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Silverdale homes are selling, but at what price?
When Delores Meyer and her husband put money down for a unit at a Florida retirement community residence more than a year ago, she didn’t think she would still be trying to sell her house.
Meyer, who has lived in her Silverdale house for 15 years, said she has switched agents once already and has twice lowered her asking price to stay competitive in her neighborhood.
“It’s just a very slow market,” Meyer said, noting that selling the house isn’t the only goal. “We need to have this house sell at a fairly decent price in order to move.”
Meyer’s predicament has become all-too-common in Central Kitsap and Bremerton. More houses are selling in the county compared to this time last year, but those sales are coming at a greater loss for home owners. A year ago, Silverdale-area sellers saw the median closed sale price for a home in their area at $386,000, according to data from the National Multiple Listing Service.
Now, a year later, that price plummeted to $226,000, a $160,000 dip. Silverdale had the second heaviest drop. The median price in Bremerton was at $129,300 in January compared to $187,500 at that time last year, a drop of $58,200. County-wide, the median drop was $10,500.
In the past homeowners could guarantee second and third looks from prospective buyers with granite countertops and hardwood floors. But while some residents continue to spend money renovating and upgrading their homes, those who are selling, have sold and make their living selling other people’s houses say what sells a house in the current is price, and price alone.
After switching agents, taking a $50,000 price drop and spending a year on the market, Joan Ferguson and her husband Tim are still trying to sell their East Bremerton home.
“We’ll just drop it the lowest we can to get it sold,” said Joan Ferguson, who added that she too, has been working on small improvements around the property. “None of the rules apply anymore in this market. Everything is so uncertain right now.”
While the downward-sliding market is part of a larger cycle, the rising numbers in short sales -- selling a house for less than the mortgage balance -- and foreclosures compound the issue, causing a bigger problem for sellers.
Cathy Doney, an agent with the Silverdale Reid Real Estate office, said the current cycle has brought the county back to where it was in 2003. She said prices were at their highest around 2006, and in 2007, “We hit a wall.”
Rich Jacobson, an agent at the Silverdale Windermere office, predicts the area will see little or no significant increases in home value for up to five years. However, he said he predicts small possible increments of growth, in the area of 1 to 2 percent, sometime around 2012 to 2013.
“If we can weather the next wave of foreclosures, next year we will flatten out.”
Jacobson’s advice to sellers is to hold fast, think twice before putting their house up for sale.
“If there is any reason you don’t have to sell, don’t,” he said. “You’re at the bottom end of the cycle. Lay down and let the cycle rebound.”
He added that military families being transferred are among the usual victims of decreasing home values.
“A lot of miitary folks are being forced to leave and end up having to do a short sale. And, in some instances the bank steps in.”
It is not unusual for sellers to have to continue dropping the price even after home renovations, he said.
“This market is forcing them to be more aggressive with their pricing,” said Jacobson. He added that the small renovations, while likely not the primary selling point, are still helpful. “Sellers are doing everything in the world, pulling out all the stops to make the house show well.”
While not an option for everyone, Jacobson said renting a home could be a solution.
Ferguson said if she and her husband are not able to sell their house by April, they would consider renting it out.
“That’s the only other option we would have,” she said.
For first time home buyers, even with the $8,000 government tax credit, buying a home in the current market can be risky.
Although the deadline to take advantage of the credit was extended in November, Jacobson said the number of those willing to make their first purchase has gone down since the end of 2009.
“I don’t see as many people taking advantage of it now,” he said.
The unstable and unpredictable economy may keep some of those buyers from taking action anytime soon.
“There are not a lot of people taking a lot of risks,” he said. “The people that are buying are first time buyers that have a stable income and are taking advantage of the tax credit.”
Abraham Laners of Bremerton said the slumped economy could be to blame for not being able to sell his house.
“The biggest disaster was destroying the local business in the downtown area, it really hurt all of us,” he said.
Laners said his house, across from Olympic College, has been on the market for about a year and a half. In that time, he has dropped the price on his house by more than $40,000, leaving him wondering how much he will be able to take if and when the house sells. And, in order to save money, Laners said he opted to sell his house on his own, without an agent.
“By the time to you pay an agent 6 percent, you walk away with absolutely nothing,” Laners, 56, said. “You’re kind of forced to cut costs. You’re lucky if you walk away with anything.”
Jacobson said Bremerton’s revitalization, characterized by him as abandoned, could be one of the possible reasons for the stale market.
“I would love to think that at some point down the road, Bremerton would be a cool, hip, urban place to hang out. But, thats a long way away,” he said.
Despite the heartburn Silverdale homeowners are feeling, Central Kitsap takes a distant second to Kitsap’s northernmost community, Hansville, which saw a staggering $488,000 difference.
Jacobson said foreclosed properties are forcing home prices in some areas to drop significantly. He said they will be a factor at least throughout the rest of the year.
“We’ll have to deal with the short sales and foreclosures as they come,” he said.
To survive the cycle, Jacobson said both buyers and sellers need to plan ahead.
“People are caught unaware,” he said. “They don’t plan for it and don’t see it coming and you have this huge wave of people that are not financially prepared for it.”
Sue Klein-Burke found success selling her Bremerton house, and partly credited interior renovations.
In the end however, Klein-Burke and her husband Gerald still had to lower their asking price by $60,000 in order to sell in time for their move to Kansas City, Kan.
And that, she said, made the difference.
“We knew we wouldn’t have any problem selling it if we dropped our price.”