Carole's Blog

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.