POULSBO — The number of homes on the market is shrinking while demand is growing, real estate agents say. And that’s helping fuel rising prices.
“During a healthy market, we have probably two to three hundred homes on the market on the island. As of yesterday, we have 60,” Carter Dotson said on June 24. He’s an owner of Windermere Real Estate, with offices in Bainbridge, Poulsbo and Silverdale.
So, what’s that mean to those looking to sell or buy a home?
“When there’s enough inventory, the seller doesn’t have the advantage because buyers have more [homes] to choose from. The buyer doesn’t have to make an all-cash offer or pay $50,000 over the asking price to acquire a home,” Dotson said.
“When there’s not enough inventory, buyers don’t have anywhere to go. They’re kind of waiting until something comes on the market, or they may be one of three or four buyers” competing for a home purchase.
The good news for sellers right now: Obviously, homes are selling. And the median closing price of a home in Kitsap County was $265,000 in May, up from $230,000 in May 2014 and the ninth-highest among the 23 counties in the Northwest Multiple Listing Service.
The year-to-date median closing price is $245,000, up from $229,000 in year-to-date May 2014, according to the Northwest MLS.
The good news for potential home buyers: Interest rates are low, the economy is growing, and it’s possible to end up with a mortgage payment that’s comparable to rent.
“Anyone who can buy a home today at today’s prices with today’s low interest rates should do it,” said Berkshire Hathaway HomeServices Northwest president Mike Gain in the latest Northwest Multiple Listings Service report. “In my opinion, prices and monthly payments will never be lower than they are today.”
Renters are among those re-entering the housing market. “They are finding their monthly payment to be less than their rent payment for a similar home,” Gain said. “They also like the fact their payment will remain the same. And they’re finding there are numerous low-down payment assistance and no-down payment mortgages available at incredibly low interest rates.”
The market hasn’t fallen out of balance yet, Gain said. “Locally, home prices are continuing to rise at a steady pace, and they continue to outpace both inflation and wage gains. Sellers may never see a better time to be a seller.”
In Kitsap in May, there were 592 new listings, 950 total active listings, 554 pending sales and 353 closed sales, according to the Northwest MLS. Real estate firms estimate there is 2.69 months of inventory on the market to sustain demand, down from 4.11 months in May 2014 and well below the four- to six-month figure used by many industry watchers as an indicator of a balanced market.
Leading the region in median closing price was King County, $434,000, followed by San Juan County, $365,075; Snohomish County, $335,000; Island County, $284,050; Whatcom County, $277,000; Chelan County, $275,000; Douglas County, $270,372; Jefferson County, $270,000; and Kitsap.
At the end of May, the total number of active listings in the region stood at 19,515, a drop of more than 18 percent from a year ago when MLS members reported 23,917 active listings. Only two counties — Douglas and Ferry — reported year-over-year gains in inventory.
Regionwide, 8,229 home sales closed in May, up from 7,187 in May 2014.
In the MLS service area overall, there is about 2.4 months of supply, according to the report. About half the counties reported less than four months of supply.
Kitsap home-sellers are benefitting from the lack of housing inventory elsewhere.
“This is a supply-demand-distance type of market,” said Frank Wilson, branch managing broker at John L. Scott in Poulsbo. “They have run out of inventory in the Seattle market so now it’s just a matter of how far a buyer needs to drive to find a home that is available and affordable. Kitsap is seeing that demand increase with a bit of a lag as the market rolls from east to west into Kitsap and beyond.”
Luxury home buyers are also active participants in the current market. A check of MLS statistics shows 887 single-family homes priced at $1 million or more have sold during the first five months of the year. That’s up from 696 for the same timeframe a year ago, a jump of more than 27 percent.
Despite the fast pace of housing activity, Northwest MLS brokers cautioned buyers and sellers alike to make sensible decisions. Sellers should make sure their home is not overpriced, and that it’s listed on the Northwest Multiple Listing Service. And buyers need to be ready to write a strong offer.
“We are still seeing buyers who think getting a loan is like it was in the old days: fog a mirror and get a loan. That’s no longer the case,” Wilson said, adding that prospective home buyers must have documents and verification all the way through closing.
“Buyers need to be ready to buy on day No. 1. This means getting approved with their lender, being clear about what they want in a new home, becoming educated about the market, and being ready to write a strong offer when they find the right home.”
Dotson concurred. “With historical low inventory, what I would say is, be prepared,” he said. “If you’re a buyer, make sure your financing is squared away to make yourself as competitive as possible. If you’re a seller, be prepared that your home will sell quickly. And be realistic. There are properties that will sit on the market if they are not ready or are overpriced.”
