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Real Estate Market • January 26, 2021

Fourth Quarter Review and 2021 Forecast for North Kitsap

by Windermere Poulsbo
real estate model houses

Poulsbo’s North Kitsap market saw a strong end to 2020. We’ve compiled key highlights from our fourth quarter as well as some useful insights from Windermere Real Estate’s Chief Economist, Matthew Gardner. Gardner also offers his 2021 market forecast with some uplifting and interesting predictions.

Q4 North Kitsap market stats

Our Strong Seller’s Market

Poulsbo’s inventory remains low while demand is high from people moving away from the bigger cities. Buyers, the market is in the usual seasonal slowdown – but not as slow as expected given COVID-19. There are still many eager buyers outnumbering sellers. Our Brokers have seen an increase in situations where some buyers are outbid either by price or by an all-cash offer.

In 2020’s fourth quarter, the average sale price in North Kitsap was up 21.3% year-over-year at $597K. Sale prices continue to hover close to listing prices, indicating strong demand.

North Kitsap market sold graph

average listing price graph North Kitsap

2021 Forecast 

In his final Monday with Matthew video of 2020, our Chief Economist, Matthew Gardner, shared his 2021 forecast for the housing market. He’s optimistic and for some good reasons.

First off, Gardners expects mortgage rates will not rise significantly on a local level, nor will they vary significantly throughout different regions across the U.S. Since mortgage rates are heavily tied to 10-year treasury maturity rates/yields, rates shouldn’t rise significantly until the entire market recovers from the COVID-19 slowdown.  Another great sign is that Gardner expects home sales will grow significantly, from 5.55% in 2020 to 5.93% in 2021. That’s “to a level we haven’t seen since 2006,” Gardner explains.  With the continuation of historically low mortgage rates and the consistent increase of home values, 2021 looks bright.

“No! There isn’t a housing bubble forming. But price growth will slow & sellers may feel like it’s a collapse … it isn’t collapsing, it’s just normalizing.”

Matthew reminds us that there are pitfalls to be wary of in this strong market. First and foremost: “we need more inventory.”  With the shuffling to new homes, and the huge wave of “first-time buyers [that] will continue to be a major player in the housing market,” many are making moves in a flood that will not persist. Buying during the pandemic will slowly settle. People are expected to stay in their homes longer, especially homeowners who have chosen to refinance. House values will rise due to the lack of supply, and that may price out many buyers who want to purchase in our area. 

Western Washington’s Market Report

For a big picture glance at how our local market compares, here are highlights from The Western Washington Gardner Report.

WESTERN WASHINGTON HOME SALES

  • Total Sales: 26.6% increase from Q4/2019, but 8.3% lower than Q3/2020
  • Homes for Sale: 37.3% lower than Q4/2019, and 31.2% lower than Q3/2020
  • Pending Sales: up 25% from Q4/2019, but 31% lower than Q3/2020
WESTERN WASHINGTON HOME PRICES
  • Average: $617,475 (up 17.4% from Q4/2019). This continues the trend of above-average appreciation of home values.
  • Interestingly, prices between Q3 and Q4 of 2020 only rose by 1%.  Is there a price ceiling we’re reaching?
  • Mortgage rates will stay competitive as the market continues to charge toward a price ceiling and potential affordability issues.
DAYS ON MARKET, WESTERN WASHINGTON
  • Average: 31 Days (16 days less than Q4 just one year ago)
  • In Kitsap County, average days on market: 17

Conclusion

Yes, it’s a Seller’s Market once again.  Matthew Gardner says, “I am moving the needle even further in favor of sellers.”  Here’s why: Covid-19 continues to push homeowners to stay put while renters flock to the countryside.  The resulting limited supply has “caused the region’s housing market to be incredibly active.” Matthew does warn that there may be “affordability concerns” that could prevent some homebuyers from entering the market and eventually slowing growth.
2021 will continue the trend of working from home, which keeps demand high. This, in turn, will drive sales growth, while affordability barriers will balance our current runaway appreciation for home values.
Sellers • December 8, 2020

4 Reasons to Sell Your Home in the Winter

by Windermere Poulsbo
house for sale winter windermere sign

Not sure if winter is the time to sell your home? Although the real estate market tends to slow down as it gets colder, you can actually use this season to your advantage. Here are some points to consider.

1. Supply is Low and Demand is High

According to Realtor.com’s Monthly Housing Trends Report, national inventory has dropped 39% since last year. Though this may seem discouraging, the key takeaway is that fewer people are selling their homes, which means less competition. While many buyers like to look for homes when there’s nice weather, serious buyers will still be looking in the winter.

There are many anxious buyers in our area right now. Our region has seen a significant increase in demand. 2020’s 3rd quarter pending sales went up by 29% compared to Q2 and the median sale price was up 9% year-over-year at $508K for North Kitsap. Additionally, many families are able to work from home so they have the flexibility to relocate. Kitsap County is attracting many buyers since we’re just a ferry ride away from Seattle, and it’s still very much a seller’s market.

2. Interest Rates Are Low

Mortgage rates hit all-time lows a dozen times during 2020. As of December 3, 2020, Freddie Mac reported that rates on a 30-year and 15-year fixed-rate mortgage (FRM) have dropped to 2.7% and 2.3%, respectively. These low-interest rates offer enormous incentives for home buyers. 

3. Home Prices Are Up

Since there aren’t enough houses on the market to meet the current demand, prices have gone up. So, you can potentially sell your house for top dollar. In fact, we’ve recently seen quite an increase in multiple offer situations across Kitsap County. If you’ve properly prepared your home and your agent is marketing it effectively, you may also experience a multiple offer situation. 

4. Cost of Living is Rising in Cities

Many residents continue to get priced out of cities like Seattle, and buyers are looking for more affordable places to call home. Kitsap Peninsula offers easy access to the city while maintaining a close distance to the profound natural beauty of the PNW. The prospect of getting more for your money appeals to many first-time buyers as well as those looking for luxury homes. Our area offers buyers more space, a home with a yard, and easy access to beaches, hiking trails, and the Olympic National Forest.

With the real estate market in constant flux due to the pandemic, it’s essential to stay up-to-date on the latest local market information and to consider all your options when putting your house on the market. A good agent will also provide you with helpful insights, serving as your knowledgeable advocate and guide – whether you decide to sell in winter or down the road. 

Real Estate Market • October 22, 2020

North Kitsap’s Market: Third Quarter Review and Forecast

by Windermere Poulsbo
North Kitsap market graph

North Kitsap’s market had a very strong third quarter. We’ve compiled key stats below to provide a comprehensive review of our market, as well as insights and predictions from Windermere Real Estate’s Chief Economist, Matthew Gardner.

Our Strong Seller’s Market

It’s a strong seller’s market here in North Kitsap. Inventory remains low while demand is high. In our third quarter, the median sale price was up 9% year-over-year at $508K. Buyers should be aware that multiple offer situations have become more common in our area. Our Brokers have seen an increase in situations where some buyers are outbid either by price or by an all-cash buyer. 

sold pending graph north kitsap county

inventory graph north kitsap county

north kitsap real estate stats

Market Predictions

Although mortgage rates remain historically low and demand is high, our Chief Economist, Matthew Gardner, has some concerns about how this may impact real estate down the road. “We may be heading towards a period where we see houses turn over at a far slower pace as we stay in our homes for longer than ever…this could be a problem as it leads to persistently low levels of inventory for sale, which itself could lead to prices continuing to rise at above-average rates and that would further hit affordability.” As for mortgage rates, Gardner does not expect them to rise significantly any time soon. However, he says, “We should all be aware that there could be consequences to very low rates”.

Western Washington Review

Let’s zoom out a bit and look at our area. Below are highlights from The Western Washington Gardner Report provided by Windermere Real Estate’s Chief Economist, Matthew Gardner.

WESTERN WASHINGTON HOME SALES

  • Total Sales: 11.6% increase from Q3/2019, and 45.9% higher than Q2/2020
  • Homes for Sale: 41.7% lower than Q3/2019, but up 1.6% from Q2/2020
  • Pending Sales: up 29% from Q2/2020

WESTERN WASHINGTON HOME PRICES

  • Average: $611,793 (up 17.1% from Q3/2019). Low mortgage rates and limited inventory are clearly pushing prices up.
  • Prices will continue to increase as long as mortgage rates and inventory levels stay low. If this continues to be the case, affordability issues will become more apparent in many markets.

DAYS ON MARKET, WESTERN WASHINGTON

  • Average: 36 days (an average of 4 fewer days than in Q2/2020 and 2 fewer days than in Q3/2019)
  • In Kitsap County, average days on market: 20

Conclusion

In Gardner’s Western Washington Report, he states that, although we have a strong seller’s market that is very buoyant, he’s “starting to see affordability issues increase in many areas—not just in the central Puget Sound region—and this is concerning. Perhaps the winter will act to cool the market, but something is telling me we shouldn’t count on it.”

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