February 2012 was an interesting month for real estate in Kitsap County. Here’s how home sales for February 2012 compared with the same period one year ago:
|# of Homes Sold||+ 9.8%|
|Average Home Selling Price||- 8.3%|
|% of Homes Sold that were Distressed||+ 38%|
The significant increase in the number of distressed properties being Sold is the most significant factor in the decrease of the average home selling price in February 2012. Many of these distressed properties (Bank owned foreclosures & Short Sales) are selling for significantly less than the current market prices at any given time and area.
According to an article which appeared in DSnews on January 25. 2011, foreclosure homes sold for 34% less than the average price of a non-distressed home during the 3rd quarter of 2011. In Kitsap County we are also seeing a similar trend, but REO properties (foreclosures) are not being discounted quite as much, however; they are on average being Sold at a discount to current market prices. So, when we see foreclosed (REO) properties comprising an increasing percentage of the home sales during any given month, the average selling prices tend to decrease.
Interestingly, Short Sales were down significantly for the month so as a percentage of the total distressed properties that were Sold in February, Short Sales only comprised about 18%. In our business, we have noticed increasing difficulty getting Short Sales approved and we have also noticed less willingness on the part of some lenders to negotiate the selling price or anything with regard to Short Sales. Therefore there are fewer Short Sales.
The challenges and often excessively long times involved in getting Short Sales approved has finally drawn the attention of congress. Recently, Senators Lisa Murkowski (R-AK), Scott Brown (R-MA), and Sherrod Brown (D-OH) proposed a Bill that would require mortgage lenders to make a prompt decision regarding a short sale. It will require a written response from the lender no later than 75 days after the receipt of the written request by a Buyer.
If approved, the impact should be positive. Short Sales sell at closer to market prices than foreclosed properties. So, in my opinion this will have the effect of stabilizing home resale prices and will significantly reduce the number of Short Sales that flip back onto the market. Currently, many of the flipped short sales are the direct result of buyers becoming frustrated from waiting ridiculously long periods of time with no response from the lender(s).
Overall, the current Real Estate market in Kitsap County is very active and we believe the current situation with relatively affordable home prices, good inventory of bargain properties, (which sell quickly) and continuing low interest rates; combined with an improving economy make this a great time to be Buying Real Estate.
We are seeing a lot of activity in all sectors of the real estate market but particularly note the increasing activity from real estate investors. The other areas that are starting to see increasing activity after a long period of very slow sales are land sales and second homes in rural areas offering coveted amenities like waterfront, view and secluded quality acreage.
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