Home prices in Kitsap County skyrocketed to a five-year high last month as the available supply of homes on the market continued to dwindle, according to Northwest Multiple Listing Service statistics for the month of March.
"It’s a perpetuating problem," said Christin Webb, a broker with the John L. Scott office in Silverdale. "Higher home prices are making a lack of inventory, and that lack of inventory is spiking home prices. We’re seeing this sort of really ugly cycle that's not's going to end quickly."
The median price for single-family homes and condominiums in Kitsap reached $339,225 in March, up by almost 20 percent year over year from $285,000 in March 2017. It was the highest median price for a home in recent years, topping the most recent peak of $335,000 during the middle of last summer's active market.
Meanwhile, the market's supply of active listings dropped 35 percent year over year, down from 547 listings in March 2017 to 354 last month. It was the largest drop in available inventory across the entire state for the month of March.
"All of it is just causing a squeeze," Webb said. "It's a pressure cooker."
Webb predicted costs would continue to rise in the coming spring and summer months, although there would likely be more choices on the market. But, that doesn't necessarily mean market conditions will improve.
"We do see a spike in listings in the summer because people are moving when school’s out or it's summer break, but the rise in listings during the summer means there's a rise of buyers as well," she said. "Yes listings are going up, but more people are moving into the market as well."
Potential buyers are now having to make offers on three, four or sometimes even five offers before they successfully close on a home due to the current market conditions, which is contributing to "buyer fatigue."
"New buyers come in, they're very excited, and we dive into what their money can buy them," Webb said. "After the third or fourth house lost, unless if they have a compelling reason to move, like a baby on the way or their rental is being sold, they just fizzle out."
With less than a month of available supply on the market, which is calculated based on how long it would take to sell all of the currently listed homes, sellers are coming out on top. Real-estate brokers typically consider a balanced market that favors neither the buyer nor the seller to have four to six months of supply.
"Unless if they're moving out of the area, their stress is a little bit less," she said. "They know their house is going to sell, but they might get stuck in a limbo period of 'I know my house is going to sell in a few days — so what do I do?' They might not have somewhere to go yet."
Across the county, the number of closed sales decreased in March amid the rising prices, down from 401 closed sales in March 2017 to 372 closed sales last month.
Things could be picking up soon though, as the number of homes newly listed on the market mirrored the same rate as those listed last year, with 422 new listings last month to the 453 listings in March 2017.
Most newly listed homes on the market are being snapped up in less than a week.
"Buyers have to learn they have to be aggressive, really jump on it," she said.
Even if a home has been on the market for more than a week, Webb said that shouldn't dissuade buyers from checking out the property.
"I would never discount one of those houses just because it's been on the market longer," she said. "It could be a great house."
Certain homes, like those that are currently occupied by tenants or are for sale by owner, often take more time to sell. Webb has also seen homes that were initially listed at too high of a price stagnate for a time on the market.
The rising median home price in Kitsap County was reflected in many of the county's sub-markets.
In West Bremerton, median home prices increased by 25 percent, rising from $201,500 to $252,000 last month. One of the highest increases came in Seabeck, where median home prices rose by 47 percent, up by more than $100,000 from last year to a value of more than $309,000. On Bainbridge Island, which is typically the highest-priced market in the county, home prices increased by 33 percent year over year from $635,000 to $850,000.
"More and more people are wanting space, to be away from neighbors, or to have a yard, and that's difficult to find in Bremerton," Webb said. "That’s why places like Seabeck are becoming so popular."
A few sub-markets did not experience the trend.
In East Bremerton, median home prices fell by almost 99 percent, down from $258,000 in March 2017 to $235,550 last month. Home prices in Silverdale minimally fluctuated year over year, hovering around $356,550 last month.
For buyers looking to find a new home in the active market, Webb said they should start getting their finances in order well before they start looking at houses so they can be ready to jump on a good find.
"I really encourage buyers to get face to face with a lender and start pre-approval process immediately," she said. "You can't start home shopping without a pre-approval letter."
Webb advised sellers to put their best foot forward when getting ready to sell their house and not solely rely upon the hot marketplace to garner them offers.
"Have a realistic idea of things that need to be done to your house and make those repairs before listing," she said. "That way you can get the most momentum when you get your house on the market."