The high inventory of new homes in all price ranges makes this market a buyer’s dream, compared to 2002-2005 when homes were being sold as fast as contractors could complete them.
New homes are on track this year for merely 70-75 sales. Typically at their midway point by June 30, only 34 homes have closed in the first six months. Only seven more were added in July. This is a 57% decline from 2007 and 67% from 2005–the slowest of the four best years (208 to 292 sales for each year). With 193 homes completed or under construction and July’s seven sales—this equates to a 27 month absorption rate. 2000 was the last year this slow, with 98 sales at year end.
Sales are slow in the few new subdivisions Chelsea Park, Harbor Crossing, Crescent View Estates and the Ridge, with a 50 home inventory and less than 10 closed .
Building permit applications have dropped sharply for Pierce County —32.4%. While most new construction in Gig Harbor will take place in the future within the Urban Growth Area the county is responsible for all permits in Key Peninsula. Chuck Kleeberg, director of Pierce County Planning and Land Services, said he expects this slow trend to continue through 2009.
Supply will need to contract before prices will firm up for builders. Meanwhile buyers have as many choices as there is candy in a candy store.
NEW HOME INVENTORY
PRICE RANGE GIG HARBOR KEY PENINSULA
Median list price $733,000 $319,000
Median sq feet 3255 2038
<$300,000 7 23
$300,000-399,999 5 16
$400,000-699,999 52 4
$700,000> 78 8
TOTAL 142 51
More than 50% of Gig Harbor’s inventory is over $700,000 whereas 75% of Key Peninsula’s new homes are priced less than $400,000. Close-in lots are in higher demand, lots have become more expensive to develop, and, in Gig Harbor, lot supply is dwindling quickly.
New homes in Gig Harbor have declined from a high of 27% of all home sales in 2003 to just 9% in 2007 while they have attributed 25% of sales in Key Peninsula in the past three years. This has helped Key Peninsula sustain a nearly steady median home price for the past three years. But Key Peninsula numbers will fall too in the future as its finite number of building sites decline.
Carole Holmaas is as Associate Broker with Windermere. Her real estate blog is http://blog.ISellGigHarbor.com. She can be reached at Carole@ISellGigHarbor.com or 253.549.6611.