Windermere Real Estate/BI, Inc.
With the arrival of the new year, we also welcome a fresh new start to our local Bainbridge Island real estate market. I had my busiest year on record and I am very thankful for the opportunity to work with such great, smart, interesting folks this year. The majority of my clients are island newcomers and I am so happy to welcome them to our island community. As an office, as we look back and tally the 2012 year-end statistics, we have reason to think that 2013 might look a bit brighter than its predecessor.
The number of Bainbridge Island’s residential home sales peaked in 2004 with 468 sales. Our market’s “correction” began in the 2nd quarter of 2007, yet we still managed to sell 332 homes that year. The trough came in 2008 with 188 sales, followed by steady (but not terribly exciting) improvements each year since. In 2012, we sold 386 homes, a spectacular increase of over 50% from 2011. This is great news on all fronts. Will this trend continue into 2013?
For the past five years, homes priced over $500,000 have really struggled. Our “middle market,” between $500,000 and $1 million, is the truest barometer of the island’s real estate health. This important segment went from a strong 212 sales in 2005 to only 93 sales in 2008 – a drop of 56% in three short years. In that same segment, our sales last year were a much healthier 156 homes. Our fabled waterfront homes and condominiums were not immune to the downturn, plummeting from 61 sales in 2005 to a mere 21 in 2008. They came roaring back to 64 sales in 2012.
Last year we also saw prices level off and move up after five years of steady erosion. The overall single family median market prices are still off 23% from their 2007 peak, and the average/median prices mirror to those from April 2005 (when the average price was $635,153 and the median was $540,000). But after five years of a declining market, this is a welcome change.
When we compare ourselves to our neighbor markets to the east and west, we found Bainbridge fared well. Seattle had a 15% rise in transactions with average prices up about 5% and median up almost 7%. In North Kitsap, the transaction count reflected a healthy 27% increase from 2011, but their average prices were down slightly (-2.1%) and median prices remained flat.
Our condominium market experienced mixed results. The number of sales went up 19%, but the average prices were essentially flat and the median price actually declined. If you look at the past two years, only 6.8% of the sales were priced over $500,000. Looking specifically at properties priced above $600,000, the number drops to four sales in two years (2.7% of overall sales). There are currently two condominiums under contract over $500,000. So affordable condominiums have experienced brisk sales but it continues to be a tough market for condominiums over $500,000.
Land sales included an encouraging 32 closings, up 60% from 2011 and up a whopping 300% from 2009’s measly 11 sales. As with condominiums, the bulk of the sales (28 of the 32) were for properties below $400,000. Indeed, the average sale was $216,672 and median $147,500. With the healthier land sales, we are also seeing more new construction, both pre-sales and even a few spec homes. Spec homes are still challenging with lending hurdles and cost-to-build/market value ratios.
So what trends can we expect for 2013? Right now, our largest challenge is inventory. With a healthy job market in Seattle and overall positive economic news, we are seeing a number of buyers. However, the lack of choices can be frustrating for these eager buyers. On January 15th, there were fewer than 100 homes actively for sale (those listed but not under contract). When the numbers drop this low, the stress is exacerbated by a larger percentage of homes that have been on the market for a while and for one reason or another have been passed over by the current crop of buyers.
In truth, there are many homeowners sitting on the sidelines but reluctant to put their homes on the market for a number of reasons. First, they have looked at the existing inventory and do not see anything they wish to buy should they sell their home. Another hurdle is prices. Sellers are aware they probably will not see 2007 prices anytime soon, but would like to see them inch a little closer! Another reason is the market decline, which has placed many sellers in “upside down” mortgage situations. So if those folks don’t have to sell right away, they’re holding onto their homes until prices rise again and they can protect themselves from losses.
The next six months will prove to be very interesting. More fiscal cliffs, European travails and other external influences can have an effect on micro-markets like ours. The push/ pull stress of a strong buyer pool wanting more inventory to choose from will continue to shape the market. In tricky times like these, buyers and sellers are wise to work with experienced agents who can offer clarity amid the confusion. All in all, there are more positive things happening in the Bainbridge Island real estate market than we have seen for quite a long time. We at Windermere are excited and optimistic about 2013.
2012 is now one for the books. I will publish a post this month that will evaluate the detailed stats, but I can tell you, Windermere Bainbridge had the company’s second best year ever, coming in just shy of 2007 numbers. In 2012 we saw action. Action in all price points as my list below reflects. 2011 was active in the $400-600k range, but in 2012 we saw the luxury home market (over a million) really thrive again too. And all other price points in between. The $600-900k range was quite sleepy from 2008-2011. But, in 2012, we saw a resurgence of buyers who want a really nice, quality home, with or without a view. And as we move into 2013, with our historically low interest rates still hanging around, I think all segments of the market will continue to thrive, as long as we have enough inventory to support our now very eager buyers.
For #10 we start off in town. This is a classic home in the popular Hillandale neighborhood built by Dick Allen, one of my favorite builders. He developed the neighborhood in the the early 2000’s and this is one of the largest homes in the hood. The home and neighborhood are a popular package for busy families. The home has a bright and open floor plan, guest space in the lower level, tons of custom built-ins, convenient storage spaces and sits on one of the largest lots in Hillandale. The location of the home makes walking to town, the ferry, or school an easy stroll. A very nice package my clients were happy to snap up this summer.
For #9 we move a bit out of town, north to the Murden Cove/Manitou Beach Area. Built by Rick Debarros, another builder popular amongst buyers (and me), this home has charm and fine craftsmanship woven into a very functional, friendly floorplan. As a builder, Debarros knows what buyers have on their wants/needs list. He gives them the sweet covered front porch (want) and the handy bonus room over the garage (need) and they line up to buy. Moving out of town allows you to get a little more breathing room as far as lot size goes – this home sits on a shy half acre and is walking distance to Bay Hay and Feed, the beach . . . and coffee :)
For #8 we stay in the Manitou Beach Area for this warm and cozy home designed by Patina Design Architects. We also stay at the busy $600k price point. The open floor plan, exposed wood beams and unique style of this home made it pretty popular with the pool of buyers this summer. This home saw multiple offers that inflated the price a bit from $588k to $595k. The easy proximity to Highway 305 and the beach – plus a sunny half acre+ lot with a newly built-out bonus room over the garage made it the ideal package for many summer shoppers who were looking for something other than cookie-cutter.
For #7 we move south to the Eagle Harbor Neighborhood for this fine home built by The Reijnen Company on Pine Street. I love the clean lines and functional floor plan of this home. I like a modern flare and this home certainly delivers with commercial style aluminum windows wrapped in wood and modern fixtures alongside smart launchpad storage spaces in the kitchen – plus keen bonus spaces like twin lofts in the (kid) bedrooms connect by a portal. The master bedroom is perched perfectly to capture the territorial view of the lovely one acre property set alongside a ravine. Majestic privacy and a warm modern style were enough for this home to last only one day on the market.
For #6 we stay on the south end of the island, but move west to the home on Mattson Place high atop a hill overlooking Rich Passage. At the same time we jump into the over million dollar market. This lovely home looks like it was plucked from the pages of Coastal Living Magazine, but with a Country Living flare. This is where I can imagine myself living in ten years. The main house is a modest 2,000 square feet with two additional guest spaces/cottages. The home has stunning views of the passage and superior light. The gardens thrive from their paramount southwest exposure. And with a greenhouse on an acre, this is where a green-thumb California girl needs to be.
For #5 we move north to Sunrise Drive. This home represents the ideal “Bainbridge Package” for so many people. The oh-so charming shingle style-home on a flat sunny acre and a half lot. A comfortable, classic interior, with guest space above the garage, a mini-farm with chickens, goats and a green house. . . plus deeded beach access. And details like french doors, a handy mud room, skylights and a brick fireplace OUTSIDE were enough to make the dream a reality for one lucky buyer this fall.
For #4 we stay in the same Sunrise area but move west to Torvanger Road. The kitchen of this house is a Sally Field movie set. A farmhouse on five acres with ten foot ceilings and wide plank wood floors made many buyers line up and take notice this fall. With equestrian potential, this property pulled on the heartstrings of at least 8 buyers who could surely see themselves living here. Yes there were eight offers. The gracious covered front porch and that huge kitchen with white cabinets were just icing on the cake for the property that had so many people hooked once they drove up and saw the white fenced pasture.
For #3 we head back down to Winslow and the water. This house on Hawley Way was designed by Architect Bernie Baker and built in 2003. You can see why it has been photographed by the likes of Sunset Magazine and Coastal Living. Originally built for the owners of our local paint shop, the home dances with colors – my favorite being the chartreuse painted wood windows. Once inside there is just too much to like. Wide plank wood floors, a compact, but smart floor plan that makes use of every nook and cranny, painted kitchen cabinets, exposed wood beams, windows capturing the water view from every room. Not to mention you are a quick walk to the ferry boat. Too good to last more than a few days on the market.
For #2 we hop across Highway 305 to a much larger home designed by talented local architect Karen Thomas – who is now Managing Director of Gensler’s Seattle Office. This home is in the equestrian neighborhood of Derby Downs. Built in 2007 just as the market was tumbling, this amazing home was foreclosed upon by the bank. With over two million invested in the construction of this home, one lucky buyer got it for $1.075k. Now I am not one to love a huge home, but I think I like this house so very much because I know my family would just live in the kitchen. Really and truly. The kitchen has everything a real chef needs, plus a fire place, built-ins for a TV, games, dishes, in addition to a true walk-in pantry room, a mud-room/tack room, and laundry room all adjacent the kitchen. Plus room for a large farm table right in the kitchen. And upstairs are three bedrooms that are not showy or grand, but cozy and charming. Yes, there are two more living rooms and a dining room plus a bonus family room and guest rooms in the basement. But this house won me over because the important areas of what I consider home were designed right.
For #1 we head up north to Port Madison. I am sort of surprised by my #1, but I think I like it so much because it is a little different from what you typically see on the water on Bainbridge. I liked the departure to the bold, black and white style. This one is another large home too (actually 8,000 square feet of living space) but with sweeping views of Port Madison. I can imagine myself sitting in the secret tower office overlooking the water as I work. A writer must have bought this house. Personally I like the relaxed vibe of Port Madison and the quality construction of this home probably put the construction costs at over 4 million. Another crazy deal thanks to our economy that need to implode. I love painted white wood and this home is bathed in it, offset by the dark wood flooring. If I lived here I would need to buy out a Ralph Lauren Home Store (or two or three) to furnish it, but that would be part of the fun, right? And, my husband would love the deep water dock too . . .