Gig Harbor Undressed

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. 

November sales slip in Gig Harbor

I tend to be an optimist when it comes to our housing market, and although the numbers below don’t look great initially, I’m going to stay optimistic.  Looking at Gig Harbor, the Key Peninsula, and Port Orchard, home sales for the month of November have taken a dip.  I read three things from these numbers.  1)One month of statistics doesn’t indicate a trend,  2)If you are looking to sell, make sure you are priced in the lower 20% of your competition so you can sell quickly, and 3)Now would be a good time to move up or buy an investment property if you were leaning that direction.

Port Orchard

*DOM is the days a home was on the market

Here’s an interesting statistic that goes along with this.  Go back up to Gig Harbor’s November sales for ‘07.  You see 23 sales at a median price of $430,000.  Currently, there are 545 homes on the market in Gig Harbor, with a median asking price of $624,900.  Of those 545 homes, only 17 are priced in the median sales range of $415,000-$445,000.  It goes to show that statistics can be helpful, but they can also be dangerously misleading.  It isn’t difficult, with numbers like these, to present them in such a way that I can either scare you into thinking the sky’s falling, or amaze you that our median price is over 1/2 million dollars.  My point, don’t take the media’s doom saying as truth, take the time to call on a professional to really analyze the numbers with you and give you the statistics that YOU want to know about…what is relevant to YOUR situation.  I’m a numbers geek, so I’d love to crunch numbers with you!

Gig Harbor Homes For Sale

In this blog, I periodically look at the current local real estate market.  Today, I want to look again at homes currently for sale versus homes pending sales.  These numbers show that now is a great time to buy real estate in Gig Harbor.  Prices continue to rise all over Western Washington, which is good news for sellers, but the saturated home market indicates that this is one of the best opportunities for home buyers.

In Gig Harbor, there are currently only 34 homes pending sale, versus 599 actively for sale.  On the Key Peninsula, 20 homes are pending, while 273 are active.  Port Orchard has 64 pending homes, and 597 homes for sale.  Below is a look at the price range break down for homes actively for sale in Gig Harbor.  For the breakdown on other areas, please call or email me at mthomson@kw.com.

Gig Harbor

<$300,000                         30

$300,000-$399,999       102

$400,000-$499,999       80

$500,000-$599,999        81

$600,000-$699,999        71

$700,000-$799,999        79

$800,000-$899,999        45

$900,000-$999,999        26

$1M-$1.5M                       54

$1.5M-$2M                       19

$2M+                                 10

Gig Harbor Real Estate Market Overview

Here’s a quick look at home sales over the past six months in our area.  For a quarterly look, please visit my other website. 

Market Overview

Gig Harbor Market Overview

Each week I’d like to take a look at the local real estate market.  There are many different ways of analyzing a market, and I’ll employ many different ways over the weeks.  This week I’d like to look at our housing inventory.  Gig Harbor real estate expert and fellow Keller Williams agent Mike Esteb taught me the formula used here that shows our market conditions as a “buyer’s market,” “seller’s market,” or “balanced market.”  By looking at the ratio of homes with pending sales vs. homes actively for sale, we can determine what our market conditions are.  A ratio of 0-45% of pending homes vs. homes for sale indicates a buyer’s market.  46%-55% indicates a balanced market, while 56% and above indicates a seller’s market. 

Below you can see that Gig Harbor is firmly in a buyer’s market both with homes and condos.  This is great news for buyers, as it provides the best opportunity in several years to invest in Gig Harbor real estate.  It’s not bad news for sellers, though.  Homes are still selling, and prices are still rising.  It simply means that sellers must price their home right initially and make sure their home is getting full exposure to the most amount of buyers.  For more information on this chart, what it means, how to read it, and other ways of evaluating our market, please email me at mthomson@kw.com.