Kitsap Real Estate Blog

The most recent Housing Price Index (HPI)

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.

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