The Bainbridge Island Ferry from Seattle.  Summer 2013.

The Bainbridge Island Ferry from Seattle. Summer 2013.

Making Sense of a Strengthening Market

The statistics for the first half of 2013 are encouraging but a bit confusing. You look at the number of homes sold and there is joy. A total of 205 homes sold in the first six months even surpasses the “go-go” days of 2006 and 2007. If things are selling so well, why have both average and median prices declined? Our market may be strong, but it is slightly skewed. Our upper end continues to struggle in terms of both inventory and sales. Sales over $1M have dropped 48% from last year (although we have to point out that 2012 was an extraordinary six months for >$1M sales). We only had four sales over $1.5M this year compared to nine last year (and at the 2007 peak, there were 14). The lack of sales in this price range wreaks havoc with the numbers and has brought down average and median prices. There are a number of theories for this softness in the market, most of which are tied to potential sellers waiting for prices to rise (people with large mortgages, downsizers, etc.). This limits the inventory and compels buyers who cannot find what they are looking for to wait. (The inventory over $1M is currently 41% of what it was at this time in 2007.)

A Growing Middle

The good news is we are seeing more activity in the over $800K segment. At the end of the first quarter, we were at par with the number of sales between $800-$1M from 2012 and 2013. Now at the end of the second quarter, we are up 50% in that price range. Of the four sales over $1.5M this year, three occurred in the second quarter.

Bainbridge Island Real Estate Market 2013

A Strong Base

With all that being said, the rest of the market is doing quite well. In the first half of 2012, the Median Cumulative Days on Market of sold homes priced between $0 and $700K was 75 days; this year, it was only 22 days. We are not experiencing the quantity of multiple offers as our neighbor, Seattle, but they are not uncommon. It is extremely difficult to calculate price movement within price ranges, but we can say with confidence that prices have stabilized and are beginning to move up with properties that are getting a lot of attention.

The Condo Report

In many regards, the condominium marketplace is experiencing similar conditions. There have been 40 condominium sales in the first six months of this year. This is up 17.6% from last year and 66.7% from the market low of 24 in 2009 (but still way shy of the peak of 93 sales in the first half of 2004). Of the 40 condos sold, only one went for a price above $600K and only four above $500K. This is a mere 10% of sales compared to 40% of the 80 sales in 2007 that were above $500K (32 sold above $500K and 20 sold above $600K). It is no wonder the median price of condominiums sold this year is $318,500 versus $468,125 in 2007 (down 32%). Part of the problem may be that there are only seven listings over $600K. The good news, though, is that two of those seven are under contract as of this writing. There appears to be more life in the upper end of the condominium marketplace, but we need more results to be able to say so definitively.

Fort Ward on Bainbridge Island.  Spring 2013.

Fort Ward on Bainbridge Island. Spring 2013.

Solid Land

Land sales bottomed out back in 2008 with only nine sales in the first six months. Since 2011, we have seen steady land sales growth: 12 in 2011, 22 last year and 28 this year. We still have a ways to go to match the 53 land sales we had in the first half of 2004. However, we are experiencing good, consistent growth. Similar to the other segments, 86% of land sales were priced under $400K. Most sales have been concentrated in the city core area and have been purchased by custom home clients. (Individual lots outside of the core struggle as small individual spec builders still have trouble with financing.)

Developing Stories

Although small spec builders have yet to return in appreciable numbers, there are a number of developments either under construction or in planning around the island. The largest (and most visible) is Grow Village, where construction is underway and people are paying close attention. Also under construction are 15 new homes on Ericksen Ave. (“Ericksen Urban Cottages”), six on Burlingam (“Burlingam Court” by Hudson Homes). Nine homes will begin construction next week off Springridge Road (“Timberbrook” by DeNova Homes), and 18 are being proposed for Wing Point. Pleasant Beach is also in the permitting stage for 22 additional apartments after the existing inventory rented at a rapid pace. New construction is an indication of confidence and optimism and these projects send an important message: “We are back!”

4th of July on Bainbridge Island

4th of July on Bainbridge Island. July 2013.

Seeking Balance

Even with our market’s renewed vigor, we could use a bit more balance. There is positive movement in our more expensive homes and condominiums, but in general the people who are in that segment are frustrated by the slowness of the recovery. Buyers are battling with a lack of inventory and choices while sellers are looking for better prices before committing to sell. We will get there; it just may take a little more time. We have been steadily improving since 2010 in terms of homes sold, so as long as there are sales and demand, prices will strengthen and improve.

Annual 4th of July Parade on Bainbridge Island. July 2013.

Annual 4th of July Parade on Bainbridge Island. July 2013.

Constants

What never changes is Bainbridge Island’s distinct character. We are a unique community, where people want to live. Where else can a Rotary Auction gross over $440,000 in six hours? The net proceeds will be recycled back primarily into our community’s non-profits, schools and students (1/6th of the proceeds go to international programs like ending polio and water wells in Uganda).

Million dollar homes 1

Last year we had a banner year in regards to the million dollar market’s volume – selling 50 homes over a million dollars, more than double the volume of 2011.  Part of the reason for the activity was lower prices. Price per square foot was lower last year than in 2010, when only 27 homes sold.  The decreasing prices illustrated above equaled affordability for more buyers.  But, as the market activity has picked up, the inventory has decreased and prices are starting to go back up as supply and demand is working against buyers right now.  How will this affect the high end market this year?  As of now it has slowed significantly.  Will it pick back up as the seasonal spring market emerges? Time will only tell.

Bainbridge 2012 sales

Some amazing high end sales last year are highlighted above.  The key difference we saw last year was the popularity of large properties that were not waterfront, like Secretariat and Alpena above.

Bainbridge current million dollar market

Just some of the stunning properties currently on the market.  South Beach is a favorite of mine for its terrific south west exposure.  Bergman is a classic piece of history on glorious Manzanita Bay. Let me know if any of the above homes look interesting, happy to send you more info and let you know what they are like in person, I have toured every one.

On February 26, 2013, in Market Trends on Bainbridge Island, by
Bainbridge Island Real Estate Market 2011

The radical shift in the real estate market we were hoping for in 2011 never arrived.

2011 Year End Review

As real estate agents we entered last year full of optimism and hope that 2011 would usher in numbers far different from what we saw in 2010.  But, by the second quarter we realized there were not going to be any major positive shifts in our real estate market. We rebounded a bit in the third quarter and the fourth was slightly better than the same period in 2010.  But, overall, a pretty steady repeat of 2010, with home prices dropping even more.

In the end, the market mirrored its actions of the past few years, going up and down without ever really hitting its stride. The number of homes sold has increased each year since the 2008 trough (which is good news), but we are not seeing numbers anywhere close to where we were a decade ago . . . nor are we likely to for another decade.

 

2011 year end real estate stats for Bainbridge Island, WA
Blakely Students at Hey Day Farm on Bainbridge

Blakely Elementary Students harvesting potatoes at HeyDay Farms. The potatoes were used in school lunches throughout the district.

Reshaping our Community

Even though the number of homes sold has not changed much, there are a number of profound shifts taking place in our market. We are seeing more investors and families returning to our marketplace. The drop in our prices, while painful to sellers, has made our community more affordable to buyers. We are also seeing buyers with different “agendas” than before. Real estate is not the short-term money machine it was in the past. People are buying because they want the non-financial benefits that homeownership offers. They’re buying because they want to live in particular homes and build lives there. The amazing congruence of low prices and incredibly low interest rates is allowing people to recognize they can buy more than they could have in the past. They feel confident their purchases will make sense in the long run. They do not have the inflated financial expectations we had in the past. They are realistic about the costs, but prefer buying over the risks of renting.

Bainbridge Island Ferry Commute.

Cyclists unloading at the Bainbridge Island Ferry Dock.

Looking Around the Corner to 2012

Settling into the reality of our new norm, we do not expect any substantial changes in our real estate market in 2012. But there is an underlying optimism. There are buyers. They’re patient, savvy and tough . . .but they do act when they find what they want. Many sellers have become more realistic and have come to embrace the current conditions, as painful as they may be. Our regional economy is strong. If we can keep ferry prices from getting to a point where commuting costs are unacceptable, there is no reason to believe we will not fare as well as any premium suburb of Seattle.  And all the while we get to live in the best island community in the region.

 

Skill on the part of the agent and patience on the part of the seller. The market, as we know, is not as swift as we all idyllically remember. The key, I believe, for the sale of a home boils down to two key factors – price and location. A home priced right, or a bit below market, will eventually sell. A home in a good location, priced decently will sell. When we had to sell our home in the “down market” of California, I was an agent and I had learned those two rules. We were planning to move over the summer, as many folks do, so that gave us a smallish window of time to work with. It was May 1st and ideally, I wanted my kids to be settled in our new home, in our city, by Labor Day Weekend. We lived in a good location, but we still needed to be right on with our price to make things happen quickly. I could have started our house out $25K or $50K higher than what we ultimately did, but chances are we would have still been sitting in that house or at least sitting on our mortgage come Labor Day. Think about the math 6 months or 12 months of a double mortgage, your old mortgage being say, $3K a month – that is $18K or 36K, right there. Not to add in the maintenance of the home, fees for a bridge loan, if you needed one to buy a home before your old one sold, and the biggee, the emotional stress of having your life in limbo. So, in the crummy Californina market, we priced our home correctly, at market value, and it sold in three days. So, by the 4th of July, we were in our new home.

I read this article on Seattletimes.com today, and thought it fitting to post the pointers of the article here :

• Don’t base the price on what you paid or what your neighbor got a few years ago.

• Do examine the prices of homes for sale in your neighborhood, as well as the prices of comparable homes that have sold in the past three to six months.

• Don’t pick an agent simply because he or she suggested the highest list price.

• Do pick an agent who offers a thoughtful explanation for the price he or she is suggesting.

• Don’t go overboard with remodeling. Rarely can you recoup the cost.

• Do make minor improvements so your home is in as good as, or better, shape than the competition.

• Don’t set your price based on emotional attachments and cherished memories.

• Do ask your agent to reassess the competitive landscape every few weeks to make sure your asking price is in sync with the market.

• Don’t be stubborn. If weeks go by without any offers, the price most likely does not reflect the value of the home. It’s time to consider cutting the price.

• Do be patient. You might have to wait longer for buyers to pull their money together now that lenders have toughened their standards.

On May 4, 2008, in Real Estate Business, by

Ferry in Eagle Harbor on Banibridge Island
1. It is truly an island
Yes, there is a bridge to Poulsbo and beyond, but the Sound between here and Seattle is a perfect buffer to the action of the big city.

2. The low crime rate
I know we are not isolated from bad things or bad people, but I can breathe a little sigh of relief when I step off the ferry. The statistics speak for themselves. However, the incident at the pool the other day, proves it is very hard to totally get away from crime.

3. The great Bainbridge Island School District
We go back and forth with Mercer Island for the top spot in the state. However, as a former teacher, I know test scores are not everything. I love the small school my daughter attends. I love the feeling of the school, the kindness of the staff. The small size ensures that my daughter won’t get caught in any cracks and I love that Judy, the school secretary knows the names of everyone in our family!

4. Islandmoms Facebook
This group is awesome. It is a wonderful support community. If you are looking for a recommendation for a painter or doctor, this is the place to go. For feedback and advice on anything island, this is the message board to read and write on. If you are looking to borrow snow boots or a costume for your child, a total stranger will probably let you borrow them. It is great!

5. The Treehouse Café
They have the best Cesar salad and our family loves eating pizza on the couches in the restaurant.

6. Blackbird Bakery
An island institution. I just like knowing it is there. I am not too hip on their sweet stuff (my youngest daughter is though) or coffee, I actually like their loaves of wheat bread.

7. Dancing Paint Ceramic Studio
A great spot to spend an hour or two on a rainy or sunny day. It is a beautiful, light filled studio in downtown Winslow. You and/or your kids will love the creative outlet . . . and you thought you had enough coffee mugs, never! )now closed :(

8. The Bainbridge Island Public Library
Carmen the children’s librarian does a top-notch job with storytime. My preschooler loves to listen to her read and act out stories! Pierre the French Mouse is pretty cute too.

9. Sawan Thai Kitchen
Green Curry Chicken, yumm. Three-Star Spicy is spicy enough for me!

10. Bainbridge Performing Arts Theatre
Folks from Seattle ferry over to see our plays . . . and folks from Seattle come over to be in the plays too. They offer a great theatre program for kids too. My daughter loved the camp she was in last summer.

On March 31, 2008, in Activities, Community, Personal, by

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.