Carole's Blog

Gig Harbor waterfront prices increase 18% but high-tier not catching up. 2016’s sales neared 2013-14’s record for volume. But the real news is the 18.65% bump in median price for Gig Harbor waterfront homes–the point where half of all sales were more and half less than $700,000.

Sale prices of all Gig Harbor homes have recovered to best the peak years but the very high-tier waterfront prices have not caught up. Today prices are 22% off the 2007 $900,000 peak. 2017 could however minimize that difference for Gig Harbor waterfront.

In 2006-08, 35% of Gig Harbor waterfront sales were over $1M. In 2016, only 21% were over $1M. In 2006, 23 homes sold over $1M. In 2016, 26 homes sold–nearly the same, but twice the overall volume.

The selling price for the 10 homes that sold for $1.5M or more averaged 163% of their assessed value last year, something buyers need to be cognizant of in offering…and 133% in the $800-1M price range. Looking ahead at the 2017 assessed values, I believe prices for Gig Harbor waterfront will continue to outpace county assessments West to Southeast exposure was the norm for the $1.5M price range, and they averaged 154 feet of frontage. One third had docks and nearly all were low to medium-low bank…normal for the high-tier.

Some final thoughts–

• I believe there is a “backlog” of a minimum of 150 Gig Harbor waterfront owners who are ready to move–if market conditions (read prices) permit. This year should bring more of these properties to market.
• New flood plain maps will be implemented March 7, affecting Gig Harbor waterfront low bank. Sellers and buyers should review FEMA’s website for maps to see the impact for flood insurance rates in high-velocity wind and reach situations.
• Additionally, the long-waited Shoreline Master Plan revision is scheduled for adoption this year, expanding shoreline setbacks and restrictions. I was on the committee when it began in 2008…now eight years later. So…lots going on.

Gig Harbor waterfront prices up 10%

Gig Harbor waterfront prices up 10%, January to mid-May, over the 2013 year. The entire price bump is coming from Gig Harbor and Fox Island—up 14% while Key Peninsula is experiencing a 7% decrease. Here are the highlights…

Sales volume for Gig harbor waterfront

• On track for 100 sales by year-end—fairly typical
• Slower thus far than 2013’s all-time high of 135
• Sweet spot is $500-600,000, 4 closed/2 active listings
• Also $400-500,000, 8 closed/14 listings
• Also $900,000, 4 closed/8 listings

Median sales prices y-t-d for Gig Harbor waterfront

• Prices ↑ 10% on both peninsulas over 2013 year–$550,000
• Prices still ↓ 38% from 2007 peak
• $1m+ represents 30% of listings—but just 11% of sales
• $1m+ average 2 years on market before sale
• Under $1m—average under 6 months on the market
• Gig Harbor/Fox Island ↑ 14% over 2013–$713,000
• Gig Harbor highest sale $2,960,000 after 6 ½ years
• Key Peninsula ↓ 7%–$ 395,000
• Key Peninsula highest sale $600,000 this year

Proposed Gig Harbor waterfront changes muddy the waters

The proposed all-new Shoreline Master Plan for Gig Harbor waterfront, mandated by the State, is proceeding cautiously—with local  hearings postponed by the Pierce County Council. The Council has chosen to push back against the State Department of Ecology on issues including buffers and aquaculture, but with the threat the State will impose more onerous regulations on shoreline properties if the Council can’t agree. The current 50 foot “setback” is proposed to change to a 75-150 foot “vegetative buffer.” And structural expansion into the “buffer” would be limited to 25% of the existing footprint, in most cases.

Every Gig Harbor waterfront owner should pay close attention to the current process and seek professional assistance, “sooner than later” if there is any thought of expanding, building or selling in the future.

Cumulative House Appreciation 2014-2018.  The Home Price Expectation Survey 2014 1st Quarter was released last week by Pulsenomics. Pulsenomics surveys over one hundred economists, real estate experts and investment & market strategists asking them to project home prices. This includes three graphs for the national scene, projecting the highest this year and slightly lower the following four years.

1. The pre-bubble trend
2. The 25% most optimistic experts (bulls)
3. All projections
4. The 25% most pessimistic experts (bears)

And then, some indications historically of where annual appreciation sits:

Gig Harbor waterfront 2013’s sales volume was up 33% year-over-year.  April through October posted nearly identical volume each month—14 or 15 homes closing each month.  And the number of sales every month was the highest for Gig Harbor waterfront it had been for at least a decade.

The strong activity for Gig Harbor waterfront was due to a nearly “perfect storm” of buying conditions…historically low interest rates the first half of the year, a fair amount of inventory available with pent-up seller demand, easier lending requirements, and the buyers’ realization the market had bottomed. However, the very high tier—over $1million– dropped off precipitously with no Gig Harbor waterfront contracts written after the end of August. This followed the nation-wide fall-off of all price ranges in 4^th quarter. This very high-end represented just 10% of all sales—the lowest percentage we’ve seen since 2004.

·         Gig Harbor waterfront sales prices reached their peak in 2007. Prices have dropped 45% since then—back to where they were in 2003-2004.

·         The current slim inventory of Gig Harbor waterfront—coupled with still relatively low interest rates and easier financing could mean improving prices for sellers in 2014. On the other hand, if pent-up sellers place a surge of homes in the marketplace, it could continue to hold down prices. I believe there is a minimum of 300 waterfront owners who are ready to move—if market conditions (prices) will permit.

·         Gig Harbor waterfront homes selling above $1m sold on average for 150% of their assessed value in 2013. Average waterfront was 170 feet.  Nearly all faced West or Northwest, 3 had docks, and 8 were low or no-bank…nothing unusual here.

·         Homes selling from $750,000-1,000,000 sold on average for 120% of their assessed value. Sites averaged 136 feet, slightly more than half faced north or east, most the rest south.

·         Gig Harbor waterfront distressed home sales were down—just 9% of the sales last year were short-sales and 4% were bank-owned. This is a great reduction from two years ago at 9% and 13% respectively. The most expensive bank-owned house sold for $875,000 on Fox Island.

           There may be a window of opportunity for Gig Harbor waterfront  sellers now in early spring to take advantage of low inventory and buyers before more sellers enter the marketplace.