Midway through a good year!
A Bustling Springtime Even though the first quarter of 2017 didn’t start that slowly, it sure felt like it did. But the second quarter was a different story. We were flat-out busy between April and June. There were 141 home sales on Bainbridge during Q2, which was a 31.8% increase over last year and a 306.5% increase over 2009 (for those of you who remember those days). The only second quarter to get even close in the past decade was 2013, when 125 homes sold.
The Mechanics of Price Still, a curious piece of data accompanies all those sales: the median price of homes sold in the first half of 2017 increased only 3.6% over the comparable period last year. That is the slowest growth of prices since 2012-2013 (when it actually went down). Here’s why this is significant: even though there is healthy demand, buyers are showing restraint and patience. The basics of presentation, pricing and negotiating (which good agents bring to the table) still prevail. You cannot just take a house in any condition, throw a price at it and expect success. This is one of the factors that differentiate Bainbridge from the Seattle market. The flip side is that a major source of new buyers on Bainbridge are frustrated Seattle buyers who are tired of dealing with the city’s growth and market conditions. Our office was involved in 96 Bainbridge transactions during the first six months of this year, 30 of which (or 31.3%) involved Seattle and Eastside buyers. When we expand the circle, we see that out-of-state and Seattle buyers accounted for 51% of our transaction in the first six months.
Goings-on with Condominiums and Land Our condominium marketplace has had a booming first half of the year. Sales climbed from 38 in 2016 to 50 in 2017 (almost a 32% increase!) and the median price rose from $404,500 to $499,250 (up 23.4%), finally surpassing 2007’s previous record of $468,000. It took a decade for these numbers to return, and we’re happy to welcome them back.
Land is now the only remaining soft spot in our market. Sales were down 39% from last year but median prices rose 14%. We attribute this mostly to no new large parcel sales and the possibility that people are intimidated by the new construction process. The planning and designing phases of any new project are exciting, but then come permitting, the search for contractors and all the costs. With quite a bit of new construction coming on line, people seem to be waiting to see what someone else has built.
A Construction Zone There is quite a bit of new construction on Bainbridge, which means the development topic is getting a lot of attention among locals. Bainbridge Island is such a great place to live that the pressure to grow comes naturally. History tells us that restricting growth will push up prices and eventually affect the market’s diversity. However, growth is a concern to existing residents who fear it will spoil what makes the community desirable in the first place. So the community stance has been to try to limit development to specific pockets of the island as a way of preserving rural character in general. When we map the major new construction projects, we see that this goal has largely been met:
Winslow: Grow Village, Wyatt Way (DA Horton), Weaver, Bainbridge Landing, Finch, Freestone Landmark (Wing Point), Freestone Ferryview (Wing Point)
Lynwood Center: The Roost, Pleasant Beach
Rolling Bay: Sunrise Square
These projects are all within designated growth areas. Indeed, the only multi-home development out of the growth centers is the 10-home project going in at Torvanger/Sunrise Drive, and that’s being built on a 12-acre parcel.
Favorable Conditions How long will this pressurized market last? Anyone who experienced the 2007 market, which was also quite active just before it changed dramatically, is reluctant to make long-term predictions. However, there are some key differences between 2017 and 2007. Today, the lending and banking environments are far healthier. Also, job growth is the primary fuel of real estate growth. And our local economy is far stronger now than then. Windermere Chief Economist Matthew Gardner had this to say about regional job growth in his Q1 2017 report:
Washington State continues to add jobs at a steady rate. (We) continue to see unemployment fall and I anticipate that we will see this rate drop further as we move through the year. In all, the economy continues to perform at or above average levels and 2017 will be another growth year.
Ever the Rock Yes we have growth and new construction, but there is diversity in the construction (family homes, homes ideal for downsizers, and homes close to services). When you drive around the island, you find most of it untouched by new developments. We also have the best parks, hikes, beaches, bays and communities in Puget Sound. Our region’s star is still rising as a great place to live and work and we are one of the premier neighborhoods in it. Growth pressure will continue; it’s up to all of us to work together to address it in ways that honor the past, present and future of this great place.
The Same Old Tune Even as the birds of springtime sing their new songs of the season, we must hit repeat as we report – once again –on our local market’s low inventory. A lack of available homes continues to dictate what’s happening in Bainbridge Island real estate. On April 1st, there were only 47 homes and 5 condominiums available for sale on the island. Within the overall market, certain price points have been more pinched than others (which is a snapshot in time and will change as the year goes on). For example, if you were looking for a home in the $600K to $800K range, you had only 5 houses to choose from and zero condominiums.
How Inventory Affects Sales & Prices This extremely limited inventory helped drive home sales down more than 20% from last year. There are plenty of buyers out there; there are just not enough properties on the market to sell. The scarcity increased competition and bumped median prices up more than 9% (and the average, which is more a function of the price ranges where homes closed, was u p more than 18%!). The median cumulative days on the market (CDOM) dropped from 26 in 2015 to 20 in 2016. To put this in perspecti ve, the CDOM in 2012, which was a good year, was 146 days.
The Story on Condominiums & Land The condominium market is also suffering from lack of inventory. Last year at the beginning of April, there were 16 condominiums available compared to this year’s 5 (both of which lie in sharp contrast to 2012, when there were 45 available). Consequently, sales dropped from 19 to 16, but the median price rose 23% to $430K. Land, on the other hand, experienced a 30% increase in sales to 13 parcels this quarter with a 26.8% increase in the median price to $225K.
The View From Inside One might assume that a market like this, with rising prices and inventory competition, makes our jobs easier. The reality is that there are some basic principles, goals and strategies that any good real estate professional seeks to embrace, all of which must adapt to an ever-changing market. Regardless of the climate, we want our clients to achieve the best possible outcomes – both at closing and in the future. This is sometimes easier said than done, especially when competition is fierce and time is of the essence. Given the complexities of the Bainbridge market, where most homes and locations are unlike any others, things can get even more challenging. It is not like buying or selling in a large subdivision where a product like Zillow has some merit. Here, each house has strengths and weaknesses and the success of a sale can pivot on those subtle nuances.
If You’re a Buyer For buyers in this market, supply is tight and prices are rising. You
almost have to assume you will be competing with others when you find the house you
would like to make your home. Is the price fair? How high should you go? The specter of 2006 and 2007 should be in the back of your mind, as the concept of paying “whatever it takes” came back to bite many homebuyers. An agent brings knowledge of the current market, the choices it offers, what might be coming and how an individual house fits into the bigger picture – including the history of the neighborhood and often of the house itself. An agent will know whether a price is in line or whether the seller is beingaggressive. (And, when there are limited comparable properties, this expertise becomes extremely important.) No one wants to hear, “You paid how much for your house?!”
In multiple offer situations, there are strategies to employ. You need to line up your resources to be “the best you can be.” Multiple offers often require that decisions be made quickly, so being prepared makes you a stronger buyer and one less likely to be disappointed later. If you are not a cash buyer, there are things you can do to compete with those who are. Get comfortable with the stack of forms you’ll be asked to sign. Understand what it means to omit certain forms. What about inspections? Title reports? Learn how to spot red flags that make certain houses less expensive. Being a buyer in this market can be difficult, frustrating and even scary. A good agent can help you navigate the winding road to achieve the best results and avoid mistakes.
If You’re a Seller Sellers may think they have it easier, but the reality is that a seller’s quest is the same in an ascending market as in a descending one. The two primary goals for sellers are to get the home sold in the timeframe desired and to maximize net proceeds. Buyers will be more attracted to, and will ultimately pay more for, a house that is optimized to appeal to a buyer and priced in a manner that a buyer feels is reasonable in the current market. Here again, knowing the current market, as well as past and future markets and how a particular home fits into all of them, is essential in achieving the seller’s ultimate goals. But the work is just beginning when buyers first express inter-est. You have to know which of them will have the greatest possibility of actually achieving a closed transaction. (It is surprising how many deals fall apart in this market.) Negotiating inspections? Appraisals? Seller’s liability? What do all those forms mean and what are your responsibilities? There are many steps between pondering selling and achieving your goals, and the reality is that sellers don’t always get everything they hope to get out of a sale – even in a sellers’ market. But an experienced agent will help you prepare, present and respond so you can get the most out of any market.
The Constant Real estate markets fluctuate all the time, sometimes favoring buyers and sometimes favoring sellers. This is simply the nature of the business. But in the midst of all those ups and downs, one thing remains consistent: the beauty and livability of Bainbridge Island. At Windermere Bainbridge, we celebrate our island community and all it has to offer.
Life on the south end of Bainbridge Island has gotten a whole lot cooler! Thanks to Joe at Island Cool every Tuesday evening Tracie Marsh will be playing through the summer! Bring the kids and treat em to frozen yogurt – there’s no cover and all ages are welcome! Playing from 6:30-8:30pm; they'll be playing a mix of jazz pop and soul.
Enjoy watching the little ones play in the famous mouse fountain, visit with neighbors, grab a glass of wine at Suzanne Maurice Wine Bar, wander through the Marketplace, grab a slice at The Treehouse, a buttery coissant at Pane d'Amore, a juicy burger at Hammy's Burgers, join friends for dinner at the Beach House, whatever you choose to do, and there's A LOT to choose from, a great time will be had for sure! Sit back and enjoy the vibe at Pleasant Beach Village!
South end living at it's best!
Had such a lovely day at our local Farmers Market Saturday! Maybe it was the temperature, the sunny day, the vibrant colors, the community spirit or all of it combined, but it was FANTASTIC! We purchased fresh green kale, sweet carrots and vibrant yellow cauliflower from Farmhouse Organics. Sauntered over to Gloh and had Hilary whip us up the most incredible smoothie of superfoods, coconut water, fresh raspberries and dates!
But wait, there was more! We had to taste the wonderful Botanical Kombucha from iggy's as well as their famous Raw-Fermented Kraut's…simply delicious and they are bar none the nicest, most hospitable bunch of young adults! Then it was off to nibble on the best goat cheese I've ever tasted in my life from Mystery Bay Farm. I had to buy the honey flavored and the thyme and white pepper! Simply delicious! We sat in the warmth of the sun listening to Ranger and the Re-arrangers playing wonderful music and just taking it all in.
We ran into friends and neighbors, watched dogs play, watched people play for that matter and simply enjoyed a perfect day! We left feeling truly blessed that we have such a vibrant, successful, farmers market right here on our beautiful island!
There's still plenty of time to go and with this great weather…what are you waiting for!
2014 Summer Market
April 12 through November 15
Hours: 9am – 1pm
Town Square / City Hall
Always a good time to be had at Bainbridge Islands annual Rotary Auction! Really its the social event of the season! A great way to catch up with friends and neighbors while getting great deals on everything from balls to garden gnomes.
A great place to update your recreational supplies! Every Islander should experience this phenomenon known as the "Auction" at least once. The people watching alone, is worth it! No lie, I've witnessed mothers directing small children with extensive play diagrams of "goods to get" that would impress any professional coach.
In the end A LOT of money is raised and the volunteer organization is impressive. These Rotarians are dedicated!
Waiting For Inventory To Blossom
The Heart of the Matter
Last year’s 1st Quarter in Review highlighted the increase in the number of homes sold during that quarter over the same period in the previous year. We probably could have made a similar claim this year because the demand was there, but the number of homes sold actually dropped this year compared to last. (We sold 69 homes in the first quarter of 2014 versus 80 in 2013 – a 14% drop). The reason? Low inventory. You have probably been hearing this (at least if you have been listening to us), so we thought we would take this opportunity to explore it in a bit more detail, as inventory numbers have been defining our market in recent quarters.
The Power of Buyers
Buyers were precious commodities in 2008, ‘09, ‘10 and even 2011. The growing pool of buyers was concentrated at both ends of the market during 2012, leaving the middle of the market languishing. This improved in 2013, creating a more balanced and, for lack of a better word, healthy market. As “normalcy” continued to assert itself after our recession, the pool of buyers continued to grow but the number of homes coming on the market did not grow along with it. Buyers today are smart, well informed and pretty disciplined in going after (which sometimes means waiting for) what they want. They are willing to rent or stay where they are until the type of home they want comes onto the market. When they see it they move – quickly. There have been instances where we get five new listings in a week and four of those five are sold two weeks later. The problem: we would normally see ten new listings in a typical week, so the competition among those motivated buyers is fiercer than usual.
If you look at the bottom line of the stats, you see the “available” inventory. These are our active listings; the buyers’ cu rrent choices. Keep in mind this is the total number available from $0 to $10,000,000 and includes “pre-sales” – homes not even built yet! With a mere 73 available listings over all price ranges, buyers do not have many choices. Even at the market peak of 2006, there were 93 homes available in the first quarter (27% more than today).
Chickens, Eggs and Pricing
Sellers continue to play a crucial role when it comes to inventory, because once they sell they enter the buyer pool and find themselves facing the same limited options as all other buyers. We hear clients ask over and over again, “If I sell, where will I go?” This so-called “chicken and egg” phenomenon is real. Good real estate agents have strategies to mitigate this problem (for example, this is a good market for contingent sales), but it is a stumbling block for many. Also, many people want to downsize and there simply aren’t many homes on the island that meet the requirements of people looking for homes they can live in through some of the transitions they will be facing in the foreseeable future. So pricing strategies are as important as ever. Prices are recovering rapidly from their recession-era lows, butare still far from the peaks we saw in 2006 and 2007 (and even into 2008). People who bought Bainbridge properties between 2005 and 2008 may very well still be upside down. If they aggressively financed their purchases, taking a paper loss may not even be an option as they may be “short” (with debt that exceeds current value). Other owners are simply waiting for the prices, and their equity, to go back up.
Time Will Help
As we’ve seen with most market eras, time will correct many of these challenges. Prices are going up at a healthy pace and will lure more sellers back to the market. More builders are re-entering the market and some already have mature buyers in mind. The risks, however, are still real. The interest rates may go up more (they are already 1-1.5% higher than their lowest levels) and rising prices may begin to shut certain buyers out. One of the undeniable benefits of our real estate correction was that Bainbridge became affordable to families once again; rising prices may gradually force them back out. It is a very interesting, complicated and exciting time, depending on where one is in the market.
Condominiums and Land
The condominium market is also very interesting right now. There were 21 sales in the first quarter, up 40% from last year’s 15. Of those 21, 17 were below $500,000 and four were over $1M with nothing in between. Land sales are up 30% from last year and developers are actively looking for potential sites.
Beyond the Island
What’s going on in our neighboring markets? As our market trends usually lag behind Seattle’s, North Kitsap traditionally lags behind us. We’re pleased to report that North Kitsap had a strong first quarter, with sales up 12.5%. Their average price was positive although me-dian price was down 3.5% (2014 first quarter median price was $262,750 versus the 2013 median price of $271,900). That being said, they are currently experiencing a predominately “seller’s market,” which will help bring price points up. So things are getting exciting and looking encouraging throughout the region.
Being a third generation islander, I love to go to the Bainbridge High School Homecoming every year. This year did not disappoint! First off, the weather was FANTASTIC…there is nothing better than walking to good old BHS in the dark not wearing a jacket! The blue and gold was prominent everywhere, from painted faces (and chests), to colored hair and attire. There was some serious Spartan pride present! It's always fun to see classmates and teachers from the past, burgers being flipped, neighbors and kids growing up at these games. I always enjoy seeing who's on the Homecoming court, who gets crowned King and Queen and of course the cheerleaders doing there annual dance. Our team even won the game!
The teaching staff, along with local police, were on high alert with rumors of streakers…however, that did not occur. I have to believe even the most courageous youth running buck naked across the field would think twice about his or her athletic ability whilst being chased by one of their own teachers or even worse a police man or woman. It was rather funny to see all the teachers wearing sneakers…just in case.
Ahhh good times in a small town!
Welcome to Beautiful Bainbridge Island!
This video really captures the essence of living here, the attractions and the quality of the life we live. As a broker, I continually share with people the feeling a commuter gets when leaving the city, Seattle, and heading home. It really is an escape. What a treat to sit back and let someone else drive, no traffic, while you chat with friends, check email, knit, enjoy a cup of chowder or glass of wine, take a power nap or just enjoy the view, while heading home.
Living on an island is such a wonderful way of life, but living on Bainbridge Island is a lifestyle that you will treasure!
I had the pleasure of dining at Hitchcock in Winslow the other night for my birthday. This is a newer restaurant in our town that is “Farm to Table”. Meaning, they use all local veggies, seafood and meat and try to use as much of the product as they can, not just parts. I found the atmosphere to be very much like a higher end restaurant in NY or California. Warm and intimate with candlelit tables made it very comfortable and enjoyable, even romantic. Because I am not a meat eater, but do like seafood, I chose to ask the chef, Brenden McGill, to whip me up something special. By the way, this is an option on the menu and you get to name your price. Boy did he deliver!
First course looked and tasted amazing! Almost too pretty to eat, all local. Very enticing presentation of chanterelle mushrooms, pickled squash and woodsy pumpkin seeds. A wonderful cacophony of fall in a bite! Loved it!!
2nd course: Wild smoked steel head w/ purple potato salad and Hitchcock special sauce of creme fresh, capers and ?…Delicious!
Next up, Sable fish (black cod). Like butta in your mouth with a bit of ginger to cleanse your pallet. Dean had braised beef short ribs…cooked to perfection balanced with phenomenal Au Gratin Potatoes and drizzled with special Hitchcock sauce. Wow! Almost speechless…but wait there was more!
Ahhh dessert! Always a sucker for chocolate I chose the chocolate mousse. Dean opted for apple crisp. I’m a bit of a chocolate connoisseur and wished I got Dean’s apple crisp. The mousse was a little chalky for my pallet. Rats!
All in all my experience at Hitchcock’s gets a big thumbs way up! A must on my list! Happy Birthday to me and I did it LOCAL!!! The best news is that I spoke to the chef during our meal and it looks like he’s interested in adding to my “ShanPak” marketing campaign coming out in November. So look for his coupon and treat yourself to a night out, LOCAL style!
If you’re not on my mailing list and would like to be, simply email me at Shannon@Windermere.com and I’ll add you to my database.
Oh, I love the Fall! In fact, I love everything about this season. The colors, the crispness in the air, walks in crunchy leaves and of course, the imagination and excitement of! There is no better place to be than this season.
To me, October is the kick off to the holidays. I like to decorate my house on October 1st. It just puts me in a great holiday mood! My family knows that I love this time of year. They know that it’s time for spooky movies, costumes, butternut squash soup,and a great glass of . There is so much excitement and so much to do on the Island this time of year.
Just take a drive and look at the trees changing color. I especially enjoy driving past the sunflower field on Weaver Road, or along , which is just about to burst with brilliant gold, orange and red colors. Lastly, we like to get our annual pumpkins at Suyematsu Farms on Day Road.to see the maples ablaze in red. Of course there’s always the annual “Pumpkin Walk”, which is a must see (October 16,17). It’s also a great place to catch up with a neighbor you haven’t seen in a while over a hot cup of cocoa or cider. Don’t miss
The pumpkins are a plenty with all shapes and sizes with great photo opportunities around every corner. Even though my kids are getting older, they still enjoy this annual tradition. Come October 31st you’ll be able to watch all sorts of ghosts, goblins, princesses, and pirates roaming the streets of Winslow as the whole town greets “” with candy a plenty. Later, you can find the older “Trick or Treaters” flooding the neighborhoods filling their bags to the brim! Great ones to hit are Northtown Woods, , Wing Point, Stetson Ridge and of course Commodore Lane. Even if you feel you are too old to join this tradition, never fear; the people watching is just as entertaining!
It’s also time to start buying locally…holidays are just around the corner. Get a head start and walk through Winslow with a latte in hand from one of our many fine coffee/bakery establishments. Evenis more fun this month, as many of our merchants decorate wonderfully in celebration of Autumn and Halloween. Put a scarf on and get out there, you’ll be glad you did!