Windermere Real Estate/BI, Inc.
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.
The one constant in our real estate market is change. Ten years ago (yes, it has been 10 years!), we were in a very competitive market. Inventory was tight and prices were going through the proverbial roof, setting new highs. Then, in September 2007, that came to an abrupt end and we began a downward trend toward the largest correction since the 1980s. It took until 2012 for the market to shift yet again and gradually pick up speed toward recovery. By 2015, we returned to familiar territory: an extremely competitive market with record low inventories and rapidly rising prices. On July 1, 2015, there were 58 active listings on the island. Now, just one year later, data suggests a potential market transition with inventories rising and price reductions becoming increasingly common.
We in the industry do not view this as a repeat of 2007. There are too many positive factors in our financing infrastructure and regional market that separate this climate from its predecessors. (Indeed, the financing environment is so much more conservative now that securing funding can actually be a hurdle in some transactions.) We are still in a very competitive market and the statistics bear this out. While we may be slowly moving towards a more “balanced” market, we are not there yet. Let’s look at some of the leading indicators that give a glimpse at where we are.
One year ago, there were 112 home listings, 54 of which were under contract. For a market the size of Bainbridge, 58 active listings in the middle of summer is a crazy small number. On July 15th of this year, inventory had ballooned to 162 listings, 64 of which were under contract (leaving 98 active). Yes, this was a substantial improvement from last year. But when compared to the absolute top of our last market peak in July 2007, the 162/64 stat still looks very tight compared to the 2007 numbers, which were 289 listings with 62 under contract. The percentage of pendings to listings is 40% today compared to 21% in 2007. This year’s second quarter median cumulative days on the market is still a brisk 11 days, equal to what it was for the same period in 2015. (In 2007, it was 52 days.) It is still a very competitive market. Our inventory is growing because our price levels are finally bringing in more people from the sidelines. When you look at the history of the sold listings, there are scant few people who are “flipping” or who have bought recently and rapidly selling for a profit. Instead, many of the homes that recently sold were last sold in 2001, 2004, or even 2007 and 2008. It’s also interesting to note that people who have held onto their homes for a more extended period of time (since before the boom years) are realizing very healthy increases over what they paid.
We have finally drawn even with and are even beginning to pass our peak prices of 2006/2007. When we checked the history of all the homes sold in the second quarter, all those that sold in 2006/2007 did better this year. Our year-to-date median is $755,000, a 14.4% increase over last year. This number is exacerbated by the price ranges of the homes sold. Overall, sales were down almost 17% and almost all of the decrease came in homes below the $600K price point. This phenomenon can be partly explained by our old nemesis: lack of inventory. On July 15th, there were 13 homes available on the whole island for less than $600K. Not many choices.
However, we are now seeing more price reductions than even in the first quarter. This is another indication of a healthier market. Pricing still matters, as sellers can’t just ask for anything. As we mentioned in our last newsletter, this is one of many areas where professionals can really help. Overpriced homes usually end up selling for less than properly priced homes, a statistic that has been borne out in all types of markets. This becomes especially important when a market is going through a gradual shift. The bottom line is that prices are rising and healthy. True, the rate may change and is very neighborhood and property specific. But the competitive nature of our current market will help bolster prices.
Interestingly, the increase in inventory has not yet been felt in the residential condominium market. Due to low inventory the volume of condominium sales are down almost 21% from last year. Prices are up 8% from 2015, but the median price is still 13.7% lower than in 2007. In addition to the shortage of available condominiums buyers face potential financing challenges specific to that type of property. In the land segment, sales are down more than 30%! Median price for land is also off 6.5%, which is 47% of the 2007 median. This is perplexing as land sales improved quite a lot between 2014 and 2015.
So our changes are subtle at this time, but in process. On the residential side, the greater inventory gives buyers more choices and potentially more sales. Sellers are seeing price levels that entice people to return to the market-place and support a competitive environment. The regional economy outlook continues to impress and our position in that marketplace remains strong. (What other community can still claim the same commute time to downtown as twenty years ago?) The outlook ahead is all very positive!
This summer, our office is opening a satellite office on Olympic Drive and Winslow Way. There our agents will be able to greet ferry passengers as they first arrive to the island. Our goal is to give our clients more exposure to pedestrian and vehicle ferry traffic and have agents on hand to answer questions. We hope to have our doors open before Labor Day, so please stop by.
EXCITING NEWS! The Seattle Seahawks and Windermere Real Estate have joined in an exclusive partnership that will make Windermere the Official Real Estate Company of the Seattle Seahawks. At the center of this partnership is a new campaign entitled #tacklehomelessness in which Windermere will donate $100 for every Seahawks tackle at home during the 2016 season. On the receiving end of these donations is YouthCare, a Seattle-based non-profit organization that has been providing services and support to homeless youth from across Puget Sound for more than 40 years.
Visiting Bainbridge Gardens is an excursion in and of itself. Acres of garden and landscaping goods, a forest trail, a gift store, a cafe and a playground make it a fun way to get outside. But, Bainbridge Gardens also offers classes. This is a great way to learn about a topic you are interested in and also a nice way to meet other Islanders who have or want to have green thumbs. They have classes for adults, kids, Island Newcomers and in the winter time they have an annual wreath making workshop. Below is a sampling of some of their up and coming July classes. For more classes and info, click here.
Janet Gregersen, CPH
Class Fee: $18 per dish garden
Create a miniature fairy garden. Class fee includes hands-on instruction, soil, starting materials, your choice of three starter plants, and fairy dust. Choose your own start time. Make a reservation between 1:00 PM and 3:00 PM to start your garden with personalized instruction. Most gardens take about 30 minutes to complete. As a participant in the class, you will receive 20% off the regular price of the ingredients you use for your fairy garden, including your container, additional plants and miniature accessories. CHILDREN MUST BE ACCOMPANIED BY AN ADULT.
Jenni McCain, CPH
Class Fee: $8
Wondering what to do or where to start? This popular class offers vital information and inspiration for those new to gardening in the Pacific Northwest or simply for those new to gardening.
The school year is evaporating as I type. One and a half days remain. Two half days for high schoolers taking finals. We are in the last stretch to summer. Wow, that went by fast. The memory of the wettest winter on record in Seattle is almost forgotten as our 70 degree friend called summer is arriving. Yes, we who live here know we live for the glorious summer months in the PNW. May through October are pretty darn fantastic, in fact. Don’t spread that information around too far. We already have a shortage of housing inventory. We sort of want the images of pouring rain they show on Grey’s Anatomy to prevail. Population control, we call it.
The sun is here (for the most part) for the next few months. We really like to be outside this time of year. Below are some great options for the Summer of 2016.
1. Bainbridge Brewing 4th Anniversary Celebration – July 10th & 11th. Enjoy celebrations both days at the brewery and toast with a Special Edition Anniversary Ale.
2. Bainbridge Block Party – June 19th. Downtown Winslow will be taken over by food and music. Celebrate Father’s Day at a festive block party.
3. Summer Kick-off Concert at Bloedel Reserve – June 25th. Sit outside and enjoy live music from two fantastic bands, Ethan J Perry & the Remedy Band and Duke Evers. Pre-purchased tickets required.
4. Rotary Auction at Woodward Middle School – July 2nd. A rummage sale like no other. The sale raises about half a million dollars every year. Drop offs begin June 24th.
5. 3rd on July Street Dance in Downtown Winslow – July 3rd. Rev up for the 4th of July festivities at the downtown street dance. Vendors, music and the ever popular Beer (and wine) Garden.
6. 4th of July Parade in Downtown Winslow – July 4th. The quintessential small town parade is the hgighlight of the day. Locals vendors downtown round out the event so you can indeed make it a full day of food, friends and fun. Finish off the day with fireworks over Eagle Harbor, of course.
7. Wine on the Rock – July 23rd & 24th. Two days of wine, music and food at each of the seven Bainbridge Island wineries.
8. Garden Party at Bloedel Reserve – August 4th. Mingle on the lawn while feasting on hors d’oeuvres from favorite eateries and clinking glasses filled with fine wines. Pre-purchased tickets required.
9. LeRoy Bell and His Friends at the Treehouse Café – August 6th. Treehouse Cafe’ is an excellent spot for live music and good food on the island. LeRoy Bell is an island favorite and always draws a large, fun crowd. Pre-purchased tickets required.
10. First Annual Summer Fest at Battle Point Park – August 13th. A celebration of summer and community at Battle Point Park. A nice way to wrap up summer. A free event.