KINGSTON — Kitsap is “the eddy” to Seattle’s fast-current market, according to Frank Wilson, Kitsap district manager for John L. Scott Real Estate and a member of the Northwest Multiple Listing Service board of directors.
“Our homes are still selling nicely, with a medium amount of multi-offer activity and a normal-market spring ramp-up,” he said.
In March, the median closing price of a home in Kitsap County was $230,550 — a 32.10 percent increase over the same month last year, according to the Northwest MLS, which tracks real estate data in 21 Washington counties.
Kitsap County tied with Tacoma for fourth-highest closed-sale price, behind No. 1 San Juan County, No. 2 King County and No. 3 Snohomish County.
In March, real estate agencies reported 507 new listings in Kitsap County, 1,287 total active listings, 435 pending sales, and 246 closed sales.
“Price appreciation is a two-edged sword,” Wilson said. “Too much, too fast will land us where we were a few years ago. Slow and steady appreciation is what we are seeing now and hopefully in the future. This will allow the average-income earner in Kitsap to still be able to qualify for a home.”
Wilson also noted “significant investments” being made in Kitsap by businesses such as Harrison Medical Center and Safeway. “Investments like these are not made unless the businesses are bullish on the future growth of Kitsap County,” Wilson said.
Regionwide, Northwest MLS figures show year-over-year prices jumped 14.9 percent for the 21 counties in its service area. The median price for last month’s closed sales of single family homes and condominiums (combined) was $258,500, rising from $225,000 for the same month a year ago. Twelve counties reported double-digit gains, led by Ferry (up 70.9 percent), San Juan (up 47.3 percent), and Island (up 36.1 percent).
Incomes not keeping pace with home prices
Public optimism about the housing market is “not without justification,” according to Brenda Prowse of The Prowse Group Realogics Sotheby’s International Realty.
“Nationally, the Case Shiller Price Index shows that home prices are up more than 8 percent from a year ago and several economic experts have predicted price increases of another 6-9 percent in 2013,” Prowse reported on www.bprowse.com.
“Still, it’s worth keeping in mind that a lot of the market upswing is being driven by the government’s monetary policy ... With near-zero interest on short-term treasuries and the government guaranteeing 90 percent of all mortgage loans, even private equity firms have jumped into the housing market, driving up prices in many areas.”
April’s APR is 3.663 percent on a 30-year loan and 2.913 percent on a 15-year, both conforming, Prowse reported.
“Both have dropped a bit since last month. If you qualify for FHA, VA, or USDA loans, these programs are attractive for low-down-payment buyers. The conventional and FHA loan limits are $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 3.734 percent on one major bank website. To check the daily rate, you can contact your lender or preview websites such as this one: http://bankrate.com.”
Prowse cautions home affordability could easily become out of reach for many buyers if incomes don’t keep pace with rising prices.
“Although home prices have risen, the cost to borrowers has remained relatively constant since mortgage interest rates have fallen a corresponding amount,” Prowse reported.
“Eventually, interest rates must rise. Since incomes have only risen 2 percent in the past year, that means that either homes will become far less affordable and the market will stall, or a much more vibrant economic recovery must occur so that incomes can rise enough to compensate for the additional cost.”
According to Prowse, 40 percent of pending sales this year involve distressed properties, including 28 percent short sales; 17 percent involve new construction.