May 2012 Kitsap Real Estate Market Statistics

The number of closed sales in Kitsap County in April fell about 10% from March and was about 2% higher than a year ago. Pending sales rose about 4% compared to last month and were about 43% higher than a year ago, a substantial increase. In March, there were 206 closed sales and 382 pending sales. In April there were 186 closed sales and 399 pending sales. 29% of the closed sales were distressed properties (38% last month). This trend of sharply rising pending sales and falling closed sales strange. Our experience has been that each sale is difficult to close and the timeline for the sale is longer than usual. 25% of the pending sales were distressed properties (29% last month). Among closed distressed sales, bank owned sales were about 4 times the number of short sales closed. More non distressed sales are occurring as we move into the summer months. Shown below is a graph of month-by-month pending sales vs closed sales. Pending sales tend to lead closed sales in direction if not magnitude by about 2 months (April being a clear exception to this trend). Based on past trends, the it looks like the number of closed sales will rise next month, perhaps a sharp increase as more of the pending sales finally close.

 

Shown below are graphs of inventory and inventory turnover for Kitsap County in 2008-12. The County has a listing inventory turnover rate of about 7.5 months, slower than the 6.3 month turnover rate in March. Only the turnover rate for sales in the $500-600k and above $700k ranges were greater than 10 months, so inventory is moving better across middle price ranges. Inventory turnover is the number of months it would take to sell the current inventory at the current rate of sales. In April, the number of listings rose slightly and the number of sales fell 10% compared to March. We've made the point that the higher price ranges will be more difficult to reduce in inventory because today's lending environment has greatly reduced the pool of qualified buyers. There were 8 sales (6 on Bainbridge Island) in the $800k and above range among 96 listings County-wide in that price range. Note that inventory in this price range rose 35% last month whereas overall inventory only rose 7% - lots of high priced homes coming on the market. Every seller is in a price war and beauty contest at the same time. If your price is not best among comparable properties, the chance of sale is very small. Below is a historical depiction of the changes in the ratio of listings to closed sales.

Listing Inventory

Kitsap County's residential inventory in April (1395 listings) rose 7% from March and is about 12% lower than a year ago. Distressed properties listed in the MLS make up about 19% of our market (21% last month). At the end of April, RealtyTrac showed 473 (492 last month) Kitsap County homes either in default, in foreclosure, or bank owned. At the beginning of 2011 there were 1473 distressed properties, so we've seen a decline of more than 60%. The MLS shows only about 56% of the distressed property inventory, so there could be as many as 205 distressed properties that have yet to be put up for sale. While this is a large potential increase, it is much smaller than at the start of 2011.

Kitsap Listing Inventory

Pending and closed Sales

 

The number of pending sales in April was up 43% from a year ago and was up about 4% from March. The statistics for April pending sales varied for different parts of the County. Below is a graph showing the 3 month moving average of pending sales for different parts of the County.

  

Closed sales were fell by 2% compared with April 2011 and were down by 10% compared to March 2012. The more stable 3 month moving average number of Kitsap County closed sales is up 4% compared to a year ago.

Median Sales Price

 

Kitsap County's monthly median closed sale price in April ($242,500) was up 11% compared to March and up 15% compared to a year ago. The more stable 3 month moving average (see graph below) of the median closed sale price ($206,717) is up 10% from month and the same as a year ago. Median price fell sharply at years end and now appears to have recovered to about the same as last year. These movements in price don't indicate that market prices are rising, but rather that the middle among all sales is at a higher price because there are more sales in the higher price ranges. More non distressed sales are occurring in the summer months, following the normal seasonal trend. This change in the types of buyers produces a rise in median price. Our median price graphs show a 3 month moving average of prices, which better shows trends and reduces the month-to-month fluctuations. Below it is a graph showing closed sales by price range for the past several months.

 

The April median list price was $274,900, about 2% higher than last month and 5% lower than a year ago.

Affordability

We assume that a buyer making the median family income puts 20% down on the median priced home and obtains a 30 year fixed rate mortgage. We assume that a first time buyer making 70% of the median income puts 10% down on a house priced at 85% of the median and obtains a 30 year fixed rate mortgage with mortgage insurance.  We assume that both buyers can afford to spend a maximum of 25% of their monthly income on the principal plus interest of the loan. Using the annual averages of median price, median income, and average annual 30 year fixed interest rate since 2001, we plot an affordability index equal to the maximum affordable payment divided by the actual payment. When the index is greater than 1, the loan is affordable to the typical buyer. When it is less than 1 some buyers cannot afford to purchase. Mortgage insurance quotes are dependent on credit scores - MI for a FICO credit score of 700 might be $20 per month higher than MI for a credit score of 750. We use 750 and have corrected all PMI values to be consistent with this. Our numbers for 2011 are estimates using the latest monthly data for median prices, interest rates, and median income. As a point of reference the index in 2001 was 1.31 and the first time buyers index was .89.

Housing became less affordable from last month because the median price rose 10% and interest rates fell only a small amount. The affordability index fell to 1.39 in May from 1.53 in April. The first time buyer affordability index also fell to .93 from 1.02 in April. If you compare to past years, you'll see that affordability is still. Lending standards have tightened considerably, and many borrowers may not qualify for the best available interest rate. Below is a graph of the year-to-year changes in affordability and a second graph showing month-to-month affordability over the past year.

Year	2006	2007	2008	2009	2010	2011	2012
Annual Average interest rate	6.41	6.34	5.80	5.03	4.80	4.48	3.80
Median Income	$57876	$55430	$61106	$60890	$60455	$60455	$60455
Median Price	$275000	$290343	$265000	$244499	$240353	$235,000	$242,500
Monthly payment	$1378	$1443	$1244	$1054	$996	$950	$904
Affordable payment	$1206	$1155	$1273	$1269	$1259	$1259	$1259
Affordability Index	0.88	0.80	1.02	1.20	1.25	1.33	1.39
1st time buyer payment	$1317	$1381	$1189	$1008	$952	$988	$949
1st time buyer affordable payment	$844	$808	$891	$888	$882	$882	$882
1st time buyer affordability index	0.59	0.54	0.68	0.80	0.84	0.89	.93

 

 

May 's APR is 4.051% on a 30-Year and 3.308% on a 15-Year, both conforming. April's APR were 4.178% on a 30-Year and 3.434% on a 15-Year, both conforming. If you qualify for FHA, VA, or USDA loans , these programs have are attractive for low down payment buyers. As a result of recent Congressional action, the conventional and FHA loan limits have again been raised to $475,000 for Kitsap County. A typical 30 year fixed jumbo APR (with total costs of the loan, not just the rate factored in) is 4.256% on one major bank web site. To check the daily rate you can contact your lender or preview web sites such as this one - http://bankrate.com/.