Known for having some of the biggest houses and miles of shoreline, the Gig Harbor area holds another, less desirable distinction: Pierce County’s largest supply of for-sale homes.
Gig Harbor’s inventory of such houses and condominiums stood at 9.7 months in July, according to statistics compiled by Northwest Multiple Listing Service director Dick Beeson. The number measures how long it would take to sell every home that’s listed, putting Gig Harbor deep into a buyer’s market.
And hundreds more homes are planned.
Developers and real estate agents point to several factors that contribute to today’s depth of supply beyond a general market malaise, including prior buyer hesitation over construction of the second Narrows bridge and a tucked-away location that makes it difficult to commute beyond Tacoma.
Also, the area’s pricey homes take far longer to sell than their more economical counterparts. Homes listed for more than $1 million in the first half of 2007 were projected to sell in 25.6 months, compared with an average 6.8 months for those listed at $500,000 or less, according to Beeson. The area examined includes Fox Island and the Key Peninsula.
Although the abundance of choices favors buyers, agents say Gig Harbor’s hefty inventory means buyers can’t expect to make a quick profit. Sellers, on the other hand, need to be on their A-game and price right, they say.
Meanwhile, sales have started at Harbor Crossing, a collection of more than 100 urban-styled houses. And plans are taking shape for Harbor Hill in north Gig Harbor, where 800 to 1,200 homes are expected.
NOT MUCH INTEREST IN CONDO PROJECT
Developer Dave Devin is more than half finished converting 62 apartments to condos at Harbor Glen within earshot of Highway 16, where he’s installing granite counters, hardwood floors, new showers and new kitchen appliances.
Devin said he studied in-demand condo projects in Seattle and Bellevue when designing the retrofit.
“I thought once I got this thing done, the public would be coming to my door. I still haven’t generated much traffic,” he said.
After listing the first ones in April, he’s sold two, with offers on two more.
Prices on the three-bedroom units have been cut from $289,950 to $259,950. Two bedrooms were reduced from $259,950 to $229,950.
Real estate agent Minh Chau Trinh, who’s selling the condos and is also a partner in the project, attributes slow sales at Harbor Glen and supply issues elsewhere in Gig Harbor to the area’s lack of home-grown jobs. The opening of the 80-bed St. Anthony Hospital in 2009 should help, she said.
“I would say probably in another year, things will really start selling,” she said.
Ed Aro, a John L. Scott agent and consultant to home builders, said newly built homes still sell in Gig Harbor. But they have to be meticulously designed and on the right piece of property, he said.
“You can’t throw up a house and have it sell, which is what was happening the past four years,” he said.
Bennett Homes is building almost half of the houses at Harbor Crossing, within walking distance from the planned hospital and a new YMCA and Costco in North Gig Harbor.
The subdivision’s location and the kind of homes being put up, with tiny yards, shared driveways and master bedrooms on the first floors, will overcome any supply issues, said Linda Kepler, a real estate agent for Bennett.
“I just think there’s a real need for this type of housing, because it’s so different,” she said.
‘NOT A SHORT-TERM BUY’
If buyers are looking for equity, they should be purchasing for at least five rather than three years, said Beeson, also a broker at Windermere.
“This is definitely not a short-term buy,” he said. “But the market out there is similar to what it was in the early 2000s.”
In July, a Gig Harbor home sat on the market an average of 95 days, he said. In 2003, the average was 98 days.
Real estate agents in Gig Harbor, like elsewhere, say buyers know they have time to make decisions so they’re taking it.
“There are buyers. They keep coming back. There’s no urgency,” said Premier Northwest Properties agent Paul Redal, who’s selling new houses in the Artondale area for $795,000 to $1.3 million. “Buyers are waiting to see how far prices will go down.”
Preliminary numbers show July’s median price in Gig Harbor declined by 2.7 percent from the previous year – from $392,500 to $382,450.
On 1 to 3 acres, the houses include outdoor fireplaces, master suites and two garages. Two of the eight have sold.
“If I had had these homes done last year, every one of them would be sold, no question,” Redal said.
Transactions also get drawn out by offers made contingent on the sale of another house – a slow sale on one means a slow sale on the other, Redal said. Such a situation led the builder of the Artondale houses to offer to purchase a buyer’s home for about $500,000 on Fox Island to sell one in the subdivision for $1.1 million.
Much like the way investors time the stock market, home owners are trying to time the real estate market, said RE/MAX agent Mary Souza. And, in Gig Harbor, they tend to be well-educated owners with a high net worth who, therefore, watch real estate more closely than most.
“The feeling is, ‘the market has tapped out, the market has peaked. We should put our house on the market now before we see a loss of value,’” she said.
Souza expects median home prices in Gig Harbor to depreciate some through the end of the year, level off in 2008 and begin to increase again by the end of next year.
‘THEY SEE THE GOLDEN GOOSE’
Some sellers haven’t yet locked into the reality of today’s market, said Windermere agent Andrew Welch.
“There was such a demand, and they see the golden goose, and they think their house is worth way more than the market will bear,” he said.
Allison Skibbs Welch, also a Windermere agent and married to Andrew, said with so much competition, houses need to be in pristine condition and priced right.
Rather than list a home today by adding 10 percent to a nearby comparable sale, Skibbs Welch said now she tends to deduct 10 percent.
Kyle Lawson, who wants to sell his 3,248-square-foot house and buy something smaller, said he’s a bit discouraged. His house, which sits on nearly 8 acres near Kopachuck Park, was listed seven months ago for more than $850,000.
He and his wife, Danielle, bought the house four years ago for $360,000 and did a $150,000 remodel, including new windows, doors, moulding and carpet.
They got a new agent in July and dropped the price to $749,700, where Lawson said he thought it should be in the first place.
Lawson, who owns a hair-cutting franchise in Federal Way, is optimistic the house will sell before summer ends.
“It’s a matter of whether we drop the price so it’s a fantastic deal, or do we hold out knowing the market will pick up?” said Lawson. “On the other hand, I’m not worried about buying in Gig Harbor. It’s a buyer’s market.”
Supply up, prices down
A look at the Gig Harbor-area housing market, including the Key Peninsula and Fox Island
July 2002
Median price: $222,250
Average days on market: 80
July 2003
Median price: $264,450
Average days on market: 98
July 2004
Median price: $273,000
Average days on market: 65
July 2005
Median price: $340,750
Average days on market: 73
July 2006
Median price: $392,500
Average days on market: 77
July 2007 (as of 7/24)
Median price: $382,450
Average days on market: 95 RE/MAX agent
JOIN THE DISCUSSION | Register here
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules. A thorough explanation of rules of conduct can be found in our Terms of Service. If you have any questions, including why your comment may not be showing immediately after you submit it, be sure to visit the commenting FAQ.