Kitsap Real Estate Blog

It’s no secret. Foreclosures and short sales in Kitsap set the price for everyone else. Why?

According to the June, 2010 Kitsap Market Statistical Summary there were 1,297 closed sales of existing homes for the year ending 6/30/2010. In a separate study I discovered that a total of 708 of those closings were classified as bank owned properties or required third party approval (aka short sales). Let’s do the arithmetic. That is 708 divided by 1,297 or 55% of all sales were closed by these highly motivated sellers.

So what about sales that were not in the distressed category? Well, anybody selling in this market must meet the price competition. If non-distressed home sellers want to sell in this market they must meet the price competition by the banks. Why would any rational buyer pay more if there were a good supply of real alternatives at a lower price?

Of course this is good news for buyers. But there is even more reason for buyers to be interested now. As a broker I am constantly working with buyers in this market. At any given time I have 5-6 individuals or couples actively looking for the right home at the right price. As of the date of this post the mortgage lenders that I work with have been offering 30 year fixed rate loans with an annual interest rate of 4.5% and an A.P.R of 4.789%. What does this mean for a buyer?

I have connected to a video of a new recent new listing of mine in the Olalla area. This home has more than an acre of level, forested land for privacy, is tidy and comfortable as an enchanted cottage and is less than 15 minutes to the Southworth Ferry. The seller is not distressed but has moved out of the area.  This smart seller does realize that she needs to price it right and has done so.

If a buyer can qualify for the loan terms quoted above their payment on this home would be approximately $1,488.68 per month including principle, interest, taxes and insurance and would be fully paid in thirty years. Paying bi-monthly (twice per month) would accelerate the time to payoff. What’s more, in the current market that home would probably rent for about the same amount.

For someone in the 30% tax bracket the home interest deduction could be worth $360 per month. This means that a buyer is effectively paying only $1,128.68 per month.

Oh, and by the way, if you can qualify for VA or USDA Rural Development financing you could buy a home like this with zero down and ask the seller to pay for your buyers closing costs. If you could qualify for a FHA loan the down payment would be only 3.5%.

How much longer do you think that these historically low interest rates will stay low?

If you want a list of foreclosures in Kitsap or other homes that you can buy with zero down just click on the link. Or, if you have a friend or relative that is renting now and might like to “lower their payment” and live in a darn fine home, do them a favor and let them know what is going on. Just send them a message with a link to this article.

If you had an interest in looking at this home contact me at Kitsap Real Estate Advisor