By BRENDA PROWSE
While much has been said about the steep drop in the January median sales price in Kitsap County, as well as the drop in the number of closed sales, there are factors in our market that indicate things are getting better.
A higher percentage of sales in January were distressed properties with attendant lower prices. The raw numbers in a relatively small sample can be misleading too — just last year we observed a Kitsap County median price decrease of $40,000 between February and April. We expect an upward swing in median sales price in February.
The federal government and states have announced a $25 billion settlement with five large banks addressing errors in processing foreclosures. An article in the blog Calculated Risk assessed that the impact of this settlement would not make much difference in alleviating problems in the housing market. Considering that the settlement might allow as many as 500,000 mortgages to receive reductions in principal, perhaps the number of seriously delinquent loans could be reduced by 10 percent from the current number of 3.86 million.
The larger impact of the settlement is that it clears the way for banks to process more foreclosures (so the distressed property inventory should increase), and will allow more mortgages of the estimated 7 million underwater borrowers not in default to be modified through the new HARP program. Calculated Risk thinks the housing bottom is here. For us in Kitsap County, we would just point out that buyer interest seems to be up (the number of page downloads on our web site, www.bprowse.com, in January was 20 percent higher than a year ago), affordability is excellent, pending sales are up, and the economy seems to be getting better.
Kingston median $329K
Kingston is the largest of the remaining housing markets in North Kitsap. Activity in Kingston should be representative of other nearby communities. Kingston homes were selling for a month-end median price of about $329,000 at the end of December — 47 percent higher than a year ago and 39 percent lower than in January.
Month-to-month fluctuations in the low-volume Kingston market make these raw numbers difficult to interpret. The more stable three-month average ($365,492) of closed-sale price is 51 percent higher than a year ago. The Kitsap County three-month average price is about 1 percent lower than it was a year ago.
Regarding the number of closed sales, the three-month average in Kingston was 6 percent lower than a year ago, while the number of pending sales was 40 percent higher than a year ago. The three-month average of closed sales is up 3 percent countywide from a year ago. The number of active listings in Kingston (50) is 35 percent higher than a year ago. The inventory turnover (total homes on the market divided by number sold last month) is 16.7 months, way slower than the 6.7-month turnover reported the previous month and slower than the 6.2 month turnover of a year ago.
What this means is, Kingston is still a buyer’s market.Kitsap County’s monthly median closed-sale price in January ($176,500) was down 23 percent compared to December and down 27 percent compared to a year ago. Such a large drop seems an anomaly (because of the higher percentage of distressed sales) that we expect will recover next month. The more stable three-month average of the median closed-sale price ($212,967) is less than 9 percent lower than last month and about 10 percent lower than a year ago.
Countywide, the January median list price was $259,500, about 2 percent lower than last month and 7 percent lower than a year ago. The county has a listing-inventory turnover rate of about 10.7 months, slower than the 6.7-month turnover rate in December.
The turnover rate has recently been driven by the under-$200,000 market, which this month had a turnover rate of 5.6 months. All other price ranges, even the $200,000-$300,000 market, had turnover rates of over 10 months.
Affordability is definitely at a record level and should tell you that properties are very affordable. Try our improved home search at www.prowserealestate.com/IDX-Search.
— Brenda Prowse is owner of Prowse & Co., a real estate company in Poulsbo.