We’ve closed the door on the first month of 2012 so let’s examine how we did in real estate.
Gig Harbor and Key Peninsula Combined Market L
This reflects the combined markets of Gig Harbor and the Key Peninsula. Sales activity for these individual areas are reviewed below.
The snow and ice storm created a wild week for everyone and contributed greatly to the reduced unit sales for the month. With only 38 closed sales, total unit sales in the combined Gig Harbor/Key Peninsula market were down nearly 40% from the 63 units sold in December 2011. Yes, January is typically a slower month but when compared to January of 2011 we still realized over a 9.5% decline. The Average Price of $327,005 took a double digit decline for Owner Occupied and Short Sales, with Bank Ownedposting a 35% gain. The Median price of $314, 750 for the combined area and sales type fluctuated with nearly a 13% increase, with the Short Sales realizing an 18% drop in price. The recent trends don’t support a drop in unit sales of this magnitude, so I would predict that we will likely see a correction next month.
This large percentage drop in total units sold also has a negative impact on the absorption rate, which estimates how many months it will take to sell the current active properties. January did post a 3.23% reduction in active listings from 588 to 569, which often helps in lowering the absorption rate. However, due to the nearly 40% drop in closed sales, the opposite occurred and the three month sales absorption rate increased from 8.9 months to 11.3. Now, keep in mind that this is calculated on the narrow time frame of three months where one poor month can have a great effect on the stats. If we look at a broader absorption rate that includes the last twelve months unit sales average, we get a little more positive view. Here for the past three months (Nov., Dec., Jan.) we have seen the rate decline from 9.6, to last month’s 8.8 to the current 8.6 months. Basic Supply and Demand; the fewer homes on the market creates more stable or increasing prices. This declining trend steadily inches us toward a healthy market of the five to six month absorption rate.
Let’s now take a look at pending sales which is a great indicator of the coming months sales numbers. Currently there are 153 homes under contract as 31 Pending Inspection, 92 Pending and 30 Pending Short Sale in the combined Gig Harbor Key Peninsula area. This equates to an increase of 17%, or 22 units, over last month. With over 50% of these pending sale priced between $200 and $400K this remains the strongest market price area. Keep in mind that these are ‘Pending’ sales and that not all of these will close in February, or at all. This is only an indicator of what the sales numbers may be in the months ahead.
Gig Harbor Market L
No other way to say it; Gig Harbor had a terrible month in closed homes sales in January. Total units sold dropped from Dec. by over 53% to a mere 22 total units sold, and down nearly 30% from Jan of 2011. Sales also posted an increase in days on market (DOM) of 63% to 178 days from the prior month. Median and Average prices also dipped into negative territory with nearly 7% and 18% declines or $326,150 and $357,807 respectively. Bank Owned sales, also down in units, posted the only positive activity with gains in both Median and Average prices to $236,750 and $267,613. But with a total of only 4 sales in this category the numbers can be swayed easily by a single sale.
Active listings decreased by over 5% to 397, which would normally cause the absorption rate to also fall, but with the lower units sold in January this caused the three month absorption rate to increase to 11.5 months inventory. Overall, listing prices had a very modest increase in both Median and Average price by 2.26% and 2.61% respectively.
Of the 153 homes pending mentioned above, 117 of these are in Gig Harbor as 25 Pending Inspection, 66 Pending and 26 Pending Short Sale. Of the 117 pending homes in the Gig Harbor market, 76% are price between $200 and $400K which remains the strongest market price range in the area.
Owner Occupied homes continue to outnumber the Bank-Owned (foreclosure) and Short Sales in Gig Harbor closed sales. This dominance of owner occupied closed sales will provide greater stability in Gig Harbor Market in coming months.
Key Peninsula Market K
Key Peninsula sales held steady posting 16 closed sales for the second month in a row. This is fairly good news because the sales didn’t decrease as with Gig Harbor, and this is actually an increase over Jan 2011 units sale of only 11 closed sales. Another positive note is that in total sales, both Median and Average prices posted increases of 18.77% and 52.50% to $216,750 and $284,653 respectively.
Of the 16 closed sales, 9 were bank owned or short sales. This distressed home sales majority has had negative effects on owner occupied home pricing in the last few months. But January posted very nice increases in owner occupied of 24.76% ($264,500) and 81.68% ($343,857) to the Median and Average prices respectively. This is the sixth consecutive month where distressed properties have outnumbered or equaled owner occupied sales, but a welcome reversal of recent declining prices.
Active listings had a slight increase of just over 2% to 172 listings. With these we also received a slight increase in the median and average listing prices of 1.10% ($232,425) and 2.92% ($276,776) respectively. With the increase in listing inventory, the three month absorption rate increased to 11 months of inventory. This remains a high factor and with inventory at this level it remains a buyers’ market on the KP.
Looking towards coming months, 36 homes are pending as 6 Pending Inspection, 26 Pending and 4 Pending Short Sale. This remains about average with the past few months, but with only 4 homes pending short sale we may be seeing owner occupied sales outnumber distressed in the near future. If this does materialize there should be a corresponding increase in Median and Average prices as well. In these Pending categories, the most active price range had a small increase to between $140K and $350K.
Recap
2012 did not start out with great numbers. Gig Harbor posted very poor closed sales with a decrease in prices and increase to DOM. The KP had one of its better months with steady sales, an increase in prices and a decrease in DOM. It has been a while since I have been able to post positive activity for the KP, and it is very welcome news.
There are some amazing values in the market right now and interest rates are unbelievably low. If you know anyone who may be able to take advantage of this market please let me know or have them get in contact with me.
Are you curious about where I get the information for this report? In preparing the market activity spreadsheet and recap, I look at single family residential and condominiums only. I do not include Manufactured Homes (where the land is leased or rented) or multiple family units, as these sales are few but tend to skew the numbers greatly. The units sold, DOM, and pricing figures are taken from Northwest MLS reports and entered into the spreadsheet where the percentages are calculated. If you have questions regarding your specific location, feel free to contact me for a more defined report.
No comments:
Post a Comment