Signs evident of eventual end to local foreclosure crisis

By Rachel Pritchett, rpritchett@kitsapsun.com and 360-475-3783

Top real-estate watchers in Kitsap County weren’t at all surprised when the median closing sale price of a home in Kitsap County plummeted 26 percent in January.

They knew it was coming in this slow month. It was the cheapest homes that were continuing to sell at a respectable rate — even now — much more than the mid- and high-end homes. And many of those low-end homes were distressed properties — foreclosures and short sales. Distressed properties were making up 30 percent of all home sales.

Fast-forward this trend into the future, and you can predict there will be progress in eating away at the inventory of distressed properties in Kitsap County. In January that inventory stood at 610 properties, says ForeclosureRadar.com. And that glut has to go before any real progress toward a normal market can take place. It’s that group of homes that are pulling sales prices down.

Couple that with the latest numbers from ForeclosureRadar.com that clearly show that the number of properties slipping into foreclosure is far, far less than it was a year ago. Sometime, at some point, with far fewer entering into foreclosure, and now more moving out, the problem will clear itself up. We are seeing the beginning of the end.

But it is going to take a lot of time to move 610 troubled properties.

Here’s some facts I found for a couple of our cities in the just-released ForeclosureRadar data for January.

For all of Kitsap County, there were 40 new foreclosure filings in January, down a whopping 66 percent from January 2010. There are deep bargain possibilities out there. Winning bids on foreclosure properties averaged $197,000, down 8 percent from a year ago.

A third of the distressed properties — 209 of them — are spread pretty evenly throughout Bremerton. Port Orchard was the second most common place for foreclosures in January, with 157 of them in January, again pretty evenly spread through the city. All the other cities had far fewer troubled properties.

The average winning bid in January in Bremerton was $175,000, while in Port Orchard, it was $215,000, again both down substantially from a year ago.

So it is a painful process, one that has to be worked through, but one that clearly is happening.

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