Blakely Harbor on Bainbridge Island.

Things That We Know Are True

In the real estate business, we know never to count our proverbial chickens. Offers aren’t made until directed by a client. Offers aren’t successful until they are accepted. Inspections aren’t completed until everyone is satisfied.  And we never take a transaction closing for granted. Every step forward is a cause for celebration. We view the market in the same way, especially since 2008. So when we say that the first quarter of 2018 had many similar challenges as the first quarters of the past few years, we mean that there was strong demand, some supply, affordable interest rates, and a solid outlook. So we celebrate the first quarter, warts and all.

Beautiful Imperfections

Even some of the warts aren’t as bad as they might seem. This is particularly true of inventory, which has experienced new lows. At the beginning of April, there were only 40 available (active) single family home listings on the island. This includes all prices, pre-sale homes (which haven’t even been finished yet), and your typical cadre of homes that are woefully overpriced or in a condition or location most normal buyers shy away from. (Bainbridge is different from Seattle, where these types of things tend not to deter buyers.) Nevertheless, 66 homes sold in the first quarter, which surpassed our sales from the past two years. Those additional sales also confuse the lower inventory numbers because homes were essentially selling faster (some might call it “velocity” or “higher turn”) so there would have been more homes left on the market if we sold homes at last year’s rate. (The average cumulative days on market fell from 85 in 2017 to 70 this year – a 17.6% drop).

Combined with a 20% increase in both average and median prices (for the first time, our average price for a quarter is over $1 million), you would have to conclude that our market is very strong. Granted, buyers are paying more with fewer choices, but we are still seeing buyers looking west from Seattle and finding a far saner market with much better values. This surge is not limited to single family. Condominium sales matched last year (technically, up by one) with the median price growing 12%, from $515K to $575K. Land sales, unimpressive last year, burst out of the blocks in 2018 with a 50% increase in lots sold and a 100% increase in median price ($217,500 to $435,000).

New construction on Bainbridge Island

The Supply Chain

We know that demand is strong this year, but what about supply? The building behind Harbor Steps (between Cave and Ferncliff) is called Bainbridge Landing and will consist of about 114 rental units. The DR Horton project on Sunrise and Torvanger (11 homes) is about 70% complete with two homes remaining for sale. Quadrant is building 19 homes on Weaver (they are well under construction). The Reserve at Winslow on Finch Road features 12 luxury homes, Madison Grove off of Duane Lane includes eight luxury homes, and Madison Landing at 937 Madison Avenue includes 24 condos. These three properties are being developed by Island Communities by Millennial. The Roost has begun their second phase of live-work structures and The Residences at Pleasant Beach is going in for permits on their second tier of 12 homes. All of these projects are being built within the geographic boundaries of our current comprehensive plan, which has pushed density into specific neighborhoods on the island, leaving the vast majority of our land mass with its much lower density zoning.

Looking Around

How about our neighbors to the west and north? The North Kitsap market (Hansville to Poulsbo) is also active and fast-moving right now. There, 167 homes sold in the first quarter, with an average of 46 days on market, and at a selling pace 34% faster than ours. Since 2015, the median price (currently $385K) has risen 23%, almost 17% of which was a change from this year over last year. Things are popping across the Agate Pass Bridge.

The Value of Knowledge

If the first quarter is an indicator of the rest of the year, it appears we are in for an active year in Bainbridge Island real estate. To keep things moving in the right direction, experienced real estate agents bring a lot to the table. In an environment when buyers need to make decisions on sometimes short pressurized timeframes, a good agent will have sellers’ listings prepared in a fashion where the potential buyers feel more comfortable stretching their budgets. When representing buyers, it’s as much about preparing them to be able to act as it is about advising on locations, limits and putting things in the proper perspective. This guidance to both sides may sound “simple” but often makes many thousands of dollars’ worth of difference in transactions (to say nothing of the peace of mind it provides all parties).

So, right now,  things are good – occasionally a little stressful, but good. Please feel free to call or email to talk about how this current market can work with your current real estate plans.

Investment and Equity Opportunity in Winslow

Happy to present my newest listing in Winslow.  Terrific location walking distance to services and Bainbridge High School, parks, library, aquatic center, ferry and more. Affordable price point for the buyer with vision and creativity. Come take a look today, Thursday 10am to noon and Saturday (4/15) from 1 to 4pm.

For sale by Jen Pells at Windermere Bainbridge

Details about the home:

Spacious in-town home and lot has two beds and 1.5 baths on the main level and another two beds and bath in walk-out daylight basement. Enjoy western sunsets from the larger newer deck. Easy living close to K-12 schools, shopping, and the ferry. Potential for multi-generational living or two separate living spaces. Buyer to verify with COBI the ADU potentials. RV Parking and fully fenced backyard. Bring your tools and imagination.

  • Four bedrooms
  • 2,318 square feet
  • .28 acres
  • 2.5 baths
  • 2 beds on main, 2 in lower level walk-out basement
  • Built in 1988
  • Asking $499,000

Click here for more info

 

A Market Regains its Momentum

Jen Pells Bainbridge Island Realtor

Inventory Continues to Drive the Island Market

All in all, 2014 has to be viewed as a very good year for the Bainbridge real estate market. The primary challenge of the year was a lack of inventory, which meant that buyers had too few choices. As we begin 2015, the same low inventory levels that drove the market in 2014 are even more pronounced. So it’s not a stretch to imagine that we may be in for more of the same in the coming months.

The AvailabilitySalesPricing Triangle

Fewer homes actually sold in 2014 than in 2013. We began the year with record low inventories – 70 homes available (on the market and not  under contract to be sold) – and ended the year with even fewer available (a mere 56!). This actually dampened sales because buyers couldn’t find what they were seeking, so many opted to continue to stay where they were, rent or go elsewhere. Sellers were reluctant to put their homes up for sale because they were afraid they couldn’t find new homes should their houses sell. (Approximately 40% of the sales on our island are from people moving around on Bainbridge.) This created competition for desirable homes, which pushed prices upwards.

The Story Behind the Prices

So what is going on with prices? We are showing an increase of more than 17% in both average and median prices. As with any statistics, it is beneficial to look at the numbers in some detail and in the context of the bigger picture. As we have discussed before, published price changes have as much, if not more, to do in the “short run” (three years or so) with the price ranges buyers are in rather than with the price changes of individual houses. In this regard, there were some profound changes between 2013 and 2014. In 2013, 46% of all sales were $500K or less, but in 2014 that number dropped to 34%. Conversely, in the $500K to $800K range, there were 164 homes sold in 2014 versus 154 in 2013. Above $800K, there were 101 homes sold in 2014 versus 69 in 2013. The demand for homes in the upper price ranges increased, stimulating sales of more expensive homes and boosting both average and median prices. This activity shift was welcome news to our middle and upper market. When looking at the market as a whole, the median price of a home on Bainbridge needs to increase another 13% before we will be at our 2007 peak, but we are getting closer every year to returning to that high mark.

IMG_8103One Address at a Time

But what about individual houses? How does this increased competition affect the marketing strategy for each home about to be listed? There are many factors that determine the best approach for each property, the primary one being the makeup of the buyer pool at any one time and how each home conforms to that group’s wants and needs. This is where a professional real estate agent who is active in the market comes in. There is always a desire to “push up prices,” and a knowledgeable agent can assess how quickly and how high to push. Houses sold about 21% faster in 2014 than 2013. Also, the median sales price percentage of original listing price increased from 97% in 2013 to 97.7% in 2014. Both indicate individual home price increases because they are selling more quickly and closer to list prices than they were before. If you are curious about your home’s value, I would be happy to give you an idea of where you are.

A Busy Condo Scene

The condominium market experienced improvements in almost all areas. The number of sales were up almost 9%, median prices up 8% and there were four sales over $1M. These were the first condominium sales over $1M since July of 2010! The bulk of the sales (67%) were $400K and below, but there were sales in all price ranges up through $1M. Again, inventory has been scarce, especially in some of the middle price ranges. There were times when there was no inventory between $600K and $800K. Even though the median price of $335,000 is well short of the peak price of $464,000 in 2007, the direction is positive.

An Active Land and Development Segment

As with homes and condominiums, there was not an abundance of parcels for sale. The number of sales decreased more than 17% from 2013 but that was a particularly active year. Excluding 2013, there were 30% more parcels sold in 2014 than the best year going back to 2007. On the development front, things are quite active. To name a few: Grow Avenue’s second phase is under construction; the Wyatt Way parcel down the street is in feasibility review for approximately 19 new homes; and Lynwood Center has two projects in the development phase with Pleasant Beach Village Hillside and the “Roost” off  Pt. White Drive and Baker Hill Rd. These last two developments alone will represent approximately 50 new homes and both are slated to be active in 2015.

 

Seattle from the Bainbridge Ferry by Jen PellsRing in the New Year

The coming year should prove to be an interesting one. Even though it is only January, the “buzz” is positive among buyers and sellers. The markets on both sides of us, Seattle and North Kitsap, are healthy. Seattle has quieted a bit from the craziness of the past couple years, but is still very robust while North Kitsap is experiencing one of the fastest starts ever. The region is looking good, the days are getting longer, no obvious storm clouds are in sight and we are off on the adventure of 2015!

grab

 

 

 

Bainbridge Island Real Estate | 2012 | Jen Pells

The Big Picture on Bainbridge Island. The tide it is a changing.

The Big Picture

If you consider only the number of homes (or condos) that sold during the first quarter of this year, your initial reaction would probably be, “Ho hum.” Look carefully, though, and you will see some interesting things. If you include what is happening now, in mid-April, you might get even more intrigued.

There were 55 homes sales in the first quarter this year, compared to 56 last year, which indicates stability more than improvement. Nonetheless, these are good numbers compared to 2008 (when there were only 34 sales) and 2009 (with 37 sales). Condos dropped from 19 sales in 2011 to 12 this year.

So far, not a lot to get excited about. But when we look at the median price, we had a 6.2% increase. Our first quarter median price has been declining steadily since its peak in 2008 – until this year. When you look at the distribution of the sales, the median increase becomes clear. Sales over $800K were up 320% from last year. In all of 2011, there were 24 sales over $1 million; this year we have already had 12 just in the first quarter. (I cannot help but point out Windermere Bainbridge was involved in 10 of those 12 sales and Windermere represented 50% of the parties involved.)

Bainbridge Island Real Estate | 2012 | Jen Pells

The stats are looking up, especially in the over million dollar market.

Stats Tell a Positive Story

On March 30th, there were only 59 homes under contract. By April 5th, there were 74 homes under contract. By April 10th, there were 80. Of those 80, 22 are over $800K and 13 over $1 million. We have not seen these kinds of numbers in several years. Not only are the numbers good, they have grown quickly this month.

Over the past five years, we have had strong individual quarters like the first quarter just ended. But we could not sustain the momentum, and poor performance followed. In 2011, the first quarter was up 14% but then dropped 14% in the second quarter (from the previous year). Our market has gone up and down on an almost quarterly basis while prices have steadily decreased. Now we see a strong first quarter, prices inching higher and a very strong start to the second quarter. These are all positive indicators. Optimism is beginning to creep in, but it will take more time for many of us to feel comfortable making any proclamations. We’ve been lured by the sirens before only to find ourselves on the rocks.

Fall on Bainbridge Island | Jen Pells | Realtor

Fall on Bainbridge Island.

3rd Quarter Review: A Bifurcated Market

In the third quarter, we saw more of the same trends that have been in place since the start of the year. There continues to be a divide between our two primary markets and the line between them is neatly drawn at the $600,000 mark.

Properties priced under $600,000 continue to sell steadily at a pace not seen since 2005.

Properties priced higher are still struggling mightily, although there may be a glimmer of light on the horizon.

Where the Sales Are Year to Date

Single family homes. In the first quarter of this year, single family homes sold better than they have since early 2007. The wheels fell off during the second quarter, and sales of these properties dropped below where we were mid-year 2010. Things rebounded in the third quarter and rose to meet last year’s Q3 numbers, which means sales surpassed the 2008 and 2009 third-quarter sales.

The $400K sweet spot. While the $600,000-and-under market has been our strongest this year, this recent surge has been powered by sales at or below the $400,000 mark. So far this year, we’ve closed 67 homes in that category, which is the best we’ve done in that price range at the close of Q3 since 2005.

Between $400K & $600K. We also did well in the $400,000-$600,000 range, with 76 homes sold since January of this year. These numbers gave us our best performance since 2007 for this mini-category. (We consider September 2007 the beginning of the market correction.)

Key Factors

Our enthusiasm for these numbers is tempered by the softness in the rest of the market. In our first three quarters, we had 56 homes sell for $600,000 or more. To put it in perspective, in the first three quarters of 2007 there were 183 sales in this price range. That period in 2007 exemplified the peak of the “multiple offers” frenzy, but even in the more sedate year of 2005 there were 150 sales through September over $600,000.

Fall on Bainbridge Island | Jen Pells | Realtor

Fall on Bainbridge Island.

Here are some of the things to take into consideration:

Pricing statistics: It makes median and average price numbers very misleading when you apply them to a particular house. The average/median price numbers are down 11+% from last year. We believe that the number is too high for the active market less than $600,000 and unfortunately probably too low if your home is priced over $600,000.

Pricing strategies: Each home has to be viewed in light of how much competition there is, how good the competition is, how many buyers are perceived in that particular market segment, the timeframe the seller has to sell, and any external factors (such as a loan that would end up greater than the price level required to sell a home and the seller’s willingness to go down that road).

Days on the market: Sellers of homes priced less than $600,000 are looking at a cumulative days on the market (CDOM) of 75 days. For homes priced over $600,000 the median is 117 days. There have been segments in our market where the evidence indicates that there simply weren’t any buyers, or very few, for a period of time.

Re-categorization: The reality of this market is that many homes previously categorized in higher pricing segments (even as high as the $800,000 range) are now falling into the $600,000-and-below column. The whole middle of our marketplace has become more affordable through this correction, so it would make sense there are more sales in those price ranges.

The upper end: We’ve concluded that the lower end of the market is doing okay. But what’s going to happen to the $600,000+ market? The good news is we are seeing a gradual improvement. On August 1, there were nine pending sales for homes priced above $600,000. One month later, there were 11 more. At the end of September, there were 13 more. This upward trend is encouraging.

Leading the way: Having one segment of our marketplace exhibiting as much strength as it is has to be viewed as a very positive move in our road back to normalcy, whatever that turns out to be. Now all we need is continued momentum in other segments.

 

 

 

 

Looking for something?

Use the form below to search the site:

Still not finding what you're looking for? Drop a comment on a post or contact us so we can
take care of it!

fbox2
jennifer@jenniferpells.com
206.718.4337
fbox3
Windermere Real Estate/BI, Inc.