Positive Market Signs
In our area, the real estate market usually begins to improve in the spring. With the negative economic developments, and even more negative media reporting, the question has been whether it would happen this year. I am happy to report that there are hopeful signs. First, there are forces that should drive improvement. Interest rates are at or near historical lows. And through the stimulus package, the federal government is offering an $8,000 rebate for first time home buyers. Second, from a qualitative standpoint, inquiries are increasing and more people are attending open houses. Finally, statistical indicators for North Kitsap (NK) and Bainbridge (BI) are showing improvements. The rate of decline in average selling prices is moderating. A statistic that gives early indication of buying activity -- the ratio of pending sales to inventory (pending ratio) -- is increasing. The pending ratio compares the number of properties that recently went under contract (a seller accepted an offer) to the total number of properties currently for sale. It is expressed as a percentage -- an increase in the percentage indicates improving sales. In South East Jefferson County the average price decline has been accelerating, though it recently leveled. The price reductions are helping to increase sales. As a result the pending ratio is beginning to move upward. While returns to sellers are down, increased sales means that more buyers and sellers are able to move on to the next phase of their lives.
