Home sales quietly improved in May as negotiated contracts (pending sales) showed a more modest 20% decline from 2007 than they have the past several months. April was down 48.8%.
Listing inventory also improved. 33% fewer homes were listed in May than in 2007. When inventory decreases, there is less downward pressure on prices. When home inventory increases above a seven month supply the market is considered a buyer’s market–today there is a 12 month supply.
Closed sales declined 35.7% for Gig Harbor and Key Peninsulas combined, but pending sales from May could indicate more closed escrows in June and July. Caution should be applied to this uptick, because it is only a single month of improvement. In today’s volatile financial marketplace, buyers are not always able to secure necessary financing. In early July, I will review market statistics for homes that closed January to June.
I am separating statistics for homes that closed in May for Gig Harbor and Key Peninsula, information not necessarily easy for residents to access.
Year-over-year change
- Gig Harbor - 40% (83/50 sales)
- Key Peninsula - 45% (42/23 sales)
- Pierce County - 42.1%
The graphs show median prices (half the homes selling above and half selling below this price) have dropped only 4% from May 2007 in Key Peninsula but a whopping 13% year-over-year in Gig Harbor. January to May median prices are down about 5% so May’s figures reflect a current steeper descent for Gig Harbor.
The mix of home prices and the availability of affordable homes are driving some of these statistics. The median price in Key Peninsula is $230,000 but $424,000 in Gig Harbor. Gig Harbor is being hit on the higher end where sales are stagnant with inventory of 350 homes over $650,000 and only six sales in the past month. And the higher price of gas is likely affecting sales in Key Peninsula.
These graphs provide perspective to the time (2002/2003) when median prices were more in line with inflation and were bought for reasons other than investment only. Key Peninsula saw a hefty price jump in 2005 though when new construction began there in earnest. Otherwise, median prices have been more moderate.
Buyers are likely to buy, if they can, over the next few months. Inflation fears are nudging interest rates up to the 6.5% range for 30 year loans under $567,500 and Federal buyer incentive programs are due to sunset in December.
Information is from NWMLS.
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