Will Farms In Kitsap Be Preserved As Productive Farmland and Open Space or Subdivided For Housing?

Hansville Nursery

Jim Freeman, associate broker at Coldwell Banker Park Shore announced on February 15, 2010 the listing of the 144 acre Hansville Nursery land for sale. Also known as the Old Homestead Plat the owner, Olympic Property Group LLC, a subsidiary of Pope Resources Group, has operated the land as a Douglas Fir tree nursery for more than 20 years. Recent price and volume declines in the lumber industry forced a decision to shutter the nursery operation in 2009 and put the property on the market.

Download a sale brochure for the Hansville Nursery here.

The infrastructure improvements installed to support the nursery operation make it an ideal site to consider conversion to pastured grazing and eventually vegetable and fruit production. The improvements include a cold storage warehouse, a processing warehouse, a two bay equipment maintenance garage, a five bay tractor shed, four miles of drain tile to collect and manage water storage ponds, a well, an irrigation system, truck dock, three phase power, an office, restrooms and crew room. The entire property is surrounded by an eight foot deer fence and adjoins densely populated housing subdivisions known as Shorewood. Neighborhood residents often enjoy walks through the property and many have asked about the possibility of preserving the property from further subdivison.

What's Next For Kitsap Farm?

Because of the old Homestead Plat plans a portion of the property enjoys paved and gravel roads. Public water is available from a system that adjoins the southern boundary. No sewers are available in the area.

Farms play a significant role in Kitsap cultural, historical and economic life although most people are unaware of this. The Kitsap Conservation District has estimated that there are 9 major watersheds in the county and a greater number of lesser watersheds with 1,874 tax parcels as being used for agriculture not including Christmas tree farms. The total area of these parcels is 10,819 acres with an average size of 6.3 acres. That being said the trend in recent years has been a diminishing acreage under cultivation in the county and a trend away from local food production to things like hay production and equestrian uses.

As a member of a community organization dedicated to building a local food network Jim Freeman and the Kitsap Community and Agricultural Alliance have been active in efforts to preserve farmland in Kitsap County and plan for succession of aging farmers. The KCAA has efforts underway to apply for farmland preservation grants through the Washington State Conservation Commission and the Recreation and Conservation Office. Discussions have also been held with the PCC Farmland Trust and the Great Peninsula Conservancy.

Other uses for the property as improved include tree nurseries, forest land and open space. Otherwise, the property is capable of subdivision into as many as twelve building lots due to the current zoning and historical entitlements.

For more information please visit Land For Sale In Kitsap County.

The National Association of Homebuilders and Wells Fargo publish research about the affordability of housing in all metropolitan statistical areas (MSAs) in the country. The report for the fourth indicates that 63.6% of homes in the Bremerton/Silverdale MSA were affordable for the median income family. They report that the median income was $70,900 per year and the median home price was $232,000.

A lot of people believe that foreclosure homes are affordable and a good bargain. To get your customized list of foreclosure homes for Kitsap and Gig Harbor visit Kitasap Bank Owned Properties.

71% of all U.S. Homes Are Affordable

According a quarterly report from the National Association of Home Builders and Wells Fargo, the typical American family, who makes the nation’s median income of $64,000 a year, could afford to buy 70.8% of all homes sold in the United States during the last three months of 2009.   That’s off just a tad from the record 72.5% reached during the first three months of 2009, but up substantially from the second quarter of 2008 when only 55% of homes sold were affordable.  “Favorable mortgage rates and sliding house prices that have now started to stabilize nationally have both contributed to a record year for housing affordability in 2009,” said NAHB chairman Bob Jones, a home builder from Bloomfield Hills, Mich.  The NAHB judges a home to be affordable if a family making the metro area’s median income could devote no more than 28% of their take-home pay toward housing costs.

There was a huge variation in affordability around the nation. All five of the most affordable major housing markets were in the Rust Belt, led by Indianapolis, which has been the nation’s most affordable major metro area for more than four years. More than 95% of all home sold there were classed as within the budget.  Detroit was the second most affordable major market with 93.4%, followed by three Ohio cities, Dayton (93.2%), Youngstown (93%) and Akron (92.2%).   New York was the least affordable market; less than 20% of homes met the criteria. San Francisco (22.3%), Honolulu (33.8%), Santa Ana, Calif.,. (34.5%) and Los Angeles (36.8%) filled out the bottom five.  The most unaffordable small market was San Luis Obispo in California, where only 32% of homes sold were attainable for median-income families.

Foreclosures are on everyone’s mind these days. The media, homeowners facing foreclosure, lenders, real estate licensees, first time home buyers and move up buyers. I have reported earlier on how the foreclosure homes inventory has reached such proportions that when viewed as a class, foreclosure home sales have become the elephant in the room determining the price of just about every other home on the market.

As far as buyers are concerned the question is not so much about foreclosures as about questions like:

• How can we buy a house?
• How do we get a good deal?
• How can we find money to buy a home?
• Can we do any of these with our credit the way that it is?

Buying a home successfully is a question of following a duplicatable system. It is possible to make some huge mistakes in buying, possibly costing you tens of thousands of dollars or sticking your family in a home that just will not work for them or you. Buying bank foreclosures does not necessarily mean that you will get a good deal. Buying the right home in a market dominated by foreclosure pricing can be.

I have assembled some awesome tools for first time and move up buyers alike at www.KitsapRealEstateAdvisor.com. You can search for properties in Kitsap and Gig Harbor ( or really anywhere within the territory covered by the Northwest Multiple Listing Service), request custom lists of special properties such as bank owned properties, zero down homes, waterfront homes, new construction, golf course properties, land and commercial properties.

Registered members of the site can save their multiple searches for later review and comparison. We have weekly tours for these properties that give people who are still trying to decide if they wish to begin the home hunting process a chance to get inside some homes that might be a really good deal and see how it feels without any cost or obligation.

Over time we will be adding more content and value to the site including an online course to teach buyers the get-it-right-every-time system for buying a home the right way. Please visit www.KitsapRealEstateAdvisor.com for the next few weeks to see what is new. See you there

• Can you tell me how to buy foreclosure homes in Kitsap?
• Can I get financing for foreclosures in Kitsap?
• What are Kitsap Foreclosures really selling for?
• How do I get the best deal on a foreclosure home in Kitsap and Gig Harbor?
• Who is the best buyer’s foreclosure agent in Kitsap and Gig Harbor?
• Who is best to help me buy a foreclosure in kitsap or gig harbor?
• Are foreclosures really a good deal?
• Where are the bank foreclosures in Kitsap and Gig Harbor?
• Where can I search foreclosure listings, best place?

A great place to get lists of bank owned properties in Kitsap and Gig Harbor is here:

Foreclosure Listings

I also have started a new service to let seekers actually get inside foreclosure homes to have a look before even thinking about making an offer on a home. Every Saturday I organize a tour of foreclosed homes. You can read more about it at:

Kitsap and Gig Harbor Foreclsoure Tours

To understand some of the fundamentals behind this massive force affecting the current market, here are some recent housing news excerpts to ponder:

Treasury’s Home Affordable Modification Program (HAMP) status report recently omitted information on how many of the 650,000 borrowers are keeping up with the payments on their trial modifications.  Lender Processing Services, which is a huge mortgage data aggregate, and suggests the news is not good:  “LPS’ October Mortgage Monitor also cites large “shadow” foreclosure and REO inventories. The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline. Nearly one-third of foreclosures remain in pre-sale status after 12 months – twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further.” Howard Glaser, an expert on the expanding subprime lending crisis, says:  “What I am most worried about is March and April of next year.  What happens to a housing market that seems like it is finding its footing at that point?  Because several things will happen simultaneously:  You’ve got the option ARM resets beginning to kick in, you have the home buyer tax credit expiring, maybe for  real that time, and you have the Federal Reserve maybe running out of money to buy mortgage-backed securities. If we add on top of that, banks beginning to release some of this inventory,which they have been holding on to for a long time, those three items are potentially very destabilizing to the marketplace.”

A Senior Advisor to the Treasury Department, made a recent off the record statement recently:  “In discussing the Obama Administration’s Home Affordable Modification Program (HAMP), which is arguably less successful than anyone intended, Wheeler made a comment leading some to believe that the Administration may be shifting focus from modifications to another program which simply gets troubled borrowers out of their homes as quickly and cleanly as possible.  Wheeler told ASF members and guests, ‘Short sales, deeds in lieu are other ways to prevent foreclosures to help achieve stability [in housing].  Modifications are only for a certain subset of distressed homeowners.’”  Olick points to the widely acknowledged failure of HAMP and suggests that Wheeler’s mention of the Home Affordable Foreclosure Alternatives program (HAFA) is indicative of a shift in emphasis for the Obama administration.

HAFA specifically targets short sales and deeds in lieu of foreclosure. According to the directive: Servicers must consider possible HAMP eligible borrowers for HAFA within 30 calendar days of the date the borrower: Does not qualify for a Trial Period Plan; Does not successfully complete a Trial Period Plan; Is delinquent on a HAMP modification by missing at least two consecutive payments; or requests a short sale or DIL. “My guess is that last one is the most popular.  The HAFA program offers incentives in this program “upon successful completion of the short sale” or Deed in Lieu. They include borrower relocation assistance of $1500, a servicer incentive of $1000 to cover administrative and processing costs and investor reimbursement of $1000 for subordinate lien releases. That’s when the investor allows up to $3000 in short sale proceeds to go to subordinate lien holders.  ‘It is my belief that the success of HAFA will be vastly greater than HAMP,’ says Mark Hanson, a mortgage consultant in California.  ‘Going forward, figuring out exactly what this means for foreclosures, REO, house sales, housing inventory, values, bank balance sheets, second mortgages, RMBS prices, the builders, the mortgage insurers, and sentiment is where the focus will be.’”

Foreclosures in kitsap putting more homeowners under water

Real estate website Zillow.com says one of every five U.S. home owners owed more on their mortgage than their home was worth in the fourth quarter. The percentage of American single-family homes with mortgages in negative equity rose to 21.4% in the fourth quarter from 21% in the third quarter, according to the Zillow Real Estate Market Reports. U.S. home values declined again in the fourth quarter, as the Zillow Home Value Index fell 5% year-over-year and down 0.5% quarter-over-quarter, to $186,200. It was the 12th consecutive quarter of year-over-year declines, the reports showed. “The prevalence of markets in or near a double-dip situation shows that we are not yet at the bottom, in terms of home values,” Stan Humphries, Zillow chief economist, said in an interview.

One in five, or 29 of the 143 markets tracked by Zillow, had at least five consecutive month-over-month increases in home values during 2009 before values began to flatten or fall again in the second part of the year. These markets included the Boston, Atlanta and San Diego metropolitan areas. Zillow said it defines a “double dip” as two periods of sustained declines in home values separated by a brief period of stabilization or recovery. Foreclosure resales remained high, making up 20.3% of all U.S. home sales in December. Foreclosure resales also made up the majority of sales in several metropolitan areas, including Merced, California, at 68.3%; Las Vegas, at 64 percent, and Modesto, California, at 62%. Additionally, 28.5 percent of home sales nationwide sold for less than what the seller originally paid. Home values increased year-over-year in 27 of 143 markets and remained flat in 15.

My “unofficial” study of markets in Kitasap County indicates that foreclosures in Kitsap home sales  and short sales indicates that the ratio of these sales may be as high as 30-40%.

Search For Foreclosures In Kitsap

The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally adjusted monthly price changes from October to November ranged from –0.4 percent in the East South Central Division to + 2.3 percent in the Pacific Division.

Housing Price Index Changes

Hey, that means that housing prices in the greater Seattle SMSA have risen 2.9% for the year from November of 2008 to November of 2009. From November of 2007 to November of 2008 that index fell  22.0%. I like the trend. That’s good, isn’t it?

Well, not so fast.

Diana Olick of CNBC spoke with Rick Sharga of RealtyTrac, and he elaborated on the formal report we talked about above, giving her his thoughts on the coming year and 2011.  He expects to see several different spikes in foreclosures over the coming year and into 2011, and he believes wholeheartedly that these foreclosures will be unavoidable and highly detrimental to a recovery in home prices.  “Even if we peak in terms of unemployment rates in the first quarter of 2010 the foreclosure activity related to those job losses probably won’t peak until the end of 2010 or the first quarter of 2011,” says Sharga. And he believes there will be a third wave from resets on pay option ARM loans and Alt-A loans (loans underwritten with little to no documentation).  Olick:  “There is more and more talk of principal write-down, as the underwater elephant in the room weighs heavily on any recovery.  Today I even heard that the Hope For Homeowners program, which came into being under the Bush administration and did very little to help anyone stay in their home, may be retweaked to deal with the underwater issue (when borrowers owe more than their home is worth).  Part of H4H is principal write-down, unlike the big HAMP bailout from Treasury which requires no reduction of principal.”

Only in the past year, CY 2009 did the NWMLS begin “tagging” homes that were listed and sold as bank owned or short sale properties so the data is not complete for the year. My unofficial tally of bank owned homes sold in Kitsap for the year was 287 units out of 2,599. That is 11.04% of all solds in Kitsap County on incomplete data. If you throw in short sales and other distressed sales I will bet that number begins to approach 20-30%.

According to the Kitsap Economic Development Alliance (KEDA) the unemployment rate in Kitsap County was estimated at 7.6% in November of 2009, lower than the national average.

Kitsap Employment Statistics

Conclusion: Inventories of foreclosures and bank owned homes in Kitsap County will continue to be the major influence on price. We are likely to see an increasing supply of Other Real Estate Owned (OREO) clogging up bank balance sheets and housing inventory for the foreseeable future.

My sympathies to those of you that are losing your homes. I will try to help you when I can.

Buyers: Now is the time to act. Interest rates are at historic lows. Home prices on an inflation adjsuted basis are low, low, low. Opportunity knocks.

Sign Up Here For Weekly Kitsap Foreclosure Tours

]]> http://www.jimfreeman.com/kitsaprealestateblog/indicative-of-what/feed 0 http://www.jimfreeman.com/kitsaprealestateblog/what-would-a-kitsap-real-estate-market-bottom-look-like http://www.jimfreeman.com/kitsaprealestateblog/what-would-a-kitsap-real-estate-market-bottom-look-like#comments Sat, 06 Jun 2009 20:54:40 +0000 Jim Freeman http://kitsaprealestateblog.com/?p=80

Highest Rate of Appreciation On This Home In The Country?

No doubt about it, the real estate market outlook has been bleak for a couple of years now. Kitsap County has not experienced the trauma of say Detroit, MI but median prices are down year to year, days on market have been lengthening, Realtors have been feeling the pinch, foreclosures and short sales are up, etc.

But what will the market bottom look like? Many experts agree that the market top probably occurred in late 2006 or early 2007. Things still felt pretty hot with multiple offers on many properties and sellers were still pretty smug. It was several months after the peak before the majority of people really felt it. Could we be at a market bottom now or soon?

There are some signs that might be the case. US News and World Report has ranked Bremerton-Silverdale as the top MSA in the country that will enjoy the fastest price appreciation over the next ten years. Why? Their premise is that the Puget Sound Naval Shipyard, the Puget Sound’s third largest employer provides steady reliable income and when families’ incomes increase so do home prices.

It’s nice to get a shot in the arm from a national news source. It could mean that the next 3 months are the best opportunity to buy in all of Kitsap because of the perfect storm of low prices and low mortgage rates. The enormous growth in the federal deficit and money supply could portend some serious inflation if the economy begins to recover ever so slightly. Rates have bumped up off what appears to be the bottom in recent weeks to 5.25 to 5.5%. I suppose the high wages at PSNS have more than kept pace with inflation over the years but compared to the diversified, robust private sector economy of King County Kitsap usually loses out in income and population growth to our eastern neighbor. There is no reason to expect that Kitsap’s population growth will accelerate over the roughly 1% per year average of the last five years. Of course, starting from the relatively lower price base here perhaps USNWR could be right on the money as far as the rate of home price appreciation. It happened before in the last run up.

Conclusion: Buyers can buy at today’s prices with a high degree of confidence that they will not lose money if they stay in the home for at least 3-5 years. They have an opportunity to lock in low rates an  d low payments at what are historic lows. “Shadow inventories” (i.e. bank owned properties, listings that expired unsold, short sales and other distressed sales) will continue to hold prices down for at least 12-18 months. If sellers really want to sell or need to sell they will still need to price their offering skillfully. Buyers have a lot of alternatives.

How can you read the tea leaves about real estate market cycles? The National Strategic Investors Corporation is sponsoring a free educational webinar by Robert Campbell, author of “Timing The Real Estate Market”. He will teach us how to gather, compile and analyze the data to tell you what point you are at in the real estate market cycle for any particular MSA. Follow this link to register:

Market Timing Educational Webinar

kitsap waterfront property

Kitsap waterfront property owners need to be aware of impending changes in land use regulation for the waterfront with its inevitable conflicts, costs and dislocations. Christopher Dunagan of the Kitsap Sun has written an informative article about what is coming up. If you own waterfront… or want… you should read this article.

Comparing that to the Colliers Report of the same period the downtown Seattle totals were 37,779,190 sf with a direct vacancy of 8.31%. Both markets saw an increase in inventory because of new construction.

Kitsap added 137,416 sf, mostly in Bremerton, Bainbridge Island and Silverdale. While there was a positive absorption of space for the period, the vacancy rate increased from 12.55% in October of 2007.

Downtown Bremerton Renaissance

The conclusion? Absorption of space up to October of 2008 was acceptable but there is anecdotal evidence that everything halted severely after that. New construction plans have been put on hold indefinitely and a number of largely vacant buildings have been put up for sale. Landlords can expect to lose existing tenants more than gain and should look to manage their properties well until some sort of a turnaround.

It is a good time to be buying for cash flow and certainty of leasing income with the caveat of finding reasonably priced debt financing.

For more detailed information on specific sub-markets or properties email your request to jimfreeman@jimfreeman.com.

(1) Source: Bradley Scott

Port Orchard waterfront and marina

The much beloved Natural Health Food Store has moved to the Westbay Center in downtown Port Orchard. For the past 27 years owner Patricia Anderson has helped thousands of South Kitsap residents with education and products to improve their health through good eating habits. The new store location is 1341 Bay Street, Suite A and is open for business.

This applies to local retailers as well as national chain stores but the experienced local store owners know that the fact that they live in the community and have the opportunity to build social connections with their customers can give them a competitive advantage over the chains with their reliance on price. Ms. Anderson has a number of plans to add products and services to her store to deliver more value to her customers.

Nearly all retailers in Kitsap are suffering from a drop in sales. This is showing up as increased vacancies in the various Kitsap retail centers, although not yet at crisis levels for mall owners. As of the summer of 2007 retail vacancies were still below 7%. If consumer buying habits remain depressed we could see vacancies rise to double digits in retail for the first time in at least a decade.

With the addition of Natural Health Foods the Westbay Center in a counter trend to rising vacancies is able to offer a greater variety of goods and services through local vendors including Café LaGarmache’ Catering, Pedro’s Mexican Grocery and Restaurant, Help Line, a driving school, a tobacconist and the Hi Tide Tavern and Restaurant.