Gig Harbor Undressed

Gig Harbor Real Estate Weekly Report

I wanted to take a look at year vs. year home sales in Gig Harbor for this week’s report.  We hear of so many different statistics being thrown around regarding the real estate market, but rarely is there any practical applications for the statistics.  The chart below shows YTD statistics for 2008, 2007, and 2006, respectively.  All three years are January 1st-February 25th of the respective years.

Two of the most glaring numbers I see are # of homes sold and the comparison of List $ to SOLD price.  In ‘08, you can see we’ve sold less than 1/2 of what sold in ‘07 during the same time frame, and less still than in ‘06.  The other glaring number is the discrepancy between what sellers were asking and what they were getting.  You can see in ‘06, the median SOLD price was 100% of the median asking price, versus 92% in ‘08. 

When I look at these numbers as a seller, I’m not overly optimistic.  HOWEVER, I believe it should be remembered that the average US homeowner owns their home for 5-7 years.  So, looking at the same time period in 2002, we see that Gig Harbor sold 79 homes at a median price of $220,000 (average price of $215,000)!  While it’s true that prices for Jan/Feb have dipped the past 2 years, they’ve still more than doubled since 2002!  Would I recommend selling now if it was just a fancy and you were wanting to test the market?  No.  I don’t think this is your best time.  If you are ready to sell (moving, need to downsize, having a baby and need more room) then know that you CAN sell your home in this market…BUT it must be in top condition, priced REALISTICALLY for today’s market, and marketed aggressively (click on the photo below).  A sign in the yard and a photo or two on the MLS won’t cut it.

So, why if the prices are dropping do people keep saying it’s a bad time to buy, also?  Those voices are generally the ones trying to time the market.  Have we seen the slowest point?  I don’t think so.  I think all of ‘08 and possibly into ‘09 we’ll see this dragging market.  So if you’re looking to simply invest in real estate and snatch up properties, is now the time?  Probably not.  But if you’re ready to move (being relocated to Gig Harbor, need more space, tired of renting), it’s a great time to buy.  Less than 1/2 the homes are selling than in past years, our inventory is higher than it’s been in years, sellers are clearly taking less than what they’re asking…so remind me again why buying now is a bad idea if you’re ready?  As a buyer, make sure you are well represented.  Find out what homes are actually selling for, don’t be afraid to ask for repairs if the home needs them, request that the sellers pay your closing costs…buy the home on your terms.One thing that many people forget about buying a home is that there are people involved, not just properties.  “Low balling” a seller isn’t something I practice.  “Price Puffing” is also something I want my sellers to avoid.  I’ve been called “nothing more than a used car salesman” more than once, which is fine with me because one of the men I respect the most in this world is the son of a used car salesman.  He was a man of integrity and knew that he wasn’t just selling machinery, but that people were involved, too.  You can be a salesman, car or home or otherwise, and still operate with integrity, treating people fairly and making sure that both parties involved feel good about the deal.  When I sell a house, regardless of whether I’m representing the buyer or the seller, I like to pretend that the offer is laid on the table on a Lazy Susan.  If the table was spun and all of the sudden I found myself on the other side, would I still be happy?  If so, it’s a great deal; if not, let’s try to keep working! 

If you’re needing to sell or wanting to buy a home in Gig Harbor or the surrounding area, please give me a call and find out just how easy of a transaction it can be. 

Another look at Gig Harbor’s Real Estate Absorption Rate

For my weekly look at the Gig Harbor real estate market, I wanted to revisit the absorption rate of houses for sale in the area.  As a reminder, the absorption rate measures how long it will take for our current home inventory to be completely sold, or absorbed.  To calculate this number, we take the current number of homes for sale in Gig Harbor, and divide that by the number of houses selling each month. 

Currently there are 572 homes for sale in Gig Harbor.  Over the past 3 months, we are averaging 24 home sales per month (only 20 homes sold in Gig Harbor during January).  At this current pace, if no more homes were listed for sale, our current inventory wouldn’t be sold until January of 2010!  Port Orchard has a much better scenario, as their absorption rate is only 12 months, exactly half that of Gig Harbor.  Port Orchard has 621 homes for sale, and is averaging 48 home sales per month over the past 3 months. 

So what do these numbers mean for you if you are needing to sell your home soon?  PRICE IT WELL!  Houses are still able to sell quickly, when they are priced correctly.  Of the 72 Gig Harbor houses to sell the past 3 months, the average days that they spent on the market was 191 days.  However, 24 of the 72 homes sold in 3 months or less.  This is a perfect example of how house pricing affects the statistics. 

If your house is overpriced to begin with, not only will it be sitting on the market with the other 572 homes, but it will have the additional competition that gets listed each week.  On January 6 of 2008, there were only 500 homes on the market in Gig Harbor.  You can see how our inventory is rising.  An overpriced home quickly gets pushed further and further down the list, quickly becoming a “stale” listing.

So how do you know where to price your home?  Have a Realtor analyze what similar homes have SOLD in the past few months.  Don’t make the mistake of basing your home’s value on what else is currently on the market.  Let’s say the data for SOLD homes shows your value to be around $455,000, for example, but you’re positive your home is nicer than the one down the street listed for $485,000, so you decide to list at $495,000.  What happens?  The one listed for $485k has been sitting, so they do a price reduction to $470k.  A new home comes on the market for $465k.  You drop yours to $475k to try and keep up.  Meanwhile, the other two homes, still over priced, do price reductions, and now you’re chasing the market.  By the time your home sells, it may have been sitting for 9 months and been reduced $50k.  Don’t let that happen.  Look at the SOLD numbers, swallow your pride, don’t gamble, and let your house sell.  Make sure you hire a Realtor who can swallow his/her pride as well.  Many real estate agents have been accused of “buying” listings; that is, telling the seller they can sell it for more than any other agent just to get the listing, only to start the priced reduction game later.  Don’t get me wrong, this isn’t the case for every house that has price reductions.  Sometimes the seller and the agent just guess wrong; sometimes there are factors that can’t be controlled.  If you under-price your home, chances are you’ll get multiple offers which may end up driving the price of your home up even more.  If it’s not under-priced, and is in fact priced well, it should sell within a month.  There are so many buyers out looking right now, tired of the over priced homes, that the instant a well priced home pops on the market they’ll be ready to snatch it up.  For more information on the area’s absorption rate, or further details on preparing your house for sale, please feel free to contact me.

Gig Harbor Real Estate Weekly Report

Each Monday I like to track home sales in the Gig Harbor, Port Orchard, and Key Peninsula areas.  Real estate is a local market, and no national report can ever give you the flavor of a local report.   Below is a chart showing the total number of homes for sale in Gig Harbor and the surrounding areas at week’s end for each week of ‘08 thus far.  As you can see, inventory is still rising, though at a fairly controlled rate.  Gig Harbor has more homes listed for sale each week than homes actually selling, an obvious indicator of rising inventory.

Bottom line?  If you are thinking of buying in this area, you’ve got a great selection.  If you are wanting to sell your Gig Harbor house, you need to make sure it is in top condition, priced right, and marketed aggressively.  I’d be happy to offer assistance in both cases. 

Gig Harbor Home Sales Report

 Here is my weekly look at the Gig Harbor, Port Orchard, and Key Peninsula real estate market.  The following graphs show how many single-family homes were listed for sale each week, and how many homes went under contract for sale each week.  You’ll notice that this past week saw a decrease in homes on the market (inventory), and an increase in pending sales (activity).  One week doesn’t indicate a trend, but it is encouraging to see houses moving. 

For a full report on homes for sale in Gig Harbor, or if you are looking to move to Gig Harbor and would like more information on our real estate market, please feel free to contact me.  This information is free to you!

Gig Harbor Real Estate Report

Here’s a look at the weekly Gig Harbor Real Estate report:
Homes new on the market:  31      Total homes on the market:   558

Homes newly pending:   7               Total homes pending:   34

Port Orchard Real Estate Report:

Homes new on the market:  53         Total homes on the market:   601

Homes newly pending:  7                    Total homes pending: 54

Key Peninsula Real Estate report:

Homes new on the market:  11          Total homes on the market:  260

Homes newly pending:   3                   Total homes pending:   13

For a full real estate report on Gig Harbor and the surrounding area, please feel free to contact me.

Charting Gig Harbor’s Home sales

Last week I began a weekly segment showing the home sales activity in Gig Harbor, Port Orchard, and the Key Peninsula.  I like to compare homes that have come active on the market versus homes that have gone to “Pending,” meaning they have a signed around contract between buyer and seller that is simply pending a close.  I believe that these comparisons give a good glimpse into Gig Harbor real estate (as well as Port Orchard real estate and Key Peninsula real estate).

The numbers from week 2 of 2008 are almost identical to week 1’s numbers, with one notable exception.  Port Orchard saw 16 homes go to Pending this week, compared to only 2 in week 1.  Both Gig Harbor and the Key Peninsula only had 2 homes go Pending in week 2.  Gig Harbor had 33 new homes come active on the market, while KPN only saw 12, and Port Orchard had 40.

Keep in mind that some of these numbers can be a bit skewed.  For example, a home that has been on the market for 6 months may “Expire,” then re-list, thus showing as a “New listing.”  It’s always a good idea to ask your Realtor what a home’s property history is.   How long has it been on the market, any price reductions, etc.

For full reports on the Gig Harbor area real estate market, please email me at mthomson@kw.com or call me at the number listed at the top of this site.

Gig Harbor Real Estate’s Absorption Rate

Statistics don’t lie.  You can make them say just about anything you want, so they can be very deceiving, but they don’t lie.  Real estate is full of statistics.  One of the numbers that I find to be important is what is referred to as “Absorption Rate,” the rate at which the market could absorb all of the houses currently for sale.  To calculate this number, I look at how many homes are currently on the market, and divide that number by the number of homes that sell each month.  If, for example, there were 600 homes on the market, and 50 sold each month, it’d take 12 months for all 600 homes to sell (be absorbed). 

Looking specifically at Gig Harbor real estate, there are currently 517 homes on the market in Gig Harbor.  Averaging November and December’s numbers, we are selling 26 homes per month.  That means our absorption rate is 19.9 months.  If nobody else put their home on the market in Gig Harbor, and houses continued to sell at their current rate, it’d take essentially 20 months for all of the houses for sale in Gig Harbor to sell! 

That’s an important number to keep in mind when you are thinking of selling your home.  Does that mean that when you list your home, it’s going to take a year and a half to sell?  Of course not.   It means that you had better seriously consider your home’s condition, the price that you’re asking, and the terms that you’re willing to accept when you put your home on the market. 

Let’s say for example there are 25 homes on the market in the $385,000-$400,000 price range, the range you believe your house falls in.  If you put your house on the market and it’s not in pristine condition, or you price it at $399,900 because you’re sure it’s nicer than those other homes, chances are you’ll still be sitting on the market in several months because not only do you have the 20 months worth of absorption, but you’ve got new houses coming on the market each week pushing yours further back.  If on the other hand you have your house in tip-top shape, priced closer to the bottom of that price range, your house will be the one that attracts the buyers, leaving the other houses to wallow on the market longer.

20 months is a big number for an absorption rate.  It doesn’t mean houses aren’t selling and it doesn’t mean that you can’t get a good price for your home.  It simply means that you’d be wise to invest some time preparing your house for sale and researching the market to best price your home.  I’d be happy to share with you some tips that I’ve learned to make sure your home is in its best condition, and I’d be happy to give you a professional market evaluation to give you a good idea of what your home’s current value is.

Charting area home sales

One of my goals for ‘08 is to keep accurate, weekly charts of the Gig Harbor, Port Orchard, and Key Peninsula housing market and pass them on to you.  Ideally, at the end of the year you’ll have a nice line graph showing how many houses were listed for sale each week, how many homes went under contract each week, how many total homes were for sale as of that week, and how many total homes were under contract as of that week.  This will be for single family homes only, as the condo market in Gig Harbor is pretty scarce, as is the market for multi-family homes…you can ask me specifically if you’re interested in condos, multi-family, or vacant land.

For now, we’ll start with a basic bar graph since we only have one week to work with.  The charts below show the real estate activity for Gig Harbor, Port Orchard, and the Key Peninsula for the week ending January 6, 2008.  Please feel free to contact me for full information, more details, or to discuss what this all means.

Gig Harbor Condo Market

Condos aren’t a really big part of the Gig Harbor real estate scene, but for those looking to buy a vacation home or second home in Gig Harbor, there are some condos that would be a great buy. 

YTD in 2007, 51 condos have sold in Gig Harbor, ranging from $185,000 to $1.295M.  Currently, there are 74 condos on the market ranging from $185,500 to $2.3M.  Our condo market includes new construction units such as those found in McCormick Ridge, condo conversions such as the Harbor Glenn condos, established popular complexes such as Narrows View condos, and waterfront units like Herron Pointe and Edgewater Condos. 

For a full list of condos for sale in Gig Harbor, you can visit my home search website or contact me directly.  As a full service Realtor, I’d be happy to introduce you to Gig Harbor’s diverse, though sparse, condo market.

Waterfront Home Sales in Gig Harbor

Each market seems to have a type of housing that ranks as the most desirable.  When I lived in Park City, ski-in-ski-out housing was prime.  In Santa Barbara, the Montecito Estates were the benchmark.  Here in Gig Harbor, waterfront homes seem to garner the most interest.  Gig Harbor is unique in the astounding numbers of waterfront and waterview homes that we have.  It makes navigating a bit tricky, because you can’t judge where you are in relation to the water, because we’re surrounded by water.  I wanted to take a look at waterfront home sales in our area, looking at Gig Harbor, Fox Island, and the Key Peninsula.  Often I’ll include Fox Island homes as part of Gig Harbor, but for waterfront I decided to separate it out, mostly for my own curiosity!  Here are the number of homes sold and the median prices.

As you can see, prices in Gig Harbor and Fox Island are very similar.  The Key Peninsula offers more affordable waterfront, but you’re going to be further away from many of the necessities and amenities of Gig Harbor. 

2005-2006 are yearly sales, 2007 are YTD sales, and Current are homes currently on the market.  For current, I used median list price, rather than sales price.  Info is taken from NWMLS, and I believe in some cases the listing agent took some liberties with “waterfront.”  Information is deemed reliable but is not guaranteed.

If you would like to view the current homes for sale, check out my home search site or contact me directly.