Carole’s Blog

 

The number of pending home sales–sales negotiated but not closed–is gradually improving, with September’s sales just 10% down from last year. This is an improvement after numbers have run a negative 13-58% all year.

 

County-wide pending sales were up 22% last month and Western Washington figures were up 4.1% from a year ago.

 

Gig Harbor’s higher value homes are keeping sales a bit lower but that is expected to change as the national rescue plan makes money less expensive for homes financed above $572,500. Recently the spread between interest rates for conforming and jumbo loans has been as much as 2 ¼%. Traditionally the difference has been less than 1%.

 

Other areas in the county reflective of fewer sales include Steilacoom and Dupont. Dupont’s sales come from new construction and builders have cut back to fit market conditions. The homes around Lakewood’s lakes have also seen a drastic slowdown in sales recently…for the same reason as Gig Harbor.

 

Dissecting sales currently pending, including new homes that were “pre-sold” and negotiated as long as six months ago, provide some interesting facts. This represents data from the Multiple Listing Service for both Gig Harbor and Key Peninsula as of October 26 for single-family homes.

 

Sales price range	Quantity
Less than $199,999	10
$200,000-249,999	6
$250,000-299,999	11
$300,000-$349,999	12
$350,000-399,999	8
$400,000-449,999	2
$450,000-499,999	2
$500,000-549,999	1
$550,000-599,999	1
$600,000-649,999	5
$650,000-699,999	1
$700,000-1,499,000	2

 

Most of the sales fall into the expected pattern—bunched under $400,000. Interestingly though, there is a bulge in the $600,000-649,999 category. This represents a selling price range where the buyer can borrow less than $572,500, utilize a 10% down payment, and receive the best interest rate. Characteristics of this bulge are varied…two salt waterfronts, one lakefront, two new homes and two distressed sales, obviously with some overlaps.

 

 

Of these 61 pending home sales, over one-quarter—17–are in the area north of Gig Harbor, which includes two new neighborhoods…Harbor Crossing and Quadrant’s Ridge at Gig Harbor. 10 of these are in the Ridge where Quadrant just announced it will start building one level homes and homes with the master bedroom on the main floor. This should hold appeal to a different blend of buyers than the current inventory does. Bennett Homes, one of Harbor Crossing’s builders, is sitting with all unsold inventory and Little Boat LLC has sold nine since opening in 2007. There are no pending sales in Harbor Crossing at this time.

 

18 or nearly 30% of the sales are new construction, distributed throughout the price ranges, with nearly all sales in Gig Harbor North and in Key Peninsula.

 

Salt waterfront is represented with five sales and lakefront another two.

 

Distressed homes—a home foreclosed and owned by the lender or a home in default that needs lender approval to sale—represent 26% of the sales. While this is more than the local area has experienced previously, it is not as bad as the nation-wide picture of 35-40% of sales. Distressed sales put pressure on house prices because many are sold at discounted prices.

 

This is probably the single largest factor currently driving the drop of sale prices. This should improve as the national rescue plan provides avenues for owners to refinance and not default. As the number of these sales diminishes, other owners will not face the discounted prices for competition. These homes run the gamut of price ranges, from $120,000 to $670,000.

 

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.