Windermere Real Estate/BI, Inc.
Excited to share my new listing in Fletcher Bay on Bainbridge Island. Fantastic, flexible floorpan with room to breathe on over half an acre of property that backs to three more acres of open space. Come visit in person Sunday 1pm-4pm. And please feel free to reach out for more info.
Details about the home:
Room for everyone in this classic three bedroom home that also offers two offices and an extra-large bonus room. The eat-in kitchen opens to a vaulted great room that connects to another office/media room. Ideal for entertaining-easily move from the open kitchen to dining room to landscaped yard. While outside enjoy the waterfall, garden beds, lawns, fire pit and connection to three acres of open space adjacent to home and shared by the four homes in the enclave. Close to Winslow and ferry. Easy walk to beautiful public beach access at Fletcher Landing.
With regard to the Bainbridge Island real estate market and its year-end numbers, the similarities between 2016 and 2015 are striking. In both years, the market struggled with a lack of inventory and strong demand, while the market trends (that actually began in 2013) continued to respond to this condition. What makes 2016 special is we surpassed most (if not all) of the records set in our last ascending market of 2004-2007. While it makes some people nervous to be in this rarefied air, with the uncertainty that can accompany it, we don’t foresee any specific event that will change our market trajectory in 2017 (with one possible exception, which I will discuss later).
The median price of a home sold on Bainbridge has never been higher than in 2016. Even more impressive is the growth in the median, which has risen steadily since bottoming out in 2011 following the difficulties that began in 2007. In only five years, our median has grown from $493K to the current $740K – an increase of 150%. In that time, we officially drew even with and then surpassed the 2007 peak median of $680K. This is welcome news to all those sellers who have been hanging in there, whether they wanted to or not, waiting for prices to climb back up.
Our upper end has been the last market segment to enjoy our market’s resurgence, and finally joined the party in 2016. Sales over $1M were up 32.4% from 2015 and up 88% from 2014. Not only did we set a new “highest price sold” of $5.97M but we had five sales over $3M. Previously, the highest price for a home sold was $3.497 in 2007. Also for comparison, in the ten years between 2005 and 2015, there were only eight homes sold for more than $3M (an average of less than one, compared to the five sold in 2016).
Our condominium market also experienced a resurgence. In 2008, there were only 42 condominium sales on the island; in 2016, we had 104 sales distributed over all price ranges – the largest number since 2007. The condominium valley floor was in 2012 with a median price of $297K. In 2016, by contrast, we raised that by 35%, reaching a median of $400,750.
Although land sales were down last year (for reasons that are unclear, but we suspect a cyclical reaction from 2015’s exceptionally strong sales), new construction seems to be everywhere (especially in community centers). There is a plethora of multi-home projects underway across the island. Some are being developed by local owners, but we have also seen an influx of off-island larger development companies. New communities under construction: Ashbury – Off Wyatt – 18 residential homes (off-island developer); Landmark – Off Wing Point Way – 17 residential homes (off-island developer); Ferryview – Off Wing Point Way – 11 condominiums (off-island developer); Roost – Off Baker Hill – residential, commercial and townhomes (island developer); Pleasant Beach Village – 14 view condominiums (island developer). There are also many multi-home projects in the planning/permitting stage (Weaver, Finch and Torvanger to name a few).
The development we’re seeing in places like Winslow and Rolling Bay addresses a sentiment we’ve been hearing from our clients for years: “We want to downsize and move into town.” As the higher end has become healthier, people have been able to achieve their goals of selling their larger homes (to enthusiastic new buyers!) and moving to smaller homes or condos in denser community centers. We anticipate Lynwood Center will also benefit from this trend as new homes come online (like The Roost and Pleasant Beach Village Townhomes and lots).
We’re keeping a close eye on interest rates, which are slated to go up again sometime soon. The concern is they rise to a point where they materially affect mortgage payments (and therefore home prices). Loan rates are still exceedingly affordable, so let’s hope they stay that way.
Demand will probably not be a concern for 2017, and supply will still most likely lag demand. We have new projects coming on-line now and throughout the year, but we still see some clients waiting to sell their homes (adding to inventory woes) because there aren’t yet enough choices on the market to justify the risk of having nothing to move to once they sell. The new projects will help, especially because they provide what current potential sellers have been asking for, but we see overall demand still exceeding supply. As much as last year? That could depend on what happens in Washington DC . . .
Will 2017 go down the same growth-oriented path as 2015 and 2016? Will the change in federal leadership have a negative impact on our market? Obviously, we can’t predict unforeseen events, but the economic outlook for our region is very positive. Professional and business services jobs are predicted to grow 3% in the Seattle Metro area next year. Computer and mathematical jobs up 3.5%. All that growth without any new transportation infrastructure only makes Bainbridge look increasingly appealing. People continue to look beyond King County, and many are excited to discover the beauty and quality of life found on Bainbridge Island.
Yes, you heard it. That was indeed the musical firetruck. The iconic tour around the island is already underway. Wasn’t it just Halloween? I am never ready for Christmas, but I must say the snow day we had last week did really nudge me into the holiday spirit. I love that the truck hits our neighborhood on the 23rd or 24th every year (because by then I am finally ready for Christmas) but I love seeing the truck out and about the island as we lead up to the merry day. Thank you Bainbridge Island Fire Department for this very Bainbridge tradition. Listen for the truck 5-9pm from now until Christmas Eve. Link to a larger version of the map and schedule here.
And note, if the truck has extra time they can make additional laps through your neighborhood. We have been lucky enough to see them twice in some years.
My Christmas tree is NOT up. Not even close. Is yours? Thanksgiving is officially over and the winter holiday season is underway. I am NEVER ready. But, ready or not, this weekend and next islanders will be out in force hunting down Christmas trees. Next week there are snowflakes in the forecast, so this weekend might be ideal. Brrr. If you don’t believe me, read Cliff Mass’ Weather Blog.
If you’d like to make a day of it and go out and cut your own tree, you will find the map below helpful. You could combine breakfast at the Port Gamble General Store with tree hunting. Stay warm! And remember, trees always look smaller in nature. Measure twice, cut once.
It’s election season, which means we hear assertions from candidates that sometimes warrant a bit of fact-checking. The same rules apply to real estate. At Windermere Bainbridge, we’ve heard a lot of mis-perceptions and embellishments about the state of our local market. “The bubble is bursting!” “Prices are being slashed!” “Prices are going up!” “Our market has peaked!” “Our market has gone crazy!” We’ve heard all this and more. So we’re here to set the record straight. Think of us as your real estate fact checkers. The fact is we are in the midst of a very healthy (not crazy) market that is moving in a manner we have been predicting for some time. Let’s explore the specifics.
ASSERTION: “Sales are down compared to last year and we are moving downward!”
FACTS: We have said for some time that the lack of inventory was holding our sales in check. When we started the 2016 business year (on January 4th to be exact), there were 53 houses available on all of Bainbridge Island. The first quarter ended with only 47 homes available. This lack of choices crippled sales and reflected a 21% drop from first quarter 2015 sales. But this lack of inventory also helped push prices up, bringing more sellers into the market. Consequently, our inventory began to grow, which meant sales did too. By the end of the second quarter, inventory had grown to 92 homes. (Still low compared to Q2 2008 when we had 291 homes available, or to 2012 when the recovery had set in and we had 189 homes available.) Our year-to-date sales number also dropped from 21% down to 15% by the end of the second quarter. Now, with the third quarter wrapped up, our available inventory is 98 homes (compared to 77 last year at this time) and the number of third-quarter sales rose by almost 5%. Hardly a sign of a decreasing market.
ASSERTION: “Prices are being slashed!”
FACTS: It’s true we are experiencing price reductions. This is a normal phenomenon created by sellers being unrealistically optimistic and buyers being informed and disciplined. The demographics of our marketplace bring more experienced buyers than many other markets. They are informed, know the risks of overpaying, seek professional advice and are careful. It’s like the old expression, “It’s the seller’s job to ask and the buyer’s job to say no.” Here also, sellers who seek (and listen to) competent professional advice in pricing will often experience less disappointment, along with a quicker and often more profitable experience. (There are reams of data showing that properly priced homes net more than overpriced homes that adjust downward.) Prices are still rising. The median price is up 17% from last year. The median price of homes sold during the third quarter this year was $765K, compared to $648K last year. This strength is reflected in the shift of sales in specific price ranges. There were 47 sales below $600K in the third quarter last year, but only 35 this year. Conversely, sales over $600K grew from 61 in 2015 to 78 this year! This indicates a shift upward in the prices of all homes. Hardly a sign of falling prices.
ASSERTION: “Prospects for new inventory are stagnant!”
FACTS: Developers from all over the nation are eagerly investing in our market, which is also a signal of strength. Two new home projects are currently being marketed in Wing Point and a project by DR Horton is under construction on Wyatt Way. The “Roost,” Grow Village Phase 3 and another DR Horton project at Torvanger/Sunrise are coming out of the ground. The long anticipated project at Pleasant Beach Village will start next month and another neighborhood at Weaver and Finch are in the planning/design phase. These projects will continue to bolster inventory and provide our healthy buyer pool even more choices. Hardly a sign of stagnation.
ASSERTION: “The condo segment is too limited to grow!”
FACTS: Our condominium market is experiencing similar strong activity. At the end of the third quarter last year there were 5 active condominium listings; this year there were 26 available. Last year, 25 condos sold during the third quarter; this year 42. And prices are up over 8%. As home prices continue to rise, condos provide attractive alternatives. Pleasant Beach and Grow Phase 3 are both great examples of single family home alternatives in areas where services and amenities are concentrated. They are both examples of our comprehensive plan to enable growth while maintaining our rural feel. Hardly a sign of a weak market segment.
We are very happy with our current conditions and don’t see anything on the horizon that would likely disrupt the trend in the near future. Crystal balls are dangerous (we certainly learned that in 2007/2008) but our region shows every indication of continued strength. Seattle is strong and more and more people are trying to escape from the challenges of its growth. Kitsap is also strong, with sales up and growing. Barring some big surprise, we see strength continuing at least through next year. The Bainbridge real estate market is looking good, and that’s a fact!