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/

The short February month brought signs of recovery to Gig Harbor home sales as well as Key Peninsula. While the indicators showed improvement it is too early to tell if a trend is developing. The world economy and political turmoil, as well as unemployment and foreclosures still provide a rocky picture for all of this year.

Gig Harbor home sales numbers along with Key Peninsula and their accompanying median prices were all up, from January as well. This is a particularly good sign for Key Peninsula which has experienced a very stagnant market for over a year.

The last 12 months has seen a 12% drop in prices in Key Peninsula from the previous 12 months while Gig Harbor’s pricing is essentially flat.

The numerous foreclosures and economic instability is perpetuating another trend—price reductions. One in four sellers dropped their price last month—and this has been consistent the past couple years—while they try to find the sweet spot that will entice the buyer to offer.

 One positive trend we have been seeing for a year now—and one that historically produces upward pressure on prices—is fewer sellers in the marketplace. Unfortunately the reason appears to be sellers holding out, when they can, for the market to rid itself of foreclosures.  Inventory is down 21% currently. There is a nine month supply of homes in Key Peninsula and a 14 month inventory in Gig Harbor.

 Carole Holmaas is a Broker at Windermere Real Estate, licensed since 1968. She specializes in waterfront and view properties. She may be reached at 253.549.6611 or at Carole@ISellGigHarbor.com, where you may follow her blog postings.

Gig Harbor homes parallel national distressed market

Distressed sales for Gig Harbor homes totaled 23% of everything sold in January. And for Key Peninsula it hit 70% of all sales. This was a total of 15 properties–all but two were bank-owned.

Figures from the National Association of Realtors® show distressed homes rose nationally to 36% of sales of existing homes in December, up from 33% in November and 32% a year ago. Such homes are typically discounted by 10 to 15 percent, according to NAR research.

Local figures show an increase from 2009 in distressed properties for Gig Harbor homes as well. Gig Harbor is up 6% in the 4^th quarter of 2010 compared to a year before…that is 31% of all homes that closed in the three month period. Key Peninsula was up 17% during that same time to a high of 56% of all closings.

Recently reports indicated the Greater Seattle-Tacoma-Bellevue area’s foreclosure rate jump 23 percent from a year ago, second only to Houston. Regional experts believe that as our economy and unemployment improves, our market will recover more quickly than Florida, California, Arizona, and Nevada, because they have been in a deep trough longer. Snohomish and Pierce counties are currently experiencing the highest rates. And Seattle Metro prices dropped 6% from a year ago in December, which backs up the discounting of house prices due to distressed home sales. I would anticipate the Boeing award for the Air Force fueling tankers will help pull up the local economy up more quickly.

Most foreclosures now are being caused by unemployment and economic displacement, rather than bad loans and overheated values. But many of the 5 year ARM loans taken out in the heat of the 2006 housing bubble are coming due this year. Another record year for foreclosures is forecast which no doubt will drag house values down even further, pushing other homeowners into negative equity territory. It could be another five years to completely purge the housing inventory. Assets are being kept in weak hands longer as this becomes a long tedious market correction.

Distressed properties currently make up 29% of all listings in Key Peninsula and 19% of all listings for Gig Harbor homes. Two-thirds of Key Peninsula distressed homes are already owned by the bank where just 44% of the distressed inventory for Gig Harbor homes has been taken back thus far. However there is a large “shadow inventory” of bank-owned properties not yet on the market. Lenders are obligated to not flood the market.

Largest inventories are currently found in North Key Peninsula at 39%, Fox Island with 34% and Wauna/Minter at 32%.

The largest impact by price range is under $300,000 where 72% of January’s closing was distressed, and where 38% of all homes on the market fit this price range. This makes it very difficult for sellers, not in a distressed situation, in these price ranges to compete for buyers. Realty Trac, nationally foreclosure reporting service just this week noted that foreclosed properties are sometimes selling for a 28% discount over non-banked owned.