling for $1,425,000 after nearly two years, and a property in Arletta including two parcels with an home slated for major remodeling and an off-water guest house for $1,250,000.

This table shows the increase and decline in median prices for Gig Harbor waterfront homes over the past six years:

2004        488,000

2005        680,000           40%▲

2006        850,000           25%▲

2007        900,000           6%  ▲

2008        800,000           11%▼

2009        683,000           15%▼

Buyers who are in the market for Gig Harbor waterfront homes will find the lowest prices for waterfront available since 2004 and 2005.  And probably the best interest rates in the foreseeable future. Traditionally the best months for offers for Gig Harbor waterfront homes are March to June.

Carole Holmaas is as Associate Broker at Windermere Real Estate, licensed since 1967. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her blog may be followed at blog.ISellGigHarbor.com 

New Gig Harbor home prices drop in 2009

New home prices for both Gig Harbor and Key Peninsula show a drop from 2008, but inventory is running very low also. At the current pace there is just a seven month supply of new homes. Last year at this time standing inventory stretched out to a 23 month supply.

The Gig Harbor home prices for sold new product have declined significantly since 2008. Gig Harbor’s median sales price is $505,000, with sitting inventory listed at $570,000. The Key Peninsula sales price is $265,000, with current inventory at $253,000. 

2009 stats are in—75 new homes sold in 2009–almost identical to 2008’s 72. This represents a 50% decline from 2007 and a huge 77% drop from the average in 2000-2006 of 212 homes each year.

The table below indicates Gig Harbor home price ranges of the 46 homes completed or under construction currently. These 46 homes is a drop of 33% from the 2008 inventory.

The average square footage is still high (although I believe we are seeing a changing trend toward smaller and smarter). The average six years ago was 2543 and eight years ago 2350.  Today it is 2533 in Key Peninsula but 3237 in Gig Harbor. The bedroom count is about evenly split between three and four bedrooms.

Last year in February we were struggling through a 23 month supply of new homes, at 2008’s selling pace. This year that is shrunk to seven months.

Other trends to watch—close-in lots are in higher demand, lots are becoming smaller and lots are more expensive to develop. There is standing inventory of about 400 lots in subdivisions in the process of selling but after that there is going to be severe pent-up demand for new homes. The mid point for new homes available in Gig Harbor is the mid $500’s—just a year ago the mid point was over $700,000.

11 of the new homes were sold as “bank-owned” and they currently represent five of the homes for sale.

Carole Holmaas is an Associate Broker at Windermere Real Estate in Gig Harbor, licensed since 1967. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her blog may be followed at blog.ISellGigHarbor.com.