Kitsap Real Estate Blog

Announcements by Fannie Mae and Freddie Mac Will Impact Availability of Home Loan Financing In Kitsap County

If you read the news or absorb it from other media you a re likely aware that something called the secondary mortgage market supplies the funds for our home loans. So what is the secondary mortgage market?

When you borrow money to purchase or re-finance a home loan the company you initially deal with is called the originator. They originate the loan you receive. Most often, that company sells that loan to an investor who then collects hundreds and thousands of loans into pools. Then that company or in many cases others financial firms create a new security instrument (bonds) secured by a possessory interest in the loans. This is called a mortgage backed security. The pool of loans is held by a trustee (usually a trust department of a large bank). The trustee manages a mortgage servicer who then collects the payments form the mortgage loans and transmits the interest and principal to the trustee for disbursement to the people who purchased the bonds (bondholders) secured by the pools.

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Our Saturday Foreclosure Tour returns to Bremerton-Silverdale this Saturday. It has been a couple of weeks since we covered that area and some very interesting things have happened since.

The five properties that we had on the tour were chosen because our poll of area real estate agents had indicated that they were special values based upon their listing price. And guess what? Every one of those properties has gone under contract.

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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.

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Bremerton – Silverdale Homes Are Affordable

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.

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Successful Home Buying Is Done With A System

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

Home buyers and investors have been sending a lot of questions lately about housing trends. Here is a partial list of some of their questions:

• 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:

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Foreclosures In Kitsap Setting Home Prices

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.

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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.

Sign Up Here For Weekly Kitsap Foreclosure Tours

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?

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Kitsap County is blessed with an abundance of waterfront property. This is a primary reason that many people move to Kitsap. The popularity for waterfront living contributes to a number of ill effects for marine life among other environmental elements.

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.