Carole's Blog

Gig Harbor, Fox Island, Key Peninsula all experience highest recorded sales prices. Gig Harbor home sales volume is still expanding; prices are still on the upswing and inventory is still down—in Seattle and throughout the Puget Sound. Here’s the evidence.

• October was the best month for sales volume ever recorded
• Days on market are 20 in King County & 32 in Pierce
• Seattle has replaced Portland as the fastest growing market
• King Co prices are up 14.5%, Pierce Co 10% year-over-year
• Seattle is the 9^th most expensive rental market in the nation

So, how’s “our neck of the woods” doing?

Gig Harbor home sales & Fox Island home sales

• MSP (median sales price) increase of 9.6% from a year ago
• Last 2 months of $492,000 MSP, besting 2006 peak of $482,000
• Each of 7 months of this year the MSP topping 2006
• September is 2nd highest recorded MSP; October is 7^th best
• New listings are up 23% for the past 3 months over 2015
• Closed sales have climbed 17% during that time
• Pending sales show modest increase of 6%
• Cumulative days on market have dropped from 92 to 72

Key Peninsula home sales

The KEY has rebounded! That’s the good news for the peninsula that has struggled even as its eastern neighbor began to rebound a couple years ago.

• January to May the MSP was lower than same months of peak 2005-07
• Since June monthly prices have outpaced every previous year
• MSP is up 18% from $220,000 to $260,000 quarterly since 2015
• Closed volume is up nearly 10% for the quarter
• New listings are up over 28% for the quarter

Gig Harbor home sales continue nicely in “recovery mode”

In a nutshell—Gig Harbor home sales prices are up, inventory & sales volume are flat, upper tier is appreciating, & new construction is impacting buyers. Here’s my take for the September-November quarter for Gig Harbor & Fox Island, compared to a year ago…

Sales prices ↑ 6.2%

A 6.2% increase in Gig Harbor home sales brings the median sales price (the mid-way point in sales prices) to $378,000 for the quarter. The single month of November was $432,000 — 31% over October and 44% from last November. Prices for Gig Harbor home sales have been gradually strengthening all year after a low of $303,000 in January. This increase should allow more sellers to list – gaining some of the equity lost during the housing bust – and adding to the inventory the market badly needs.

Prices are down 20% from the 2006 third-quarter peak — at summer 2005 prices. Important to note, at the peak, new homes made up a substantial number of sales at $600-750,000, elevating over-all prices. The 6.2% uptick is realistic appreciation I believe, after a stagnant 3 ½ years, ending with second quarter 2014.

Resale non-distressed homes appreciating

These are sales of existing homes – not short sales or bank-owned. Sales prices have steadily been gaining since March, except for October – at $384,000 — down 14% from the 2006 third-quarter peak. The single month of November was $448,000 –the highest single month’s sales price since August 2006 ($475,000) when prices for Gig Harbor home sales turned the corner. However, too much cannot be read into this single month.  22% –11 of the sales were waterfront homes over the median sales price – never before seen in November.

Sales Volume ↑ 1.4%

Pendings ↑15.9%

Contracts written but not yet closed are up with renewed consumer confidence, threat of future higher interest rates and easing of loan requirements.

Inventory “flat”

Inventory is still low, which can lead to multiple offers and homes selling above their list prices. Routine in the Seattle area but it happens here too. Local brokers point to the quality of some homes plus unrealistic pricing in Gig Harbor. They say buyers often will not even look at a house they perceive to be over-market but wait for a price reduction before even viewing it.

New home inventory 26% of the market

With a quarter of all inventory new homes the market is decidedly different for buyers than a year ago when it made up only 16%. With fewer resale homes – and more new homes –some buyers are having to change search parameters – especially when it comes to lot size. The Growth Management Act regulates density where utilities can service it, forcing smaller lots. Half of new homes currently are on smaller square footage than the traditional 12,500 – 35% are on 5000 or less –and half of those on less than 2300. This can provide more buyer interest for resale homes on larger sites.

Short-sales ↓50% – REO’s flat

The distressed market continues to retreat — just 10% of Gig Harbor home sales. It was 13% last year.

Waterfront sales on par with 2013

Sales volume on the two peninsulas looks to nearly equal the 135 sales last year. But the real story here is increasing prices – we could see a median sales price uptick of $100,000 when all the dust settles—bringing it to the $600,000 range.  And even bigger news is the $1m plus tier for Gig Harbor home sales . 2014 will end with the same number of sales over $1m as in 2006 and 2007—21. Over 90% of the $1m sales came in the last half of the year – again low interest, good values, and increased consumer confidence. (See Resale Non-Distressed Sales above)

2015 will be a strong year for Gig Harbor home sales

I’m going out on a limb and predict 2015–even this winter–Gig Harbor home sales will be even more active than 2014. Here is why:

• The volume of pending sales throughout the Puget Sound—including Gig Harbor & Key Peninsula– is at a 9-year high. That is a turn-around from the slow earlier 4^th quarter and 1^st quarter.
• Interest rates are going to bump up, as much as 1% next year, according to Freddie Mac, encouraging buyers to make decisions sooner. A one point rate increase relates to 10% less purchasing power for the same payment. Credit is getting easier, with lower FICO scores being accepted and Fannie Mae and Freddie Mac are planning to offer 3% down loans.
• Owners are regaining some equity lost over the past 8 years and many have been waiting to market their home until prices improved. Many of those are looking for a lifestyle change. I estimate there is a “pent-up demand” by more than 200 waterfront owners alone who would like to make a move. I believe more of those owners will put their homes on the market next year, based on recent figures showing a volume increase of 25% between $750-1M and 50% over $1M in the past 3 months.
• Houses are sitting an average of only 75 days on the market, down from 108. Gig Harbor has just a 4.4 month supply of homes on the market, Pierce & Kitsap counties 3.3 months & King County less than 2 months. This puts pressure on Gig Harbor home sales.
• The median sales price for Gig Harbor home sales increased around 4% for the past 3 months — for Gig Harbor at $379,000 but is still swinging widely in Key Peninsula from $165,000 to $245,000. The higher tier has shown more improvement—$750,000-1M is up 5.8% and even $1M+ is up .2%.

Here’s my advice for today’s sellers. Technology has put the buyer in the driver’s seat, in determining what a house should sell for—so sellers cannot add “fluff” to the listing price, hoping to find a buyer who isn’t knowledgeable about the market. Buyers are knowledgeable.

And for buyers—keep in mind that one point in interest rate increase will buy you 10% less house, at the same time that prices are going up.

Gig Harbor home sales in “recovery mode” 

In a nutshell—prices are up, inventory is under par, sales volume is down and the upper tier is appreciating. Now the details for Gig Harbor home sales year-over-year for the quarter…

Gig Harbor home sales down 16.5%

July itself is not usually a high sale volume month for Gig Harbor home sales (or any other area) with vacations. Only 2004 and 2013 were better in last 12 years, so in perspective, this is not bad.

The middle one-third of Gig Harbor home sales ($325-500,000) has predictably shown the least downturn in sales volume and the top one-third ($500,000 plus) has shown the least downgrade on number of contracts written (pending). Contracts written but not closed indicate current activity, thereby important because they show “move-up” activity as well as increased market strength and pricing for the higher tier.

Gig Harbor home sales “pending” down 14%

Pending sales for the quarter are down but shot up 14% from June, which is the experience local brokers have seen. Most central Puget Sound counties had the same experience.

Prices for Gig Harbor home sales up 7.2%

The median price is appreciating–$387,000 for the quarter and $410,000 for July. July is also up 3.8% over June and up 25% year-over-year for the month. It has been gradually strength this year, after starting very low at $303,000 in January. This increase in prices for Gig Harbor home sales will encourage more sellers to list, adding the inventory the area badly needs.

We are down 18% from our 2006 third-quarter peak–or at summer 2005 prices. But at that time new homes made up as much as 40% of the sales, priced at $600,000 plus. The King/Pierce/Snohomish market as a whole is down 12.6% from the peak—the lower figure representing ever-strong metro King County.

Price increases are not exorbitant–just realistic appreciation. Brokers area-wide are saying sellers who overprice their homes face disappointing consequences.

Resale non-distressed appreciating

Sales prices have steadily been gaining since the first of the year–now at first-quarter 2006 prices $395,000.  August 2006 the peak–we are down 18% from the peak.

Inventory up 3%

Inventory is still low, which leads to multiple offers and homes selling above their list prices. Brokers throughout the Puget Sound point to the quality of some homes plus unrealistic pricing hindering sales. They say buyers often will not even look at a house they perceive to be over-market but just wait for a price reduction before viewing it.

New homes sales 10%

New construction has taken over 10% of all Gig Harbor home sales, down from 15% a year ago. But it represents 19% of all active listings,

Distressed sales 12%

This distressed market represents just 12% of Gig Harbor home sales—slightly less than the 14% in 2013. The single month of July was even better at just 6.5%.

Waterfront sales down

Sales volume is down significantly following the last 2 “makeup years”. Sales over $1m are running at just half-speed from those 2 years.

Gig Harbor home sales

Gig Harbor home sales annual review—strictly resale. This may surprise you but 2^nd quarter 2013 and 3rd quarter 2012 realized median sales prices near the 2006 peak of $425,000. This is “strictly resale” homes—not bank-owned nor short-sales.

Today’s graph of Gig Harbor home sales shows resale, new and bank-owned sales plus the resale trendline, by quarter, from $400,000 in 2005 to $370,000 today.  Resale is now off just 13% from its peak and only 7.5% from its trendline. Sale prices performed well in the first half 2013…but removed much of those gains in the second half…performing at 2005 prices.This is true of all Gig Harbor home sales.

More stats on the resale market

• Current $370,000 sales price is considered neutral, based on a 6-quarter trend
• Sold-to-listing price ratio  is up to 94% from 89% a year ago
• With 40-55% of 2006-07 sales new large homes, this pulled up the sales price overall above $450,000 —  just as bank-owned sales pulled it down below $325,000

I offer some observations…positive and negative for Gig Harbor home sales

• The recent Boeing contract and high tech industry will produce a more robust housing market than much of the rest of the nation
• Interest rates will likely  climb to 5.4% by year’s end and lending will be less supportive to a housing recovery
• Income growth will continue very slowly. This is the deepest and longest employment “recovery” we have experienced since the Depression
• Investors have pulled back from buying homes, creating part of the slowdown in sales since summer
• Inventory will stay low until sellers can retrieve more of their equity—higher sales prices. Nationally 13% of homeowners owe more than their home is worth. Washington is 11^th for foreclosure filings, bucking the national trend
• Puget Sound sales volume has dropped the last 3 months after all 2013’s earlier months topped the charts
• January 10’s tighter underwriting standards will keep more first-time buyers renting

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.

Brakes applied to Gig Harbor home price slide.

The slide of the last five and a half years for Gig Harbor home prices has slowed in the last couple months while dropping 10% for the year.  Sales for 2011 shows Gig Harbor home prices(including Fox Island) neither bank-owned or short sales in the 4^th quarter declined only 3% rather than the 17% drop experienced in third quarter.

• Inventory is currently down 20% from a year ago and 40% from 2008
• Median sales price in 4^th quarter stood at $352.000 for non-distressed properties and $225,000 for bank-owned or REO (real estate owned).  The REO figure reflects a 19% drop from 4th quarter 2010 Gig Harbor home prices
• REO sale prices dropped about 15% for the year and non-distressed were down 10%
• All Gig Harbor home prices are trending  back to 4^th quarter 2004 but when removing  distressed sales from the equation prices are similar to 1^st quarter 2005 prices
• Homes are staying on the market fewer days—from 7-8 months in early 2011 to 4 months currently
• A few more homes and condos sold in 2011 than 2010
• January Gig Harbor home prices are trending up as well—higher than 6 of the past 12 months

Local 2011 quarterly statistics for Gig Harbor home prices highlight the difference between heavily discounted  bank-owned houses and the “rest of the market”.  REO sales represented 28% of all home sales in the first quarter but only 18-19% the last half of the year. This is expected to increase again as the lenders begin to ratchet up foreclosures after last week’s settlement with the five largest lenders, pertaining to sloppy methodology including robo-signing of documents. REO sales are still expected to maintain a solid presence in the housing market the balance of this year. Nation-wide foreclosures decreased 34% last year over 2010…but are expected to increase 25% in 2012. 

Gig Harbor Median Prices by Quarter

Short sales are not separated out in the table above because they actually do not affect the overall median price much. They are spread throughout all prices and tend to settle closer to the non-distressed market price. In fact the fourth quarter saw short sales close higher than non-distressed sales and much higher than the year before. 2011 is the year lenders have become receptive to the process, along with the help of negotiators who specialize in short sales.

The monthly national data shows some stabilization or increases in select markets one month while the next month produces data showing nearly all metropolitan areas are still down. Bright spots in the Puget Sound are the hiring Boeing and its contractors are doing plus overall improvement in employment.

Carole Holmaas is a Managing Broker at Windermere Real Estate/Gig Harbor, 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.

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/