Carole Holmaas

Gig Harbor home sales follow western trend

Nationally home sales rose 21% and in the West 10% in October, compared to a year ago. Gig Harbor home sales were up slightly less--8% from 2008.

These numbers are certainly an improvement but October 2008 was a sobering sales month after the financial crises of AIG, Lehman, and others. November 2008 was even worse but this year Gig Harbor home sales are on track to beat 2008 by at least 25%.

The median price is up in 98333 and 98335 from September, an improvement from the year-over-year figures. We are cautiously optimistic we have reached the bottom for prices for Gig Harbor home sales as we are seeing some higher price sales currently. Another month of similar figures and we might call it a trend.

Here are current trends for the three zip codes constituting Gig Harbor.

		98332			98333			98335
			Oct 09			Oct 09			Oct 09
			change			change			change
Inventory
Oct 09		259			77			300
Sep 09		280	7.5%▼		80	3.7%▼		332	9.6%▼
Oct 08		262	1.1%▼		79	2.5%▼		394	23.9%▼
Sold
Oct 09		18			2			19
Sep 09		26	30.8%▼		2	No change		32	40.6%▼
Oct 08		13	38.5%▲		1	100%▲		22	13.6%▼
Median price
Oct 09		392,000			326,000			380,000
Sep 09		401,000	2.4%▼		307,000	5.6%▲		375,000	1.4%▲
Oct 08		300,000	23%▼		377,000	13%▼		352,000	8.4%▼

Inventory is down across all three zip codes. Fewer homes on the market equates to upward price pressure for Gig Harbor home sales. In zip 98335 where inventory shows the biggest decrease, the ratio for 12 months of sales compared to current inventory is 87%, but in Fox Island the ratio is 52%. This is largely explained by more higher-priced homes-view and waterfront-on the island.

Sales are up 8% across the board for the year but down 35% from September, not surprising going into winter. The gain in 98332 represents Canterwood breaking out of the doldrums as well as homes selling for $350-400,000, including four builder's houses with multiple offers in short sale conditions.

The "sweet spot" for Gig Harbor home sales currently is pending contracts not yet closed, listed between $300-400,000 in Gig Harbor North and Arletta/Artondale. For the most part, these are 2600-2800 square foot homes built between 1992 and 1998.

In Gig Harbor, as the nation, foreclosures and other distressed homes in the lower end of the price spectrum still accounted for a large percentage of Gig Harbor home sales. This is a drag on the median price which is down about 38% from the 2005 peak in the West but up 8% from the bottom last spring.

Buyers, waiting for the bottom, should consider ramping up their home search, as the inventory of certain price range homes is very slim locally. With the expanded $6500 credit incentive for existing homeowners who have lived in their home for at least five years, and interest rates under 5%, the time to buy could be NOW.

Carole Holmaas is an Associate Broker at Windermere Real Estate, licensed since 1967. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her blog is posted at http://blog.ISellGigHarbor.com.

Bank-owned Gig Harbor home sales business lower than nation

Bank-owned and short sale homes are striking the Gig Harbor and Key Peninsula markets with less impact than much the rest of the nation. In Gig Harbor, less than 13% of all the homes listed and slightly more than 14% of sales fall into this category.

In Key Peninsula, slightly more than 20% of the inventory fits this classification while sold homes are pushing 40% in the past 30 days.

The Seattle/Tacoma/Bellevue area is running 17.8% of all sales but some places in the nation are running much higher-56% in Phoenix, 67% in Las Vegas and 43% in Southern California.

10.68% of the inventory but only 8% of the sales on the combined peninsulas are short sales. 4% of the inventory is bank-owned but 13% of the sales are from this group.

This table is the 30 day period, ending November 11, for Key Peninsula and Gig Harbor home sales

Total		Gig Harbor		Key Peninsula
Active		611		203
Vacant		197		83
Active Short Sale		56		31
% Active Short Sale		9.17%		15.27%
Active Bank-owned		22		12
% Active Bank-owned		3.6%		5.91%
Pending		79		49
Pending Short Sale		31		15
Pending Bank-owned		13		13
Sold		41		21
Sold Short Sale		3		2
% Sold Short Sale		7.32%		9.52%
Sold Bank-owned		3		6
% Sold Bank-owned		7.32%		28.57%

Gig Harbor home sales show short sale and bank-owned homes selling in all price ranges but currently the $200-350,000 range is most active, with a few distressed properties even over $1million. Currently there is no bank-owned home listed over $1million.

The large number of pending short sales among Gig Harbor home sales is indicative of the large backlog of buyers hoping the bank will agree to their price. They typically wait for weeks or maybe months to negotiate with the lender. In Western Washington these short sales are taking more than nine weeks for bank response-twice as long as a year ago. This creates constant fallout of pending sales each month as buyers get tired of waiting for bank response and write an offer on another home.

Another significant factor of Gig Harbor home sales prompted by the downturn is the large quantity of vacant homes-some new homes, some foreclosed and some where the owner has already relocated. 32% of listings in Gig Harbor and 41% in Key Peninsula fit this description.

Carole Holmaas is an Associate Broker at Windermere Real Estate in Gig Harbor, licensed since 1967. She may be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Her blog may be read at http://blog.ISellGigHarbor.com.

Gig Harbor home sales up 5 of last 6 months

At least four major statistics show a turn-around in Gig Harbor home sales, including sales prices.

• October is the fifth month in the past six showing home sales better than 2008, equaling September and a 15% increase over last October.

• Year-to-date prices have slipped only 6% for Gig Harbor home sales but 11% for Key Peninsula. This is slowing the double digit downward spiral that has occurred over the last four quarters and is a positive sign of market stabilization.

• Absorption rate, or the number of months supply of homes, has changed dramatically in some price ranges. A neutral market-or one in equilibrium--is five to six months of listings, based on the number of sales the past month. Anything fewer and the market is considered a seller's market--above a buyer's market. In Key Peninsula the price ranges of $250-350,000 and $450-550,000 are now in the category of a seller's market. In Gig Harbor home sales nothing qualifies as a seller's market but $350-450,000 and $600-650,000 price ranges are in "neutral market" territory. These ranges will change from week to week but we have seen steadying in more price categories. Currently at $800,000 and above there are four homes under contract and one closed sale-but 148 on the market.

	Gig Harbor	Gig Harbor	Gig Harbor		Key Peninsula	Key Peninsula	Key Peninsula
	Oct 2009	Sep 2009	Oct 2008		Oct 2009	Sept 2009	Oct 2008
# Sold	50	49	41		23	25	21
Sales Price	377,250	362,000	417000		252,250	191,000	337,000
YTD Price Change	▼6%				▼11%
# On Market	615	695	750		186	200	215
Absorption	12 mo	14 mo	20 mo		8 mo	8 mo	10 mo
Market Time	128	182	210		139	172	186
LP/SP Ratio	96%	96%	93.6%		94%	97.25%	95.5%
Pending	75				30

Here is a smattering of other market tidbits

• 31% of listed homes in Gig Harbor are vacant-40% in Key Peninsula.
• 22 homes flipped from pending status to active in October-half the number that flipped in third quarter. Many of these stem from financing issues or short sale procedures.
• Seattle has the highest rate of commercial real estate (new construction, subdivisions) in default in the nation-31% of all loans.

Gig Harbor home sales-and prices--should continue to firm up over fall and winter, with legislation just signed into law that extends the first-time homebuyer $8000 tax credit as well as expanding the program to give a $6500 credit to owners living in their home for the past five years. I can see price pockets during the next two to three quarters where demand equals the supply, which serves to increase the median price.

Carole Holmaas is an Associate Broker at Windermere Real Estate, licensed since 1967. She may be reached at Carole@ISellGigHarbor.com or 253.549.6611. Her real estate blog may be read at http://blog.ISellGigHarbor.com

Gig Harbor waterfront sales will beat 2008

Waterfront buyers sat on the sidelines from November through March. But April, May and June produced an abundance of sales of Gig Harbor waterfront homes, closing in May through July to end summer on a far better note that it started. And sales through the end of October have actually tied with year-end of 2008. If all 15 homes that are pending close, the year will end down only 15% from 2006 and 2007.

Inventory has plummeted since April. Following the subprime lending news in September and October last year, inventory of Gig Harbor waterfront skyrocketed and sales were non-existent. November through April ran a steady 9-10 year supply of waterfront properties with a nominal single property closing each of those months. May through July saw the inventory absorbed, with 12 homes closing escrow in July.

July's closings swept away a lot of Gig Harbor waterfront inventory and it continued momentum, creating 21 new pendings. October has also produced two pendings on properties listed over $1million.

Prices on high end homes are still trending downward. But sellers have become savvy in pricing their homes and September closings of Gig Harbor waterfront showed transactions closed at an average of 91% of the original list price. This is far better than the 78-84% differential experienced most of this year. Cash buyers have leveraged their cash and felt confident the "bottom of the market" was nearing. They purchased some great properties in the past few months-for as much as a 30% discount.

Approximately 30% of homes sold in the first month of listing and over 34% sold after more than four months, the balance falling between one and four months.

In September I commented the overall median price for all Gig Harbor waterfront properties this year would likely be $100,000 less than 2008, which was $800,000. That appears to still be the case with the median sales price at $690,000 year-to-date.

The table shows the activity and prices in each of the areas thus far this year. It is notable that two areas-Wollochet/Cromwell and Horsehead/Arletta are experiencing sales prices very close to their median list price. Wauna and Key Peninsula are two other areas selling quite close to the list price

Area	On Market	Pending	Sold	Median List Price	Median Sale Price
Gig Harbor Bay	13	3	4	$1,300,000	$953,000
Wauna	3	0	2	$700,000	$575,000
Rosedale	5	0	2	$1,295,000	$512,000
Key Peninsula So	14	2	7	$537,000	$480,000
Fox Island	23	1	7	$1,100,000	$690,000
Wollochet/Cromwell	19	2	10	$1,000,000	$1,055,000
Horsehead/Arletta	39	4	4	$1,075,000	$1,055,000
Gig Harbor No	4	1	0	$714,000	no sale
Key Peninsula No	12 Total 132	2 Total 15	4 Total 40	$785,000 All Areas $946,000	$556,000 All Areas $693,000

Carole Holmaas is an Associate Broker with Windermere Real Estate in Gig Harbor, licensed since 1967, specializing in waterfront and view properties. She can be reached at 253.549.6611 or Carole@ISellGigHarbor.com. Comment on her blog at http://blog.ISellGigHarbor.com

Gig Harbor home sales start to equalize in Key Peninsula

A snapshot of Gig Harbor home sales shows a nearly balanced market for Key Peninsula mailing addresses. Zip codes 98329 and 98394(Wauna, Vaughn and Key Center) have just slightly more than a seven month supply of homes in inventory.

A balanced-or neutral market-is generally considered six to seven month home inventory, based on number of sales in that month. When the number drops below six months it generally becomes a seller's market.

6.3 months of inventory was normal in this area during the strong sales years of 2002-2007 so the current seven months supply is a very strong number. A high of 40 months was reached last January.

Median prices are still dropping-over 10% in third quarter compared to the same period last year, with 15 closings-a high percentage of "bank-involved" sales pulling prices down. A perspective on prices over the past few years--the current median sales price--$209,000--equals first quarter 2005 when homes were selling for 99% of listed price.

The median price will only increase when buyers have an appetite for something other than foreclosures and short sales and when consumer confidence is restored. Unfortunately, locally there are still many foreclosures in the pipeline.

The zip codes of 98349 and 98351 (Longbranch, Lakebay and Home) have only an 8.9 month inventory of homes, based on the sales pace in September. This is looking positive for an area that experienced a 6.9 month supply of homes during the boom years of 2002-2005 but has been running double digits and a high of 49 months supply last November.

The median sales price is down for third quarter by 15.4% representing 10 sales. In this area the median price has been "reset" to prices established the first nine months of 2005 when homes were selling for 98.5% of listed price.

This table shows Key Peninsula zip codes 98329/98394 and 98349/98351 for Gig Harbor home sales for September 2009 and 2008.

Gig Harbor home sales	98329 & 98394	98349 & 98351
Number of active listings	▼29.5%	▼21.9%
Number of homes sold	▲50%	▲42.9%
Median sales price	▼ 10.7%	▼15.4%
(3rd Qtr comparison)	$209,000	$176,000
Number months inventory	▼53%	▼50%
(based on closed sales)	7.3 months	8.9 months

Readers must be careful not to read too much into a single month comparison but these figures are encouraging to local Realtors. The 17-month graphs below show the bigger picture in Gig Harbor home sales in these zip codes. With the median price hovering at and below $200,000, homes in these areas have been snapped up by first-time buyers as they receive the $8000 tax credit. This tax credit is expected to be extended. Month-to-month figures will continue to fluctuate as the market continues to stabilize. And expect inventory to climb as winter takes it toll on sales

98349 and 98351

98329 and 98394

Throughout the entire Gig Harbor and Key Peninsula market area, sales for October are on track to close higher numbers than last year. Several price ranges are showing the first signs of strength in a year, namely in the low $500's and the mid $400's and $600's.

Carole Holmaas is an Associate Broker at Windermere Real Estate, licensed since 1967. She may be reached at Carole@ISellGigHarbor.com or 253.549.6611. Her real estate blog may be read at http://blog.ISellGigHarbor.com