In response to increasing buyer demand for housing in Pierce County and a persistent shortage of inventory, developers have been building new homes in Gig Harbor at a rapid rate. The Gig Harbor City Council recently responded to this development boom by passing a building moratorium on new residential development applications, forcing developers to put upcoming projects on hold.
I’ve had questions from several clients about what this moratorium means and whether or not they should be concerned about what that does to their plans to buy and sell property in Gig Harbor. As a result, I’ve decided to share the information here that I’ve recently been discussing with them.
Why did GHCC use a moratorium and what does it entail?
In a recent Tacoma News Tribune article, Gig Harbor council member Michael Perrow said the council had instituted the moratorium because they felt the “rapid pace of development has created vast concern” among community members and that vesting of certain permit applications would be “detrimental to public health”. The ordinance imposes a six month moratorium upon the receipt and processing of subdivision applications and applications for building permits and other land use development approvals associated with residential development. Click here for the full article.
What does this mean?
The city council is concerned that current zoning regulations may no longer be appropriate and/or sufficient in light of recent growth. Applications for new developments are coming in so rapidly that the city wants to take some time (6 months) to figure out what changes might need to be made to ensure that the infrastructure can handle this explosion of new residential development, and to determine how to slow down growth if necessary.
You already bought land and have submitted your applications. Now what?
There are exceptions to the moratorium:
- Any valid permits that were filed before the moratorium passed and simply need to be processed.
- Permits for repair, remodeling, restoration or additions to existing single-family dwellings.
- Replacement of any existing single-family dwellings.
- Permits and applications for “accessory uses and structures associated with existing residential dwellings units.”
- Applications for final plats or short plats.
- Any site improvements or utility extensions that are necessary to obtain approval for final plats, final short plats or preliminary plat applications submitted before the moratorium was imposed.
If you were thinking about purchasing land for construction in Gig Harbor, should you forget about it?
In my opinion, it’s safe to continue looking for vacant land in Gig Harbor if you are considering single-family new construction. According to The City of Gig Harbor, permits for a single-family home on an existing recorded lot will still be processed. If you are thinking about developing a subdivision, that is a different story. I would recommend taking a pause, because zoning and density regulations may end up changing in the near future. If the moratorium continues beyond the six months, we could see the prices for existing homes in Gig Harbor inflate more rapidly than they would without the building stop, which could be good for current home-owners. For full details on the Gig Harbor moratorium in the City’s own words click here.
How long will this moratorium last?
Mayor Kit Kuhn said that the city will need to entertain official public comment on the moratorium at the March 26th regular city council meeting before any timing decisions are finalized. Though temporary in nature, this moratorium is expected to last for at least six months.
Miles Eaton is a top-producing Realtor with Windermere in Tacoma specializing in the purchase and sale of historic and luxury homes. Click here to e-mail Miles or feel free to give him a call at (253) 355-5862.
Diana Olick of CNBC recently wrote an article that sums up the reason for frustration for many home buyers and sellers in the South Sound region. Olick notes,
“Housing demand is rising rapidly, but a key cog in the wheel to homeownership is in deep trouble. The people most needed to close the deal are disappearing. Appraisers, the men and women who value homes and whom mortgage lenders depend upon, are shrinking in numbers.That is causing growing delays in closings, costing buyers and sellers money and in some cases even scuttling deals.
The share of on-time closings has dropped from 77 percent last April to 64 percent today for loans backed by Fannie Mae and Freddie Mac, according to Campbell/Inside Mortgage Finance. Appraisal-related issues in these delays jumped by 50 percent in that time.” (Read the full article here)
Our advice to our buyers and sellers is to factor in a minimum of 2-3 additional weeks time from what we would consider a normal 30 day closing. It’s important to note that it’s become an even bigger problem for specialty properties such as waterfront, luxury and historic homes and for properties located in outlying areas such as southern Pierce and Thurston counties. With lenders being forced to pay premiums for appraisals, we’re hopeful it will lead to more qualified appraisers being attracted to enter the field. However, that transformation will not happen quickly enough to satisfy those of us that counsel home buyers and sellers every day.
Tacoma was recently featured in a report by KIRO-7 news' Kevin McCarty. McCarty notes,
"Tacoma has always been a beer town… and these days business is booming". "Several independent craft beer makers are reviving the city’s historic brewery district. Craft breweries large and small are popping up in and around the city's historic brewery district along Pacific avenue in roughly the same area that once housed three large brewers a century ago. Heidelberg, Columbia and the original Pacific breweries once operated very close to an area now seeing an explosion of beer makers. From 19th street to south 55, large independent breweries are up and running or in the works with several small micro-brewers also dotting the area. Recently Gig Harbor based Seven Seas has announced they'll open a large scale operation after converting an old warehouse near S. 21st and Jefferson streets."
For those of us that love beer and Tacoma… this is certainly a "win-win."
Tacoma recently ranked as number 10 on Trulia’s top 10 housing markets to watch in 2016, a list that also included cities like Grand Rapids, MI, Charleston, SC and Austin, TX (see the full report here). Trulia’s rankings were based on a number of different criteria including strong job growth, low vacancy rates and high affordability. I think high affordability was probably key to Tacoma’s inclusion on the list. Though some of our buyer clients that are new to the Tacoma housing market have commented that prices here are high compared to where they’re coming from, the Tacoma housing market clearly remains a great value proposition when compared to Seattle where the median home price is more than twice as high. As the tech industry continues to grow in Seattle, Tacoma will continue to represent a very attractive alternative to call home. Not surprisingly, we’re seeing more and more folks from Seattle making the move to T-Town. I think it’s that demand in particular that led to our inclusion on Trulia’s list of hot market’s to watch in the coming year. To be clear though, Tacoma’s appeal isn’t just about being within commuting distance of Seattle. For those of us lucky enough to live and work in Tacoma, it actually represents a preferable alternative. A vibrant, livable small city with a big metropolitan hub nearby to visit when the mood strikes.
Sales data for third quarter 2015 are in, and unlike previous years where we've seen a weaking in third quarter in north end home values, this year we've seen the market remain strong. Inventory levels are a incredibly low levels. We expect a slow down due to seasonality in the fourth quarter but all indications are full steam ahead for home values in north Tacoma for the new year. For sales comparisons by zip code please see the information attached below.