February 2010 Kitsap Real Estate Market Statistics

Pending sales in February rebounded while closed sales declined, following the pending sales trend of the past two months. Short sales, foreclosure sales, and even some non distressed sales are delayed or are failing to close because of the added difficulties in getting bank approvals and the more difficult lender climate, which makes it more difficult for any borrower to obtain a loan. In January, there were 172 closed sales and 252 pending sales. In February there were 130 closed sales and 309 pending sales. Shown below is a graph of month-by-month pending sales vs closed sales. 

Shown below are graphs of inventory and inventory turnover for Kitsap County in 2007-09.  The County has a listing inventory turnover rate of about 11.9 months, slower than January's 8.35 months and a significant slowdown from the end of last year. Inventory increased and the number of closed sales fell significantly in February. The inventory turnover also varies by price range, with higher priced homes selling more slowly than lower priced homes. We’ve made the point recently that the higher price ranges will be more difficult to reduce in inventory because with today’s lending environment the pool of buyers have been greatly reduced. See the graph below for a better perspective.  Note that inventory turnover above $1 million was positively scintillating - not a typical month for that price range. 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 February (1550 listings) is about 8% higher than January and down about 13% from a year ago. The number of listings rose a second month in a row and many months of decline. This may be evidence of a more typical seasonal listing curve, with then number of properties for sale rising into mid summer and falling off as the we get later into the year. We may at least see some of the shadow inventory become active again as foreclosures increase and sellers come back to test the market.

Kitsap Listing Inventory

Pending and Closed Sales

The number of pending sales in February was up 21% compared to a year ago. The statistics for February pending sales (compared to February sales last year) varied for different parts of the County. Below is a busy graph showing the 3 month moving average of pending sales for different parts of the County. The nearly uniform rise in pending sales bodes well for closed sales in future months, even though closed sales were weak in February.

Despite the weak closed sales in February, the 3 month moving average number of closed sales Countywide is up 37% compared to a year ago, down from plus 57% last month. The strength of pending sales indicates that closed sales should rebound in coming months. Closed sales were down 4% compared with February 2009.

Median Sales Price
The median price in Kitsap County has been pretty steady this year, and is up slightly from the beginning of the year. February's median price ($252, 435)  rose about 5% compared to January (see graph of 3 month moving average below), and is 12% higher than a year ago. This rise in median price is almost certainly a change in the mix of homes selling rather than an across the board increase in home prices. The homebuyer tax credit now includes incentives for move up buyers, and there is more pressure on owners of higher prices homes to sell for a bargain, considering that unemployment continues to rise and that banks are now starting to end the trial loan modifications, which will put more underwater homeowners in danger of default and foreclosure. Even though the national unemployment has remained fairly flat at about 9.7%, Kitsap County’s unemployment has been rising, up to 8.3% in January from 7.8% in December.The current low median price coupled with historically low interest rates offers good affordability. Conventional mortgage rates are now just below 5% for 30 year loans. There is speculation that rates will rise later this year, and one significant factor is the Federal Reserve's stated intention to curtail its purchases of GSE (Fannie Mae and Freddie Mac) mortgage backed securities. Jumbo loans are offered at about .8 to .9% higher than the 30 yr fixed rate conventional.  The conventional and FHA loan limits remain at $475,000 in Kitsap County, which has helped sales of higher priced homes. The VA loan lender imposed limit is back to $417,000. The homebuyer tax credit was reworked last year to give some incentive to move up buyers as well as first time buyers. We have reworked our median price graphs to show a 3 month moving average of prices, which will better show trends and reduce the month-to-month fluctuations.

Kitsap Median List Price

The February median list price rose from $299.900 to $306,125, about a 2% increase with rise in inventory. Median list prices have fallen significantly since a year ago as sellers became more aggressive in getting their properties sold.