Sarah Wilkinson and Josh Sutton purchased a home in Port Orchard in October 2020, months into a pandemic and in an ultra-competitive housing market in Kitsap County.
The couple began exploring purchasing their first home in February of 2020, right before the COVID-19 pandemic hit. They attended a workshop through Fairway Independent Mortgage Corporation for first-time homebuyers around then and got pre-approved in August and began looking.
Almost immediately, they found the home they purchased.
The housing market was hot all year long, driving median home prices up as the year went on, hitting a high in November at $439,000.
Julie Cooper, sales manager at Fairway Independent Mortgage Corporation, wondered what COVID-19 would do to the market — would it slow? As the year went on it became evident business was accelerating and those considering buying a home were prompted to act, she said.
“I think people serious about buying got with lenders, got pre-approved, then went shopping,” Cooper said.
If you can afford rent, you can afford to buy
Sarah Eichhorn, Sutton and Wilkinson’s real estate broker at Skyline Properties, said some looking to buy homes did so because of skyrocketing rent prices. People began to realize if they can afford rent they can likely afford a mortgage, and if they’re going to be in a location more than two years, it would be foolish not to buy.
The viewing experience was one strange part about buying a home during a pandemic, Wilkinson said. Only she and her husband could go in with COVID-19 guidelines in place. She said she’s thankful the first home they went into was the one they wanted.
“We live in a world where some sellers won’t let an appraiser come into the house because of COVID,” Cooper said. “The market has evolved to work through COVID.”
The rest of the process was difficult because Wilkinson enjoys meeting with people when figuring out what steps to take or working out the details.
“Instead it was phone calls and email chains,” she said. “Our loan closure time was longer than it was supposed to be and part of that is maybe COVID-related. The places we needed to call to get documents were also running on COVID time.”
What was supposed to be a 30-day close ended up being over 60 days. Trying to coordinate so many things and getting the correct paperwork was stressful, Sutton said.
Overcoming barriers to homeownership
Despite the challenges, Wilkinson said the timing couldn’t have been better for them.
Sutton works full-time in Seattle and attends school full-time, while Wilkinson works in Olympia or at home. They were also juggling kids starting school and navigating online learning.
“We still got the home-buying experience, but we got it at this bizarre time when there were so many other things going on in the world,” Wilkinson said. “We didn’t think we would be able to buy a home so quickly.”
In addition to the challenges placed by the pandemic, the couple has faced their own barriers that made them believe they wouldn’t ever own a home. They’re in recovery from drug addiction, and with their finances, they figured they’d be five or more years out from buying a home — not six months. Sutton is formerly incarcerated, has been through Kitsap County Drug Court and will soon be six years clean. He thought he was wasting his day going to a class for first-time homebuyers, but Wilkinson pushed.
“I had screwed myself in every trajectory I had in life and I thought a home was in that trajectory,” he said.
Yet in just eight months of looking they were able to purchase a home, which felt surreal, Wilkinson said. Their offer was made and accepted the same day. The home was listed on Aug. 11 and off the market Aug. 14.
Extreme seller’s market
The market’s been moving at a very fast pace, said Frank Wilson, Kitsap regional manager for John L. Scott Real Estate. Listings come and go fast.
Wilson describes Kitsap County as an extreme seller’s market. In December, only 195 homes were on the market in all of Kitsap, which is down from the previous year at 325, he said. Low inventory is a byproduct of high buyer demand, he said.
Eichhorn said in this market, she’s had to compete with 15 other offers on a property. She tells her clients it’s pointless to go view a home at their pre-approval maximum because they’ll likely need more than that to compete with other offers. She’s had to coach people about strategic house-hunting, she said.
Sutton and Wilkinson’s 100-year-old home has had updates, though some of the original windows remain. Sutton describes it as an old-school style farmhouse that sits in the middle of town. The house has five bedrooms, a garage, and is on half-an-acre. For the first time, the kids can have separate rooms — except for their two sons, who want to share anyway.
Previously, the family lived in a rental in Bremerton near Callow Avenue. People would often come through their yard, which they described as a tiny patch of grass. Now their new home has enough room for their new Great Dane to run around.
“We can tell our kids to go out and play without worrying,” Wilkinson said.
Sutton grew up in Bremerton, and Wilkinson grew up in Port Orchard. Family is nearby, and they wanted something with a yard for their kids. Kitsap County worked out as an area with a reasonable commute between his work in Seattle and her work in Olympia.
Telecommuting options spur relocations
The job situation throughout the pandemic has played a role in people’s decisions about where they want to live, said Jim Vleming, regional labor economist for the Washington State Employment Security Department. A lot of people have realized they can work from anywhere, so they’re looking to get out of more expensive places for somewhere more reasonable. People are spending more time at home and may want more room to spread out or a yard to spend more time outside. People may no longer have daily commutes and want an improved quality of life. Kitsap and Mason counties are good for that kind of relocation, he said.
However, as more people move across Puget Sound, demand will drive prices higher, Vleming said.
“The location is attractive because you’re not right on the I-5 corridor,” Vleming said. “I think a lot of people want to get off of that. Kitsap has a feeling of being more rural than nothing but concrete, and I think that’s a big plus in that regard.”
Cooper said people in Seattle are thinking about a 60-minute boat ride to commute to work in exchange for living in a place more affordable than the city.
“We’ve seen a great migration,” Cooper said. “A COVID migration from urban areas like downtown Seattle into Tacoma or Bremerton for mid-range. Higher-end clients are going to other places on the peninsula — Tahuya, Hood Canal. They’re building new construction for $650,000 with a canal view or a waterfront property.”
Sutton and Wilkinson were able to find a five-bedroom home with a yard for under $380,000 — a feat nearly impossible in Kitsap County.
The median price in December 2020 was $425,000 in Kitsap, while the year before was $385,000, Wilson said.
This tight, competitive market is pushing buyers to do things they’ve never done, he said, such as pay more than the house is actually worth or feel pressured to waive an inspection.
When one house on the market sells for over its worth, that pushes up the price of the next house, too.
Hot market not cooling down
Wilson of John L. Scott predicts Kitsap County will see more of the same in 2021.
“Even if we get more houses, twice as many, we’re still in a seller’s market,” Wilson said. “I think interest rates will have to go up.”
Wilkinson and Sutton were blown away by their 2.99% interest rate, one common positive factor for homebuyers during 2020.
“Especially for someone with not fantastic credit, we were expecting a high-interest rate while we were buying a home, but it was low and stayed pretty consistent,” Wilkinson said.
The home, as old as it is, came with a few issues — but was still well worth it, Wilkinson said. Any upgrades they make will just help them in the future, she said. They refer to it as their “10-year house.” Later on, they’d love to sell or pass it on to a family member or maybe even turn it into a clean and sober or re-entry home for those formerly incarcerated.
Cooper said municipalities allowing more ADU (accessory dwelling unit) construction is one way of building affordability into a community’s infrastructure. Eichhorn said some are coming up with creative ways to combine their efforts and income to get permanent housing. New developments, some with homes affordable for first-time home-buyers, will definitely help the market for those searching for homes, Wilson said.
However, “affordable housing” isn’t always affordable for everyone. People working jobs in hospitality or retail may find that “affordable” doesn’t describe the homes that are available when they are competing with buyers who work at the shipyard, in the Navy, in the medical community or who have well-paying jobs in Seattle.
“It used to be if you couldn’t afford something in Seattle, buy a house in Kitsap,” Wilson said. Now prices are driving people to places like Belfair, Shelton or Port Ludlow.
People consider $375,000 and under the price range for first-time buyers in Kitsap, but realistically most people want to stay around $300,000 or lower because of the monthly payment, Eichhorn said. She wants to see more entry-level homes with a bit of a yard for under $300,000 and an effort to get those renting into homeownership.
Eichhorn said she is seeing locals getting pushed out of the market by those in Seattle who want to live what she calls a “peninsula lifestyle.”
“People get pre-approved, they worked really hard to rebuild their credit, but they’re no longer really eligible because they’re priced out,” she said.
For those working in real estate, it’s been a great year. Cooper has been in real estate for 37 years, but 2020 was her best year income and business-wise.
“Most people in real estate I know, it’s their best year ever,” Eichhorn said, though she admits her fellow brokers feel guilty while others have had such a rough year. “But we don’t want to talk about it.”