Carole's Blog

Existing Gig Harbor home prices take jump. My past reports of year-over-year drops for Gig Harbor home prices may be behind us for now. Existing Gig Harbor home prices are up over 11% for the November-January quarter, over a year ago, for Gig Harbor/Key Peninsula combined. And one home sale just closed for $3,600,000—the first sale over $3 million for nearly five years.

Existing Gig Harbor home prices— median

• Gig Harbor ↑ 5.3% quarterly
• Key Peninsula  ↑ 3.9% quarterly
• Pierce County ↑8.4% quarterly
• Gig Harbor/Key Peninsula  volume ↑ 19% quarterly (12.5% annually)
• Inventory ↓17% from a year ago

New Gig Harbor home prices–median

• Gig Harbor/Key Peninsula  ↓ 42% quarterly
• Gig Harbor/Key Peninsula ↓ 22.5% from 2010
• Gig Harbor/Key Peninsula volume ↑ 250% quarterly (40% annually)

An interesting sidebar to our trending Gig Harbor home prices is new construction.  Nearly all of Gig Harbor’s current construction is in Gig Harbor North…Quadrant and Rush. New construction accounts currently for less than 10% of all sales, with the median price hovering under $300,000. In 2010 the median price was $470,000 and in 2011 $330,000. This year’s median price computes to a 13% drop in price from 2011…and 39% for the year before.

Gig Harbor’s new construction pricing will be a drag on the combined new and existing median price, at least for a while. For a better perspective of the trending market for Gig Harbor home prices going forward I will separate these two.  Sellers have more interest in resale prices while buyers watch both new and existing prices as they make their buying decisions.

Two of the county’s other major new home areas have experienced an increase in sales price, compared to Gig Harbor home prices; at the same time new construction is a larger portion of their overall sales. In Puyallup roughly 25% of sales are new homes with prices up 4.7% quarterly from a year ago.  New homes in Bonney Lake account for about 16% of sales and prices have increased 8.8% for the same period.

The price differences can be explained, in part, that during the economic downturn builders in the east side of the county were able to take advantage earlier of bank foreclosed plats, with drastically reduced lot prices. Builders passed lower lot costs on to their consumers. Banks took longer to foreclose on builders/developers in Gig Harbor and the current inventory is now reflecting those lower lot prices and thereby Gig Harbor home prices. Six years ago Gig Harbor had a bevy of small builders building high-quality product on larger lots. Currently most of those builders are gone and only the corporate builders remain, building on smaller Urban Growth Area (UGA) size lots.

This may change slightly as two builders have purchased lots in two uncompleted subdivisions and will likely be building in the $450-550,000 range.

Gig Harbor home prices end 2012 on a high note! The statistics say it all…Gig Harbor home prices are making a “comeback.” Let’s check off the changes in the median sales price (half the sales above and half below this price). Nearly all signs are UP.

GIG HARBOR/FOX ISLAND PRICES

• ↑ 3.7% 4^th Qtr 2012/2011
• ↑ 5.3% Dec  Y-O-Y
• ↑ 2.9% Dec over Nov
• ↓ 20% 4^th Qtr 2012/2006

KEY PENINSULA PRICES

•   ↑ 10% 4^th Qtr 2012/2011
•   ↑ 19% Dec Y-O-Y
•   ↑ 32% Dec over Nov
•   ↓ 13% 4^th Qtr 2012/2006

Gig Harbor home prices are 3.7% higher for the 4^th quarter over the prior year and Key Peninsula sales prices have improved 10% in the same year-over-year period.

Gig Harbor and Key Peninsula sales prices in 2011 decreased three out of every four months from 2010. While the same was true for Gig Harbor home prices most of the first half of 2012 the market recovered faster and stronger for Key Peninsula. But by summer Gig Harbor home prices stabilized as well.

Gig Harbor is now down only 20% for 4^th quarter from the housing boom period in 2006 for a median price of $340,000.  Key Peninsula is down 13% for a sales price of $218,000.

Sales numbers have come roaring back too, with each of the last five months marking the most sales since 2005 in Gig Harbor.

In Gig Harbor home prices are currently down 20% from late 2006 and 12% from two years ago. This emphasizes just how much of a hit the last two years have been… until the past few months.

Inventory is down 15% in Gig Harbor and down 9% in Key Peninsula.  And pending contracts (accepted but not yet closed) are at some of the highest levels since the housing boom…up 83% in Gig Harbor and 120% in Key Peninsula. Brokers were busy right through the holidays as buyers who had been house hunting were eager to have a house under contract by year’s end.

Currently the local market is experiencing a “balanced market” overall. But the strong demand and low inventory does not bode well for buyers this spring. Buyers need to be ready to act when they find the right house and realize in many prices ranges it has become a seller’s market for Gig Harbor home prices. But for sellers who have wanted to sell and “move on” they should have the confidence it is possible if the house is priced right.

Gig Harbor home sales show steady progress!

Are we better off than we were five and six years ago? No, but we’re climbing out steadily. Here’s the evidence:

• Sales were up 27%  this last quarter compared to 2011
• Sales were down 19% this year compared to 5 years ago
• Inventory is down 13% from August 2011 and very close to 6 years ago
• Homes are taking 21% less days to sell than a year ago
• Pending sales are up 7% this quarter compared to last quarter
• Pending sales are up 10% for last 12 months compared to previous year
• Sale prices are running 94% of original list price
• Supply & demand—only 5.7 months’ supply—verging on a seller’s market
• Median sales price down 13% year over year
• Median sales price down just 4.7% this quarter over last quarter
• Median sales price down 32% this quarter from 6 years ago

Nearly all the signs are positive and have been for several months–enough to be a trend. We’ve slowed the decline in prices and the inventory is quite tight. These statistics are for Gig Harbor and Fox Island.

Evidenced locally, our Gig Harbor Soundview Windermere office had the best summer months for sales that we’ve had in five or six years. And new listings are only coming in at half the numbers of sales the brokers are making. Homes priced to be “in the market” rather than just “on the market” are selling quickly at all price ranges, often with competing offers. This is a nice “window of opportunity” for sellers who have been waiting to sell.

Waterfront is having its best year since 2007. It fairly exploded in last August and early September. September generally is about the third best month for sales.

With only 5.7 months’ supply of homes on the market we are clearly no longer in a buyers’ market. And we are sliding beneath the 6 month “normal” market into the range of a seller’s market. We’ve had as much as 32 months’ supply and it was even 9 months in July.

Aside from supply and demand, the ratio homes are selling for compared to their original list prices is up to 94%. We haven’t been this high since 2007 and we hit 76% in 2010 and 84% in 2011. These last two figures should be lessons to the buyers in the marketplace. The “killing” the buyers were able to make in the past few years is rapidly disappearing.

Our distressed home sales have dropped dramatically with only 10% of the market bank-owned or a short sale listing.

So…high sales volume, low inventory, fewer days on market, homes selling for closer to list price…Can a solid nudge in prices be far behind?

Carole Holmaas is a Broker at Windermere Real Estate in Gig Harbor, licensed since 1967 along with her husband John. She specializes in waterfront, view and golf course homes. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com

Gig Harbor home sales—something for everyone

• Local inventory ↓ 17% from 2011 –7.2 mo supply
• King/Sno/Pierce inventory    ↓ 42.65% from 2011
• Median price ↓ 1% Y-T-D –rate of decline slides
• Waterfront prices↑ 6% Y-T-D
• Nationally, price increase ↑3.5% not to 2016
• Local sellers’ market through $350,000 prices
• Local balanced market through $700,000 prices
• Washington REO inventory less than 2%

Gig Harbor home sales are trending with overall national figures. Sales–the first part of any housing recovery have come back with vigor. Prices–the second piece of the recovery is lagging. Both Gig Harbor and Key Peninsula have experienced as many positive as negative months this year–again typical nationally.

Prices are declining at a shallower rate than in past months. Both peninsulas are currently at second half 2004 prices for Gig Harbor home sales —improved  from 2003 prices  we experienced most of last year but still down 1% for the first half of the year.

The good news is that distressed Gig Harbor home sales have dropped 10% from the beginning of the year—another national trend. Short sales outnumber REO properties nearly 2-1. And currently distressed homes make up just 10% of the inventory.

Washington is fortunate to have a non-judicial foreclosure process which has cleared the backlog faster than in states where the courts make the determination. This leaves less shadow inventory in the wings as well. In fact Washington has less than a 2% foreclosure rate—one of the lowest in the country. Lenders are working more aggressively with homeowners on modifications and short sales.

An increase in Gig Harbor home prices depends on supply and demand. The supply side is down to seven-month inventory but prices haven’t spiked yet—largely because anticipation of surfacing foreclosed properties. We will know shortly if we need to factor in more than the current 2% into the market pricing equation for Gig Harbor home sales. Inventory in the tri-counties has dropped 42% from last year—the fifth largest drop in the nation.

So this summer is an excellent window for sellers—inventory is low and interest rates have never been lower. Home supply is down nearly 20% from a year ago and over 40% from the peak. It is truly a sellers’ market under $350,000 and a nicely balanced market up to $700,000.

There is a tremendous pent-up demand for sellers who want to move for employment, be closer to family or scale down in size. And there appears to be little reason to wait for price increases because the national prediction is it will take until 2016 for house prices to reclaim the 3.5% increase in value considered the pre-bubble “normal”.  Maybe a bit more down this year, up 1.3% in 2013 and 2.6% in 2014, is what the June Home Price Expectation Survey says.

Friday respected magazine The Economist, reported “America’s houses are now among the world’s most undervalued: 19% below fair value, according to our house-price index.” Another good reason to buy.

As I said at the beginning…there is something in Gig Harbor home sales news for everyone.

Good news is absent for Gig Harbor home prices. October sales figures gave mixed messages to buyers and sellers of both Gig Harbor and Key Peninsula. It hasn’t been this good to be a home buyer in nearly eight years. On the other hand for homeowners who purchased in the last eight years selling now is a rude awakening. First the encouraging indicators for Gig Harbor home sales…

• Gig Harbor listing inventory is down 13% from 2010–12 month supply
• Key Peninsula listing inventory is down 14% from a year ago–8 month supply
• The time from listing to an acceptable contract is down 20% from 2010
• Key Peninsula nearly doubled the sales as 2010 in October…Gig Harbor equaled 2010
• 30 year interest rates were below 4% last week…15 year at 3.3%
• Terrific values are available in bank-owned homes for  buyers
• It is a seller’s market (albeit the bank’s) in the $200-250,000 range for Gig Harbor home sales

Smaller inventory, combined with historically low rates is the traditional mix for a market rebound. It isn’t housing itself that is dragging prices down but buyers’ hesitancy with lack of jobs, the stalemate in DC, volatile global economic issues and the stock market. Unfortunately these factors are producing some of the following statistics for Gig Harbor home sales.

• September-October Gig Harbor & Key Peninsula sales prices were equal to 2003 prices
• Bank-owned sales are still a drag on the Gig Harbor home sales– 25% of all sales in October
• 33% of sales in Gig Harbor were distressed but only 12% of homes listed for sale are
• Gig Harbor median prices are down 13.6% for the last 12 months, some of Puget Sound’s worse
• Key Peninsula sales prices are down 10% for the last 12 months, equal to Pierce County as a whole
• Gig Harbor home prices are 40% off their 2006 peak

There’s not much good news for Gig Harbor home sales in these facts. I’ve used the last 12 month average compared the 12 months prior. This tends to even out the monthly highs and lows.

Our South Kitsap neighbors haven’t seen the same price slide—down just 2.9% as a comparison. The market there has been gaining strength all year, but they experienced an even higher rate—43%–of sales from the distressed arena with 25% of active listings either bank-owned or short sale. And King and Thurston counties are down just 8% and 5.25% respectively with Thurston having less than a two month inventory.

It was about a year ago that forecasters warned prices would slip another 10% nationally. No one wanted to believe it. But Gig Harbor is now down about 40% from the peak in summer 2006.

The “supply and demand” theory is working well for bank-owned properties. There was one buyer for every two homes listed in October. This demand contributes to the price depression.   Meanwhile a shorter supply of bank-owned properties could bode well for non-distressed sellers and maybe a settling of prices for a short time. This may change as more foreclosed properties are marketed for sale.

To put perspective on the price declines for ALL sales versus those not distressed I have used second quarter figures which showed a year-over-year decline of 14% for all sales in Gig Harbor. Non-distressed homes showed a 12% decline, short sales a 9% drop and bank-owned 18%. It is easy to see when bank-owned sales represent 25% of the market (in April as high as 42%) it will draw down the overall figures. But even those non-distressed homes suffer because of the competition.

Investors have come back to buy and they buy in the more affordable price ranges, adding to the downward push of median prices for Gig Harbor home sales.

Carole is a Broker at Windermere Real Estate in Gig Harbor, licensed since 1967. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com.

Gig Harbor waterfront sales…what a difference!

What a difference 4 months has made for Gig Harbor waterfront sales. In June I reported waterfront prices appeared to have stabilized. I added the caveat “for now”.  Sales were up and closed prices were running higher than 2010 prices. The median price for the first 5 months of 2011 was $686,000.

Then was then. And now is now. Gig Harbor waterfront sales prices have fallen a full $90,000 in the past 4 months and $60,000 from 2010 to $596,000 year-to-date. I blogged in June I was very concerned that closed prices would drop in the future because the pipeline of pending sales was reflecting much lower list prices.  It has!

Median price is the point where half the sales closed for more than that price and half closed for less. It is the typical sales price quoted for national and regional statistics. In 2007 half of the sales exceeded $900,000 and half were less. The turn in the waterfront market run-up can be traced to September 2007.  The first quarter of this year was by far the strongest for Gig Harbor waterfront prices…sliding ever since.

Sales volume is up 10% over last year and sellers realistic in pricing for today’s current market are selling in fewer days than in the past.  We are currently on track to close as many,  and possibly more, Gig Harbor waterfront homes as we did in 2006 and 2007.

January-September Gig Harbor waterfront sales highlights

• Sales volume well ahead of 2008, 2009 and 2010—10% higher than 2010
• $596,000 closed median price, down 10% from 2010 ($60,000 drop)
• Closed median price down 33% from 2007 high of $900,000
• Inventory down about 8% from a year ago
• Pending median list price $549,000
• 25% of closed sales are distressed properties—equal bank-owned & short sales
• 25% of pending sales are also distressed properties

Only 5 Gig Harbor waterfront sales have tipped the scale at more than $1 million since January—4 in the first 5 months and 1 in the next 4 months.  And the inventory is high—44 homes are listed over $1 million…16 of those over $2 million. At that rate of sales there is more than a 6 year supply of homes on the market over $1 million. With these statistics sellers need to price aggressively. It is very clear in today’s market that Gig Harbor waterfront homes selling in the fewest number of days are those that are priced realistically—in many cases sellers are able to get the full list price. 13% of sellers this year received full list price in 3-28 days of listing.

But what a bonanza for Gig Harbor waterfront buyers right now. With interest rates never lower and financing more available for higher-end homes than in 2009 and 2010 this is a great opportunity for buyers who have been contemplating a waterfront purchase. Buyers who can…are buying…as reflected in September’s written contracts. Buyers entered into contracts for 7 Gig Harbor waterfront homes…a figure not seen for September since 2007

Carole Holmaas is a Broker at Windermere Real Estate, licensed since 1967. She specializes in waterfront and view properties and may be reached at 253.549.6611 or carole@ISellGigHarbor.com

How do Gig Harbor home sales compare?

Closed home sales figures for august rose nearly 10% over last year in Gig Harbor but that was substantially less than Pierce County which experienced a 35% increase. Key Peninsula’s figures were more in line with the county at nearly 47% increase.

King County experienced a 32.7% increase in sales over last year and Kitsap 32.2%.

The increase in sales volume, coupled with a decline in inventory since last August of 13% in Gig Harbor brought the supply of homes down to the second lowest number for the year–8.4 months. the 16% inventory decline in Key Peninsula brings its supply of homes to 9.7 months–some of the lowest it has seen this year also.  Absorption is figured on the number of homes currently listed selling at the last month’s sales rate.

The good news was short lived however as the median sales price fell once more–down 11% from a year ago–$415,000 to $369,000–in Gig Harbor and down 15% for the quarter over the same period in 2010.

Key Peninsula prices fell even more–29% from last August–$194,000 to $138,000 with a quarterly decline of 20%. All but two months in 2011 have been at 2003 prices.

In comparison, Pierce county’s sales price tumbled 15% from a year ago, while Kitsap and King counties experienced a smaller decline of less than 9%.

Carole Holmaas is a Broker at Windermere Real Estate/Gig Harbor, licensed since 1967. She may be reached at 253.549.6611 or carole@ISellGigHarbor.com.

Where the good news for Gig Harbor home sales is found

Gig Harbor home sales are up 47% year-to-year and 5% for the first seven months of the year.

While the median sales price is down 16% from last July to $332,000, it increased 2% in the May to July time period over the previous three months. There appears to be a slow stabilization in prices.

• Sales price May-Jul over Feb-Apr         ▲2%
• Sales price  2010 – 2011                                 ▼16%
• Sales price 2006 – 2011                                 ▼30%

Gig Harbor’s prices peaked May-July 2006 at $478,000, putting prices off 30% from the high. That figure is just slightly less than the Seattle/Tacoma/Everett area index reported by Zillow last week—down 32% from the peak.

Year-over-year prices for the county as a whole experienced only an 11% downturn from 2010. So Gig Harbor home sales are generally the same as the Puget Sound region in the long term but a little worse in the short run.

The short term cause is the high percentage of distressed Gig Harbor home sales in the past six months. July’s distressed closings were 37% of all sales—slightly less than the all-time high of 42% in March and April. Included in these Gig Harbor home sales are homes priced at $800,000 and $1m.

It’s easy to see why prices aren’t picking up steam. Distressed home sales came later to Gig Harbor. Only 19% of the closings in January were distressed and less yet in 2010. While virtually no homes being offered for sale “short” closed during winter, the process has smoothed out and transactions being handled by negotiators often are working their way through the system within a few months.

August closings will be a good indicator of a market not fueled by the 2010 first-time homebuyer tax credit. Transactions had to close by June 2010 for the credit, resulting likely in the strong decrease of closings the following month. Pending sales are up 18% from a year ago and nearly 33% for the last three month period. This bears well for future closings. And inventory is running 12% less than a year ago.

Key Peninsula home prices are showing no sign of stabilizing. Sales are down slightly and prices are off 22.5% from last July. And the May-July quarter registered a huge drop of 16% over the previous three month period.

Key Peninsula’s home prices peaked in February-April 2007 and prices are off 39% from that date—now selling at $156,000.

Carole Holmaas is a Broker at Windermere Real Estate/Gig Harbor, licensed since 1967. She may be reached at Carole@ISellGigHarbor.com or 253.549.6611.

Gig Harbor home prices great for buyers!

Gig Harbor home prices are great for today’s buyers but discouraging for sellers. Prices are the same as in late 2003.  Key Peninsula home prices are at equal to second quarter 2003.

The usual culprit dragging sales numbers down is the distressed market. When 29% of all sales in Gig Harbor and 56% of Key Peninsula sales are bank-owned or short sales it pulls the numbers down even though the same non distressed home will sell for more.

The graphs tell the story. In 2010 Gig Harbor home prices had a seven month run of improved prices over the year before, but prices plummeted in October, stayed down throughout the winter, bounced up in April and May but declined severely in June. Gig Harbor home prices are now at their lowest point in the last seven and one half years.

Gig Harbor home prices are down 10.5% for the second quarter from 2010 and down 23.4% from May. The10.5% decline speaks to how bad the market still in because the overall drop from the all-time high in 2006—five years ago–is 25%. Supply of homes, based on sales, has been holding in the 10 month range.

Key Peninsula didn’t fare any better. Responsible for a higher percentage of distressed sales, prices are down 16.4% for the second quarter from 2010 and 15% from May. Between 2006 and 2008 there was more price consistency in the market with some of the highs occurring in each of the three years. But June’s low is down 54% from the all-time high of January 2007.

All of the distressed home sales in Key Peninsula were bank-owned whereas the balance between bank-owned and short sales in Gig Harbor is more equal.

Closings in July will reflect the first month where a true comparison can be made between current and previous year sales. June 2010 was the last month to close on the loan for first-time buyer credit so last year’s sales were slightly higher in Gig Harbor but the same in Key Peninsula. I would expect the next few months will see sales easily surpassing 2010.

Second quarter news was consistently dismal—oil and food price increases, European defaults, weather, employment, and D.C.’s stalemate over the debt ceiling and deficit reduction. The economy couldn’t get any positive traction and lack of consumer confidence meant buyers were unwilling to buy unless they got a great deal. This is really a “buyer’s market.”

One glimmer of sunshine is that Seattle has seen some strong activity, some multiple offers in certain price ranges, and some price stabilization. As goes Seattle…so goes Gig Harbor, eventually.

Carole Holmaas is a Broker at Windermere Real Estate, licensed since 1967. She may be reached at 253.549.6611 or by Carole@ISellGigHarbor.com/

Gig Harbor waterfront home prices stabilize…for now. Sale prices for Gig Harbor waterfront homes at the end of May were on track to beat 2010 prices–$686,000. However, the median list price of pending contracts is only $500,000. Half of these are distressed properties. So it is very likely the median closed price will slide over the next few months.

There is some good news for sellers trying to sell their homes though. Gig Harbor brokers have already closed as many sales in the first five months as the first half of the last three years. The first quarter was particularly strong as interest rates were low and buyers sensed prices were bottoming and made good use of sellers’ willingness to negotiate heavily at the end of winter.

January-May Gig Harbor waterfront home highlights

• Sales volume well ahead of 2008, 2009 and 2010—as much as 50%
• $686,000 median closed price up $25,000 from 2010 prices
• Inventory down 30% from a year ago
• Inventory up 25% in last 75 days
• Pending sales median list price only $500,000

• 37% of closed sales are distressed properties
• 50% of pending sales are distressed properties—1 bank-owned & the rest stuck in the short sale approval process
• Bank-owned homes closed for 81% of the bank’s list price and were on the market an average of 135 days after the bank took over. This drops precipitously to 63% from seller’s original list price
• Short sale homes closed for 67% of original list price and were on the market an average of 415 days
• Non-distressed homes closed for 70% of original list price, only slightly better

Sellers, as they consider pricing, should note the list to sales price ratio for original owners of homes eventually foreclosed on—63%– as well as the 70% for non-distressed closings. There is a difference in being “on the market” and “in the market” and several well-priced homes have sold this year in a matter of days for 95% of list price.

Four Gig Harbor waterfront home sales have tipped the scale at $1 million plus since the first of the year. The homes–two homes on Fox Island and two in Rosedale- sold for 72% of original list price. 2010 produced 17 sales over this mark.  In perspective…there are 50 homes listed over $1 million, including 16 over $2 million. This is a 61% increase in this price range in the past 75 days. It is easy to see many of these homes will be on the market for some time.

To further understand this market segment…there is not one current pending sale above $1 million. At this moment very few buyers are stepping up to these very high-end properties. However, willing and able buyers are receiving some very high quality Gig Harbor waterfront homes…in some cases at or under county assessed values.