Is a Normal Market in Our Future?

Jen Pells Real Estate on Bainbridge Island

Getting Real

Let’s put it on the table right away: Our real estate market did not perform at the same level in 2018 as it did in 2017. But that does not mean we had an unsuccessful market in 2018; nor does it necessarily mean we should brace for a difficult market in 2019. We just have to apply a bit of perspective.

Taken in the context of historical numbers, it appears 2017 was an “outlier,” especially between July and December. There was a frenzied demand throughout 2017, reflective of (but not nearly as severe as) our metropolitan neighbor across the Sound. On Bainbridge, we had a peak during the second half of 2017, which flowed into the early months of 2018. But then the frenzy cooled, as it did in Seattle, and we moved toward a slower pace in the second half of the year. (There were 314 homes and condominiums sold on Bainbridge between July and December 2017, surpassing the previous high of 290 during that same period in 2015). When viewed historically, 2018 appears to be much closer to “normal” than 2017 was. And, when taken in the context of the larger local and national economies, we actually believe our real estate market held up very well.

Considering All Factors

Thenumberofhomessoldduringanyperiodisonlypartofthepicture.Whenwelookatrealestate appreciation, 2018 was very successful. For the year, the median price for homes and condominiums combined rose almost 8% in 2018 (and homes alone rose 8.4%). The second half of 2018 saw appreciation of almost 5% over the second half of 2017. These are healthy num- bers and consistent with a healthy market. Using general statistics (like the median price) only gives us an idea of the movement of the market, and not necessarily of any individual home. But it does give sellers an inkling of the direction of their homes’ values. The rule of thumb says that a home needs to be owned for at least five years to really benefit from a market’s movement. Comparing the median home price sold at the end of 2013 ($527,000) with the same price at the end of 2018 ($908,500), we have seen a 72.4% increase. So if you had purchased a home in 2013 and were to put it on the market today – assuming it was properly presented and marketed – you would probably realize a healthy return on your 2013 investment.

When we look at the bigger economic picture, we do not see financial institutions collapsing or other deep recession signals, so we ascribe the market’s change to a shift from a heated to a more normal market. That being said, sellers need to acknowledge they are competing for buyers, and buyers are more discerning and disciplined in their approach. Pricing, presentation and negotiating – all areas where good agents bring value to the table – are critical for sellers to be able to achieve the best net value from their homes and condominiums.

Bainbridge Island Real Estate Jen Pells

Condominiums

The condominium market experienced an even more dramatic drop-off in the second half of the year. At the end of the first half, 2018’s condo sales surpassed 2017’s but by the end of the year had fallen behind in total numbers (126 sold in 2017, 109 in 2018). However, when we look more closely, the area of steepest decline was in the $800K-$1M price range (24 sales in 2017 and 10 sales in 2018). This could have as much to do with inventory as market shift. Two new on-island projects, The Roost and Residences at Pleasant Beach, both sold briskly in the second half of 2017 and were completely sold out by the first half of 2018. No other new projects came to the market in 2018, so it appears supply might have as much to do with the drop as demand. As with homes, the median price of condos had a healthy increase of 8.6% over 2017.

The prognosis for the Bainbridge condominium market is very positive. There are two buyer types who are especially drawn to condos: people needing more affordable residences and “downsizers.” In 2018, 42% of the condos sold (46 sales) were priced less than $500K compared to 17 homes sold for less than $500K. At the upper end of this segment of the market, the downsizers were the driving force in the over $800K sales and quality inventory was lacking in the second half of 2018.

Land

Land sales in 2018 were also down compared to 2017 (31 in 2018 versus 41 in 2017), but the median price increased a whopping 60% ($400K in 2018 versus $250K in 2017), although 58% of the sales were less than the median $400K. One has to be careful not to read too much into statistics when applied to such a small population, but it certainly indicates land values are healthy.

A Forward Focus

As we kick off 2019, we know it will be an interesting year. There is a lot of uncertainty out there and it is difficult to predict how it will affect our market. Still, the regional economic picture, which has a tremendous impact on our market, is healthy with a positive outlook. The bottom line: we anticipate a more “normal” market this year. Regardless of the market, our mission at Windermere is to strive to make sure all our clients, buyers and sellers both, will do as well as they possibly can in the market they find themselves in.

Happy New Year!

The 2019 market is starting to wake up after its short winter rest, which is always my cue to compose one of my favorite blog posts, the list of my top 10 homes on the island for 2018. Last year 398 homes sold on the island – down a bit from the busy 439 we saw sell in 2017, but up from 369 in 2016. 2018 was my best year yet in real estate, so it indeed felt busy in my world.

This is my 11th list (see all the lists here) and again, these are homes that resonated with me personally when I toured them last year.  I am not one to live in or love a cookie-cutter home, so charm and even quirkiness get my attention.  In 2018 we continued to see spec-built homes come onto our market.  As DR Horton sold out, two other neighborhoods took their place, including one by Quadrant who has entered into our Bainbridge Market for the first time.  For now, let’s take a tour around the island and through the selling season of last year.

 

#10 | Island Center Road NE

#10

Original List Price $710,000

Sale Price $720,000 (multiple offers)

Days on Market – 6

Date Sold 6/1/2018

Click here for more photos and the full listing detail.

For #10 we start mid-island on a beautiful piece of property on Island Center Road. This home and property were a fabulous package.  The home is cozy at just under 1600 square feet and colorful with warm wood and beautiful, practical built-ins. I loved the barn door too. High quality materials were used throughout the home, which overlooked a bucolic two-acre property with tucked off a main road.  I am a big fan of metal garden artwork and this property had a nice collection mixed in the gardens and fruit trees. The home also had a sweet guest space over the garage.  It was no surprise this well-priced home and property, all abloom in June, saw multiple offers.

 

#9 | Manitou Beach Drive NE

#9

Original List Price $825,000

Sale Price $865,000 (multiple offers)

Days on Market – 7

Date Sold 5/25/2018

Click here for more photos and the full listing detail.

For #9 we move east to a view home on Manitou Beach Drive. This is another cozy home, but with a completely different vibe. This older home built in 1920 and just under 1900 square feet was the cozy beach cottage many buyers were looking for last summer.  Off Murden Cove, this home has nice views of the water plus a charming yard and garden too.  Nice updates were done through the home over the years, but the original charm remained.  Many of the homes in the Murden Cove area have views, but are also walkable to the popular Rolling Bay hub, a nice combination that makes it a popular choice for buyers.  Again, I was not surprised to see this sweet cottage receive multiple offers last May.

 

#8 | Cherry Orchard Lane

#8

Original List Price $850,000

Sale Price $900,000

Days on Market –  2

Date Sold 3/7/2018

Click here for more photos and the full listing detail.

For #8 we stay mid-island and move a bit west to a modern home on a large lot on Cherry Orchard Lane. This home sold twice in one year, but the last sellers made some nice changes, including paint inside and out.  This is a rare larger, cleared,  flat lot, close-in to town. The property also connected to Strawberry Hill Park.  Custom-built, the home has a bit of a modern flair, an open floorplan and a main-floor master.  I really like Cherry Orchard Lane, as it is one of the first streets as you head out of town where you begin to see larger parcels like this one at over two acres.  Smaller homes (2,100 square feet) on large lots are also rare.  Built in 2010, this newer, custom-built home sold for $50K over asking the first weekend it was on the market.

 

#7 | Fernclff Avenue NE

#7

Original List Price $1,098,000

Sale Price $1,100,000

Days on Market – 6

Date Sold 3/8/2018

Click here for more photos and the full listing detail.

Staying central we move east again for #7 to this charming cedar-shingled home on Ferncliff Avenue. I listed this home last winter and this is such an easy home to live in and love.  My clients were so sad that they outgrew this home as the charm and high quality craftsmanship spilt out from each and every corner. Solid wood doors, box-beam ceilings, a clawfoot tub. This home is also close to the ferry, across the street from beach access and has peak-a-boo views of the Sound.  I fell for this kitchen, with a built-in breakfast booth, apron sink, large island and TWO pantries.  Like I said, this was a home that was easy to live in and love and hard for my clients to leave – although they indeed moved into a another very sweet home. This homes sold for above full price last March.

 

#6 | Tiffany Meadows Drive NE

#6

Original List Price $1,198,000

Sale Price $1,198,000

Days on Market – 83

Date Sold 5/22/2018

Click here for more photos and the full listing detail.

Mid-island is the theme for this list as we move closer into the Wing Point Neighborhood for #6. This is another cedar-shingled home, but of a completely different style.  This homes was designed by local architect Jim Cutler.  This three-level home has walls of windows and sits right on the Wing Point Golf Course.  I like how they used half walls to unify the spaces. The unique style and high-end finishes set this home apart from the more traditional homes in this neighborhood. I also loved that it appears to be floating above the golf course and neighboring pond and it is also tucked off the main road.  But what I loved the most were the  multiple decks around the house off the main living spaces – throughout the day you could enjoy eastern and western sun. This home sold for full price last May.

 

#5 | NE Setting Sun Lane

#5

Original List Price $1,498,000

Sale Price $1,550,000 (multiple offers)

Days on Market – 6

Date Sold 5/31/2018

Click here for more photos and the full listing detail.

Now for #5 we move north and west to the lovely home on Setting Sun Lane. This home was built by one of my favorite builders, Rick Debarros. I believe this was the last home Rick built on the island before he retired and moved out of state.  His construction was high quality, the finish choices are timeless and the floorplans he built were spot on for practicality with a nice balance between wide open spaces and separate rooms.  He understood the need for mud-rooms (especial in the PNW), large laundry rooms and bonus rooms.  The home sits on a large one-acre west-facing lot right across the street from popular Battlepoint Park.  This home resonated with many buyers last spring and saw multiple offers in May.

 

#4 | Edgecombe Place NE

#4

Original List Price $1,575,000

Sale Price $1,605,000

Days on Market – 3

Date Sold 6/1/2018

Click here for more photos and the full listing detail.

We quickly move back closer to town with this view home coming in at #4 on Edgecombe Lane. This home was a terrific package.  It was remodeled by Smallwood Construction in 2011 and very well done.  The home and property have an estate-like feel with a gorgeous front yard with views on the Sound and Seattle and a park-like lawn in the back yard.  Across the street, the neighborhood shares private beach access.  Inside the home were a nice balance of rooms with tall vaulted ceilings and smaller rooms with warm wood built-ins and a cozy feel.  Many view homes orient one direction, but the fabulous thing about this home was the yard and setting were striking all around the home.  One lucky buyer snapped this home up the first weekend with an over-asking offer.

 

#3 | NE Gordon Drive

#3

Original List Price $1,950,000

Sale Price $1,885,000

Days on Market – 46

Date Sold 11/30/2018

Click here for more photos and the full listing detail.

For #3 we move about as far north as you can go to Gordon Drive. This home is another wonderful package.  Waterfront, dock, acreage, plus a charming, modern home with fun hobby spaces.  This north-end beach house has a lot of what waterfront buyers are looking for.  Many waterfront homes are on small lots. The privacy here with a large enough lot to garden and have fruit trees is hard to find.  This waterfront home on 200 bulkheaded feet also has a dock.  Inside, I loved the impressive front door, all-glass entry hall, and exposed beams throughout.  The one-level home originally built in 1939 had been added onto nicely by the current, longtime owners.  Some lucky buyers have moved into a classic, impressive Bainbridge Package.

 

#2 | Fletcher Landing NE

#2

Original List Price $1,950,000

Sale Price $1,950,000

Days on Market – 8

Date Sold 8/17/2018

Click here for more photos and the full listing detail.

Bouncing back to mid-island again we find ourselves on Fletcher Landing for #2. Fletcher Landing is a bit of a hidden gem on the island.  Tucked in off the open water, the bay here is tranquil, easy water to live on and play on. I loved the mid-modern vibe of this house and the location on the bay sites it well for impressive Olympic Mountain Views.  Another home with a dock, and additional hobby/studio spaces.  The sleek, modern kitchen overlooks the water and the large, covered deck is fantastic to enjoy the outdoors all year round. The front court-yard gives the homes a special, private feel as you enter.  I was not surprised his home did not last long on the market, seeing a full-price offer the first week.

 

#1 | NE Country Club Road

#1

Original List Price $2,300,000

Sale Price $2,100,000

Days on Market – 17

Date Sold 12/10/2018

Click here for more photos and the full listing detail.

The south-end makes a rare appearance for #1 as we head into the gated community of Country Club Road for the coveted top spot. It is rare when one of the 18 homes comes on the market in the Seattle County Club Neighborhood on Bainbridge Island. So, when they do, most agents, including myself, make sure we go tour them. They are always a visual feast.  This home had never been on the market before and much of it was in original 1914 condition. This 6,200 square foot home has an amazing view due-south off Restoration Point.  Architect Carl Gould (founder of the Architecture School at the University of Washington) knew what he was doing when he sited this home to take advantage of southern sun, Rich Passage and Mt. Rainer views.  The home itself has amazing period details like a butler’s kitchen/pantry, massive amounts of clear grain fir trim, clawfoot tubs, and grand decks, both covered and uncovered, overlooking the impressive open waters and rustic beach down below.  Walking through the home this is certainly one where you wished the walls could talk. I am sure this home saw some superb summer parties in its day. This home, which requires county club approval, and currently has dues of $1,800 a month sold for $2.1M after 17 days on the market.

 

Below is a mapping of the homes on my list. We seemed to have very little activity on the south-end last year and much more central and north – my list seems to express that.

I consider it an honor and privledge to tour so many unique and special homes. To get a feel of the homes I personally enjoy touring and see all eleven of my annual lists in one place, click here.  Have a fun virtual tour of beautiful homes on our island.

   It will be interesting to see how the 2019 market unfolds. Here’s to more, charming and unique homes. I look forward to seeing you out there.

 

 

 

 

 

Bainbridge Island Homes for Sale - Jen Pells Real Estate

Checking the Thermometer

No, Chicken Little, the sky is not falling. It has just shifted from clouds skittering past to a more mellow and peaceful sky. Every day, we hear news about the cooling real estate market but it’s important to consider all the factors that go into those reports. Yes, our market has chilled slightly from its previously overheated state (although we never reached the same sizzle as the Seattle market) and has settled into what might be described as a strong normal market. The business section also contains reports of ongoing job growth in the Seattle area, especially in the well-paid tech industries. Concurrently, when Seattle’s transportation woes and other urban issues are taken into consideration, the demand for Bainbridge homes, especially for families, will likely continue for the foreseeable future.

Crunching the Numbers

On the whole, most indexes show data that support a steady market in the coming months. If we isolate the third quarter and look at sales, the number of homes sold only dropped 4.4% from 2017 (137 in 2017 and 131 in 2018). In that same period of time, the median price of homes sold actually went up from $875K to $912K – a 4.2% increase. If we compare the median price of homes sold during the third quarter, they are up 8.8% from the beginning of the year. Additionally, the Cumulative Days on Market (the average time it takes to sell a home) dropped in the third quarter of this year compared to 2017 (44 in 2018 vs. 47 in 2017). The inventory and pending numbers are where elements of the cooldown show themselves. Inventory is actually down in both total inventory and active (total less pending sales), which is contrary to what people are hearing. Pending sales (homes under contract) are weaker at 40 compared to 57 at the same time last year.

Of all the numbers we examine, this 29.8% drop is the one that most directly supports the slowdown assessment. That being said, when we look at all the data at once, we can conclude that the market is pretty darn healthy and strong. Maybe not as feverish as last year, but it’s still a great time to be selling or buying on Bainbridge Island.

Bainbridge Island Homes for Sale - Jen Pells Real Estate

Condominiums and LandBainbridge Island Homes for Sale - Jen Pells Real Estate

The condominium market has softened compared to 2017, with 73 units sold compared to last year’s 89. There seem to be two parts to the condo market: the affordable (less than $500K) and the higher end, which usually includes a good view. The affordable is actually up from last year, with 64 sold versus 45 in 2017. The drop in this segment’s higher end appears attributable to a lack of supply rather than a softness in the market.

Land is also lagging a bit behind 2017. We’ve had 24 sales so far this year compared to 29 in 2017. Buying land with the intention of building is not for the faint of heart these days. Good builders are busy and in short supply and construction prices are still rising. The new zoning rules have also added an element of uncertainty.

Taking Everything into Consideration

It is true that we’re not seeing as many multiple offers as we did last year. Prices have risen but not at the frenzied pace of last year (over 18% from the beginning of 2017 to the end of the 2018 third quarter). Our rental market has also calmed down. Business in our Kitsap County neighbors, Kingston and Poulsbo, is also feeling healthy and strong and they are also benefiting from Seattle’s growth. Buyers do not seem to be particularly concerned with rising interest rates (which, after all, are still quite low), which helps boost their confidence. As we enter the fourth quarter, there are many opportunities for both buyers and sellers. Sellers benefit from the lower inventory (which means less competition) and the typically slower pace of the end-of-the-year market makes sellers view serious buyers with more attention because there simply aren’t as many buyers shopping this time of year.

Bainbridge Island Homes for Sale - Jen Pells Real EstateStaying Nimble

Whenever the market shifts, it’s wise to ensure your strategies have adapted to it. As we tilt toward normalcy, there will be more competition for buyers that sellers need to accommodate. Presentation, realistic pricing and sound advice when offers do arrive are as important as ever. Skillful real estate brokers prove their value in helping both buyers and sellers match their approaches to the existing market. We here for you, wherever you are in your real estate journey.

All in all, life and real estate are good on the island we call home. We wish you health and happiness as we head into the holiday season.

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.

9175 Ferncliff Avenue NE is a quality constructed Craftsman home in the convenient Ferncliff Area of the island.  The home emulates the quintessential Bainbridge style and is anything but cookie-cutter.  Custom built by VanWinkle, this property offers a 3,367 square feet on a lovely, private, .47 acre lot tucked behind a mature laurel hedge.  Public beach access is across the street on Yaquina Avenue. Only 2.2 miles to the ferry this property offers elbow room from your neighbors, but incredible proximity to the ferry, Winslow, and schools.

Open House

Sunday, January 28th from 1pm to 4pm

Welcome to 9175 Ferncliff Avenue NE listed by Jen Pells of Windermere

Welcome to 9175 Ferncliff Avenue NE

This home sits on a large, private property, conveniently close to Winslow, the ferry and schools. The home is 3,367 square feet with three bedrooms, a family room, living room, home office and guest suite with full bathroom, all on a large .47 acre fenced lot.

Peek-a-boo Puget Sound and Seattle views from the front porch, living areas and master suite.

You can feel the warmth and quality as you walk into the home. Hardwood floors, fir trimmed windows, solid wood doors and box beam ceilings make for a grand first impression as you step into the living room.Thoughtful built-ins, custom lighting and large windows can be found throughout the home.

The kitchen is the heart of this home. Large and open with quality fir cabinetry, ample counter space on the butcher block island or granite counters, high-end Viking appliances, a breakfast booth, and a walk-in pantry (and a second pantry around the hall too).

The dining area, kitchen and family room in the home.

The upstairs master suite. Find a five piece master bath with claw foot tub and spacious walk in closet with fir shelving.

The charming master bath has classic tile, the claw foot tub, double sinks, a large walk-in closet and a private water closet.

The private guest suite/nanny suite is spacious, with its own sleeping room/bonus room, full bath and private stairs off the back hall. There are two staircases in the home.

The home is across the street from beach access. It is .2 miles away at the base of Yaquina Avenue.

Details about the home:

  • 3,367 square feet on private .47 acre lot
  • Classic Craftsman style home built by VanWinkle in 2007
  • 3 bedrooms and 3.5 baths with a full guest suite/nanny suite upstairs
  • Home office and half bathroom on the main floor
  • Living room and family room on the main floor
  • Large eat-in kitchen with Viking appliance package and breakfast booth
  • Spacious master suite with a five piece bath and classic clawfoot tub
  • Ample storage with walk-in master closet and two pantries in the kitchen
  • Hardwood flooring on the main floor
  • Two staircases
  • Fenced backyard
  • Oversized two car garage
  • .2 miles to public beach access at the base of Yaquina Avenue
  • 2.2 miles to the Seattle Ferry
  • Peek-a-boo Sound/Seattle views
  • Offered at $1,098,000

Charming Craftsman home on a private in-town lot close to ferries, Winslow and public beach access – at the base of Yaquina Avenue. Peek-a-boo Sound and Seattle views. Chef’s kitchen with Viking appliances package, fir cabinetry, cozy breakfast nook and granite counters. Three bedrooms plus an additional guest suite (or nanny quarters) with full bathroom plus bonus room. Downstairs has a home office and family room. Quality craftsmanship with box beam ceilings, hardwood floors and custom lighting. A rare in-town home that exudes warmth and style.

Click here to see the full Windermere listing details.

Click here to visit this home’s dedicated website.

On January 26, 2018, in Home Tours, Listing, Open Houses, by

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