Area foreclosure rates on the rise
November 7, 2008 · Updated 9:18 AM
Latest numbers reveal problems for Bremerton/Silverdale.
Apparently the Bremerton/Silverdale area isn’t immune to the housing market crunch being felt across the nation, but fortunately, the numbers aren’t as eye-popping as places like California and Michigan.
Nonetheless, a total of 40 homes in the 98310 ZIP code are on the auction block and 23 are now bank-owned, according to data provided by First American CoreLogic.
In the 98311 ZIP code, 33 properties are set to be auctioned, while 19 are bank-owned, with the West Bremerton area’s 98312 ZIP code region having 84 properties up for auction and 47 bank-owned. Bremerton’s 98314 ZIP code area is unaffected, most likely because of the dominance of the Puget Sound Naval Shipyard. Bremerton’s 98337 ZIP code area, which encompasses the city’s downtown core has only 20 properties up for auction and 16 owned by banks.
Silverdale’s 98383 ZIP code area has 18 properties set for auction and 15 under the ownership of banks.
According to the numbers provided by American CoreLogic, 330 properties in Kitsap County are set to be auctioned and 170 are under bank ownership.
According to the latest numbers, 41.5 percent of all of the foreclosures in the county are in Bremerton and 47 percent are in the Bremerton/Silverdale area.
By comparison, King County has a total of 371 properties set to be auctioned and 127 owned by banks, according to the numbers provided by American CoreLogic.
However, other foreclosure Web sites list higher numbers of foreclosures for both Kitsap and King counties.
The current climate has made things difficult not only for real estate agents, but homebuilders as well, said Kitsap Home Builders Association Executive Director Art Castle.
“Builders are facing tough credit for spec loans,” Castle said. “Some lenders are not renewing or extending existing construction loans, even when payments have been current. This will likely force several builders out of business and add a few more foreclosed homes on the market.”
The amount of work available is down and many builders are looking for projects to keep them going, which also impacts suppliers and subcontractors, Castle said.
“Since this time last year, inventory of homes for sale (new and used) is about the same as a year ago, with less monthly sales, thus a higher absorption rate,” he said. “The absorption rate climbed to 12.6 months during the summer but over the past three months has dropped to 10.4 months in October, a significant improvement.”
Much of the state is similar, although the central Puget Sound area is a little less well off than other areas of the state, he said.
When it comes to the outlook, it all depends on whom you talk to, he said, adding that he personally believes that a six- to seven-month absorption rate equates a balanced market.
“There are very few new homes coming on the market, so we should continue to see gradual improvement until we get back to a balanced market,” he said. “Statistically, our market isn’t that bad.”
If for instance an additional 20 to 30 homes closed sales per month for four to five months, the market would be balanced, but that hasn’t happened yet, he explained.
“It’s my opinion that by late spring or summer next year our local market should be balanced, but there are a couple of wild cards in that prediction,” he said, adding that his prediction depends on what happens with the national economy, consumers’ reaction to the presidential results and how many foreclosed homes return to the market among other factors.
“I would anticipate a very gradual improvement of new homes next summer, with a stronger market in 2010,” he said.
Kitsap County has a natural demand for about 1,600 new dwelling units a year, and when the 2008 housing numbers are released, Castle said he expects to see the number of new single family residential permits at their lowest levels in at least 20 to 30 years, which will create some pent-up demand.
“When Navy families begin to feel that our market has stabilized, and I think it may have already, they will again start buying instead of renting,” he said. “We could see some practices that supported the quantity of large expensive homes has changed, but what that means in the market is unclear; perhaps more town homes, apartments, smaller homes, etc. — but zoning and economics may inhibit these.”