Kitsap Real Estate Blog

National Prices Still On The Downslide.

Have a look at what’s happening in national markets housing markets.

Housing Prices Down by 0.6% in April 2008

Tags: housingprices, real estate markets

Popularity: 31% [?]

It’s a buyer’s market for housing, no doubt about it. Cash is king but you need to have the cash in order to sit on the throne…or do you?

You have probably heard a lot about the mess in the mortgage markets. By my unofficial count banks, mortgage companies and investment bankers have announced over one hundred billion dollars in losses because of “faulty loans” made to people with less than perfect credit. A billion here, a billion there, pretty soon it adds up.

These losses have thrown the financial markets into a tailspin. The Federal Reserve acted quickly to lower short term interest rates. That, combined with sudden and steep losses in world stock markets led investors to sell stocks and buy safe bonds such as US Treasury Securities. This led to lower interest rates on bonds and lower home loan rates.

Hooray! Lower rates, falling home prices..this is good for new folks who want to buy homes today, right? Well, sort of.

At the same time the two largest purchasers of home loans in the US, Fannie Mae and Freddie Mac announced new rules that effectively raised rates and tightened lending standards for people with lower credit scores. Before December 26, 2007 borrowers with FICO scores of 620 and higher could qualify for zero down loans with very attractive interest rates, say at 6.5%. On December 27 these two giants announced rules that effectively raised those rates as high as 8.5% for borrowers with a score of 620 and decreased the amount of income they would allow for total debt service. People with scores above 700 got access to even lower cost rates.

Ouch! That is a 25% increase in home loan rates for people with low scores. Did your income increase by 25% during that two days? Did your credit score improve to 700?

Oh, oh. Effectively, people with credit scores under 700 may not be able to borrow! No loan, no home, right?

Well, maybe not.

The turmoil in the mortgage market has brought about a change of thinking. Many people are beginning to dust off the techniques used in the 70’s and 80’s, a tough time in the real estate and finance markets and use innovative financing techniques that in effect give buyers and sellers the opportunity to create their own capital outside the system of traditional lenders.

More concretely, lease purchase financing and seller financing are bobbing up to the surface as viable alternatives for people who have been shut out of the institutional marketplace. To find out more about how to mix traditional and alternative lending to your advantage visit the Kitsap Real Estate Advisor.

Changes are in the making for unsecured lending as well. What I think are revolutionary changes in how lending may look in the future are being implemented successfully by online “people to people” lending efforts like Prosper.com. Take a look at the future and see how it might help you and everyone else.

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Bad real estate news (for owners and sellers) continues to pour in from markets around the country. In San Diego, home builders are auctioning off tracts of new homes at 50% of their retail price. In Detroit auctioneers hold auctions…and nobody shows up! With the implosion of the American automobile industry Michigan is losing population.

So, what is the implication for Kitsap real estate and the state within which it is located? Here are some real estate facts recently issued by the Washington State Association of Realtors:

”

LOW FORECLOSURE RATE

Foreclosure rates today are the same as they were ten years ago. Fewer than one percent of mortgages end in default in Washington state. As of mid-June, adjustable rate loans represented 20 percent of loans nationally, but just 6 percent of home loans in Washington.

STRONG MARKET
Home appreciation in Washington continues to out-perform the rest of nation with regular price increases every quarter since the spring of 1995. Real estate has been, and will continue to be, stable long-term investments.

STABLE INVENTORY

The key to stability in the residential real estate market is balance – a six month supply of homes available on the market at any given time.

WHY WASHINGTON IS DIFFERENT

The home market is not keeping pace with the growth of the state’s population. The state’s population is projected to increase by nearly one million over the present decade and reach 6.8 million residents by 2010. Most growth occurs from within the state – not new residents relocating from other states.”

Buyers need not fear plummeting values if they buy today. Investors must move cautiously in the new market reality but opportunities abound for well constructed real estate investing.

Popularity: 99% [?]

You Can Make Money in Real Estate - ABC News

The national news continues to be bad for many US housing markets…but not the Seattle area. ABC News and Forbes magazine have identified the greater Seattle area as one of the top ten markets likely to continue to experience hosuing valuation appreciation. Why?

According to Jim Hebert of Hebert Research, Inc., the I-5 corridor counties are poised to experience a robust growth in net new jobs over the next five years with companies like Microsoft, Google and bio-tech companies all adding to payrolls.

technorati tags:kitsap, real, estate

Popularity: 75% [?]

Building Owners Call for Swifter Action on Downtown PO Plan - Kitsap Sun (Subscription)

It’s getting hotter in the downtown Port Orchard real estate community. A large number of downtown properties have changed hands, raising expectations to a fever pitch. Some of the longer term owners are taking measures to speed up the process. A revitalized downtown community has the potential to change South Kitsap drastically with broad implications for property values in the entire area.

Planning processes and political leadership can block or enable progress. Mayor Bozeman has made impressive progress in Bremerton. Elections for a new administration in Port Orchard are due this fall. Lary Coppola, a front-running mayoral candidate vows changes to assist in economic development. Stay tuned.

technorati tags:port, orchard, real, estate, kitsap, real, estate

Popularity: 85% [?]

Housing market still shows signs of slowing - TheNewsTribune.com (subscription)

Is it a buyer’s market or a seller’s market? Compared to the torrid
pace of 2005-2006 it has definitely moved toward the buyer’s position.
But wait, this article says that Kitsap Couunty real estate pricews
moved up 10%, year to year, from 2006 to 2007. Is that really a
“buyer’s market?. What do you think?

technorati tags:kitsap, real, estate, kitsap, county, real, estate

Popularity: 100% [?]

The issue of building heights in downtown Port Orchard is hot…for uphill residents, merchants and the new property owners who have recently purchased big chunks of downtown. The new owners need to work with the city council and the residents to hammer out rules that will allow the needed re-development of the downtown into a vibrant commercial community and improve and enhance the views enjoyed by residents currently. Take a read of the latest developments:

Council Digests Downtown Port Orchard Plan, a Detail at a Time - Kitsap Sun (Subscription)

technorati tags:port, orchard, real, estate, new, homes, in, port, rchard

Popularity: 83% [?]

New Homes In Port Orchard - Market Report

New homes in Port Orchard are perhaps the most exciting opportunity for first time and move up buyers throughout the entire Puget Sound region.

Port Orchard real estate also known as South Kitsap real estate will likely be the focus for a number of major regional and national builders for quite awhile.

Take D.R. Horton, Quadrant Corporation and and Chaffey Homes for instance. They have tied up thousands of acres of Kitsap County real estate land with potentially more than 10,000 new home sites in an area that will be easily accessed from the I-5 corridor over the second Tacoma Narrows Bridge scheduled for completion later in 2007.

Greater Port Orchard also known as South Kitsap county is home to some 140,000 residents from the Pierce and Mason counties borders up to Gorst. In spring of 2007 there were approximately 164 new homes on the market immediately available for purchase with another 104 under contract.

Inthe last six months from roughly November 2006 through April 2007 217 new homes were sold at an average sold to list ratio of 100.3%.

Smaller builders offer very attractive semi-custom and custom home options on rural lots or in-fill lots that the larger homebuilders cannot manuever efficiently. Homes from these builders tend to be larger with larger lot sizes and are typically in-fill developments.

The larger builders have price on their side because they are often vertically integrated companies with resources from standing timber to the finished home and can slice a bit of the margin here and a bit of the margin there for impressive value delivered in large volumes.

Know your stats. That is the only way to have the knowledge to negotiate the right price for your new homes in Port Orchard.

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Bremerton real estate bears watching. Bremerton is a growing community in Kitsap County real estate. With a population of 34,580 people in 2005 Bremerton has historically been the urban center of rural Kitsap County real estate.

Due primarily to military deployments Bremerton actually lost population from 2004 to 2005. Despite the loss of population average home sale prices for Bremerton Wa real estate rose dramatically with an average gain of about 16% for 2006. That could be due in part to the fact that Kitsap county ranked 7th in the state for family income at $51,982 in 2005. Kitsap County as a whole ranked the lowest for population growth of the six counties including Kitsap, King, Snohomish, Pierce, Mason and Jefferson in 2006.

Bremerton plays a larger role in the economy of the county because it is the site of the Puget Sound Naval Shipyard and a homeport for several U.S. Navy ships. With over 13,000 civilian employees plans for the shipyard and homeport affect the economic outlook for the entire Kitsap County. During World War II employment at the shipyard grew to over 80,000 people. Housing was scarce and much of the housing stock in existence today was constructed with orders from the military. Much of that older housing stock was actually pretty good quality but today many real estate investors and homeowners are buying Bremerton Washington houses on developed lots to tear them down and re-build.

The State of Washington recently reported strong growth in the construction and services sector which partially offset osses at the shipyard due to a re-organization of the mix of activities conducted there. While is has slowed from that torrid pace average Bremerton Washington houses average sale prices may rise 5-8% again in 2007, particulary because of the successful development of Bremerton condos along the waterfront. That combined with massive public investment in the ferry-Kitsap Transit intermodal development, government office buildings, a waterfront park and convention center, marinas, hotels and street retail has everyone buzzing about the bright future of Bremerton. Some of those people working in the more than 130,000 jobs in downtwon Seattle, only half of whom living in the city own their homes, might well be attracted to lower cost housing in a newly developed exciting small urban center less than an hour commute away by water. Forward looking people investing in real estate might well see many opportunities with a move to Bremerton as an attractive Seattle area real estate alternative.

Popularity: 82% [?]

PO City Council: Visualize 55 Feet - Kitsap Sun (Subscription)

This article from the Kitsap sun reports on deliberations taking place on thew Port Orchard City Council about building height limitations in downtown Port Orchard real estate. It is timely and important, particularly now because of the success of downtown Bremerton real estate developments over the past 2 years with more to come.

Full disclosure: I have represented many downtown property owners in buying and selling Port Orchard real estate and will likely continue to do so.

The height limit discussion has alot to do with the economics of developing the land under the old buildings there now. There is lot of nostalgia associated with downtown Port Orchard. There are things about it that I would miss too if it were to change.

The problem is that the utility and road infrastructure, parking and mostly the condition of the buildings will hold back attarction of new businesses and residents who could contribute to the cultural and economic vitality of our home, Port Orchard. I respect the opinions of those who hold an opposing view but no one can claim that the commercial community of downtown is vibrant and growing.

Commercial property owners in downtown will need sufficient density in order to justify the cost of building new, attractive buildings that provide new opportunities for businesses and residents alike. Building heights are one regulatory method but due consideration must be given to density bonuses to encourage development. There is enough room to incent developers to take the enormous risks involved and protect views while creating agreat new downtown that anyone would enjpy looking itself.

More later.

technorati tags:Port, Orchard, real, estate, Bremerton, real, estate

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