June continues to repeat the history of the last 12 months and closes with the fewest number of sales contracts written in the month in more than a decade of record keeping. 10 of the past 12 months garnered the same results—the fewest in 10 years. Specifically, new contracts are down 12% from a year ago and 32% from two years ago.
Home sales however quietly improved in both May and June as May’s negotiated contracts reflect a more modest 20% decline from May 2007…a turnaround from the 40% to 50% slide each month since January.
Realtors use written sales contracts or “pending sales” as an indicator of the most current market activity. However, they are experiencing some of the highest rate of “fall out” in history. In today’s volatile financial marketplace, even after buyer and seller have negotiated the terms of the sale, buyers are not always able to secure financing. And appraisals, in some cases, are coming in lower than agreed-to sales prices.
The strongest segment of the Gig Harbor market is under $300,000 but there is no seller’s market or even a “neutral market” where supply and demand are in equilibrium. In Key Peninsula the strongest range is $300,000-400,000. There each segment over $500,000 is represented by only one sale and low inventory, reflecting in an unusually high percentage.
BUYER OR SELLER MARKET?
The lower the percentage the more that price range is a buyer’s market
Price Range Gig Harbor Key Peninsula
<$300,000 14% 12%
$300-399,999 7% 17%
$400-499,999 7% 8%
$500-599,999 11% 11%
$600-699,999 5% 0%
$700-799,999 3% 16%
$800-899,999 5% 0%
$900-999,999 0% 0%
$1-1,499,999 3% 0%
$1,500,000> 0% 0%
.
1-44% = buyer’s market
45-54% = neutral market
55-100% = seller’s market.
Percentage is derived by dividing number of pending sales by number of listed homes
Buyers are likely to buy, if they can, over the next few months. Inflation fears are nudging interest rates up—currently in the 6.25% range for 30 year loans under $575,000. Buyers want to take advantage of still attractive rates. Plus Federal buyer incentive programs are due to sunset in December.
Next week, I will review market statistics for homes that closed escrow in June. This will include the current absorption rate.
Carole Holmaas is an Associate Broker at Windermere Real Estate, licensed since 1967. She may be reached at Carole@ISellGigHarbor.com or 253.549.6611