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Average decline in 2011 property values was 6 percent
Port Orchard’s property owners saw an average 6 percent reduction in their property values in 2011, Kitsap County Assessor Jim Avery said.
Foreclosures were largely to blame.
“We can tell that roughly 25 percent of the sales that took place last year were bank-owned properties,” he said. “Those bank-owned properties typically sell for 10 to 15 percent less than other sales.”
The rates were similar throughout Kitsap County.
It’s not the only notable market trend.
Home values — at all quality levels — have gone down drastically, Avery said.
“We’re seeing the higher-priced homes going down slightly more than the lower-priced ones,” he said. “We do see (more) sales on the lower end of the marketplace — a lot of them have been foreclosed by the banks.”
And, although the assessor’s office doesn’t have great visibility into future foreclosure trends, Avery has heard that they will continue.
“From what I’m told, it’s going to keep going,” he said. “There’s still a lot of properties in the pipeline.”
This can pull down values on houses sold by homeowners, who are trying to compete with the prices of houses in foreclosure.
Banks are still a “more enthusiastic seller,” Avery said, “so they’re pricing them more aggressively.”
Meanwhile, many Kitsap County residents are drowning in debt, Avery said.
“People are under water,” he said. “They owe money. They can’t even refinance, and they’re stuck with higher-rate loans of 7 to 8 percent, and they don’t have the equity in their house.
“They’ve lost 30 to 40 percent of the value of their house. They can’t even refinance.”
Federal banking legislation has been proposed recently to stop the damage.
“If it can reduce the number of foreclosures, that’s a good thing,” Avery said. “A bank-owned property that sits empty and vacant drags down the (neighborhood’s) value for everybody else.”