2017 1st Quarter Newsletter

Winter Dormancy

In many ways, the first quarter of 2017 reflected the past two years of the Bainbridge Island real estate market and the markets of most of the neighborhoods around us. Seasonably low inventories limit buyers’ choices early in every year. Meanwhile, inclement weather tends to dampen the enthusiasm of sellers getting homes ready as well as buyers who would rather stay in than venture out to look at properties. Finally, there’s a perception that the market doesn’t really “begin” until spring. These factors all conspire year after year to make the first quarter the quietest.

A Snapshot of Activity

Looking back to 2016, there were 72 residential transactions in the first quarter, compared to 129 in the second quarter, 156 in the third and even 117 in the fourth (also perceived as a slow quarter). So we were prepared for the “slow time” this year. We hoped for more inventory because we knew there was demand. As it turned out, in spite of the weather, we got a little bit of what we wanted. We had 83 residential home and condominium sales in the first quarter of 2017, up 15% from last year’s 72. It should not be a surprise that our active inventory was up 29% from last year when measured on February 2nd. In a sellers’ market, inventory is the fuel that pushes the machine (as opposed to buyers being the fuel in a market they control). But there’s a footnote to these numbers: the condominium market had 27 sales – the best first quarter we’ve had since 2007 – and condominium sales were up 68.8% over last year’s first quarter figures. If we set aside the increase in condominium sales, our first quarter sales were essentially flat.

Price Considerations

As home prices continue to rise, condominiums are becoming an important option for people who are being priced out of single family homes and those who are downsizing. In the first quarter, there were 13 homes sold for less than $600,000; there were 14 condominiums sold in the same price range. The median price of condominiums was $517,000 and of homes was $755,000. Condominiums represented 37.5% of the residences sold in the first quarter, compared to 22% last year. This is also not lost on developers, which is evident when you look at the new construction both underway and in the pipeline, where condominium products are strongly represented.

Perception versus Reality

The media has painted a pretty rosy picture of our market for sellers: just put up a for-sale sign, set any price you want and wait for multiple offers to roll in! In reality, while a strong market can make it easier to sell a home, there are certain goals that need to be in a seller’s mind regardless of the market.

  • The first is to sell the home within an acceptable timeframe. On the chart below, you’ll see the “active” inventory is higher than it’s been since 2013. Also, even if you have an interested buyer, it doesn’t mean that buyer will end up purchasing the home. This quarter, there were 16 “failed sales” or homes that fell out of contract, down from 37 last year. Sales fail for all sorts of reasons: buyer’s remorse, which can come from price; realization of property condition; and reality checks are the most common. Getting the home sold in an acceptable timeframe is important to most sellers. In this past quarter, the average days on market was 71. Some homes sell right away, but they are usually the exception.
  • The second goal is to maximize the net yield to the seller. Condition, disclosures and presentation all affect buyer perception and price consideration. Buyers are smarter than ever and they are conducting their own market research with their Realtors. Buyers need inventory to choose from. They will not buy home at any price, and their price ceilings are dictated by their perception of value. There are some multiple offers, but only 29% of homes sold in the first quarter went for over asking price (which may be fewer than some people would think) and the percentage of the overage was a scant 3%. The boom of 2007 was not that long ago and most buyers (and their agents) clearly remember the risks of overpaying.

Closing Thoughts

We are in a sellers’ market with multiple offers and prices are rising but our market is smaller, less active and has a smaller buyer pool than Seattle. To gain maximum benefit from this market, sellers should keep this in mind. It’s important to consider the buyer’s perspective, where there is another labyrinth to negotiate. About 40% of Bainbridge sellers end up on the other side of the table when they later become Bainbridge buyers, so they eventually experience the flip side of our market. Working with an experienced professional will help you achieve the best result and understand the many nuances, of the Bainbridge real estate market. So let’s dive together into this busy season. It’s going to be an exciting ride.

Bainbridge Island Single Family Homes Sold January 1 through March 31

 

Posted on May 8, 2017 at 7:39 pm
Jackie Syvertsen | Category: Bainbridge Island Real Estate, Bainbridge Island Real Estate Statistics, Newsletter | Tagged , , , , , , , ,

2016 First Half Newsletter

MEMORIES OF YEARS PAST
A History Lesson

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.

Inventory

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.  

Prices

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.

Condominiums and Land

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.

Moving Forward

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 marketplace 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, we are opening a satellite office on Olympic Drive and Winslow Way. There we’ll 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 soon, so please stop by.

Windermere In The News

To say that Windermere has a lot of Seahawks fans would be an understatement. That’s why we are so excited to announce today that we are now the “Official Real Estate Company of the Seattle Seahawks”!

At the center of this partnership with the Seahawks is a new #tacklehomelessness campaign in which the Windermere Foundation 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. Since 1989, the Windermere Foundation has donated over $30 million to non-profits that support low-income and homeless families, so partnering with YouthCare and the Seahawks on the#tacklehomelessness campaign is a perfect fit for us.

“We are proud to partner with Windermere, an iconic and locally-based company with a deep commitment to this community,” said Seahawks Vice President of Corporate Partnerships Amy Sprangers. “Windermere’s brand and values align perfectly with our commitment to this region. It is wonderful that this partnership will make a positive impact on homeless youth throughout the Seattle area.”

GO HAWKS!

Seahawks Sponsorship Logo F

Posted on August 23, 2016 at 10:46 pm
Jackie Syvertsen | Category: Bainbridge Island Real Estate, Bainbridge Island Real Estate Statistics, Newsletter, Uncategorized | Tagged , , , , , , , , ,

2016 1st Quarter Newsletter

Jackie98110 dot com

 

 

 

 

 

 

 

 

 

 

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 and 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 of inventory has increased competition and bumped median prices up more than 9%. The average, which is more a function of the price ranges where homes closed, was up more than 18%.  The median cumulative days on market dropped from 26 in 2015 to 20 in 2016.  To put this in perspective, the cumulative days on market in 2012 was 146 days.

The Story on Condominiums and 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. An agent will know whether a price is in line or whether the seller is being aggressive. 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. Ask your Realtor what it means to omit certain forms, how to read building inspection reports and 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. 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 interest.  You have to know which of them will have the greatest possibility of actually achieving a closed transaction. It is surprising how many transactions fall apart in this market. Negotiating inspections, Appraisals, Sellers’ liability; what do all those forms mean and what are your responsibilities? There are many steps between deciding to sell and achieving your goals. 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.

 

Jackie_Syvertsen

Posted on April 27, 2016 at 10:46 pm
Jackie Syvertsen | Category: Bainbridge Island Real Estate, Bainbridge Island Real Estate Statistics, Newsletter | Tagged , , , , , , , ,

2015 3rd Quarter Newsletter

Posted on November 3, 2015 at 10:01 pm
Jackie Syvertsen | Category: Bainbridge Island Real Estate, Bainbridge Island Real Estate Statistics, Newsletter | Tagged , , , , , , , ,

Bainbridge Island Real Estate Sales in Review

RESIDENTIAL HOME SALES IN REVIEW

YEAR                  Avg. Sale Price            Total # of Sales           Avg. Days on Market

2003                    $481,758                           454                                      101

2004                    $551,462                           468                                      92

2005                    $670,004                           442                                      91

2006                    $752,154                           349                                      87

2007                    $820,607                           317                                      97

2008                    $749,970                           187                                      108

2009                    $662,668                           212                                      139

2010                    $639,169                           255                                      102

2011                    $581,855                           257                                      113

2012                    $636,705                           384                                      101

2013                    $599,116                           414                                      75

2014                    $706,275                           401                                      65

CONDOMINIUM SALES IN REVIEW

YEAR                  Avg. Sale Price            Total # of Sales           Avg. Days on Market

2003                    $304,874                           73                                        165

2004                    $302,123                           157                                      185

2005                    $381,143                           74                                        55

2006                    $359,040                           150                                      89

2007                    $459,756                           129                                      218

2008                    $458,383                           42                                        107

2009                    $366,369                           53                                        176

2010                    $326,174                           53                                        214

2011                    $289,338                           67                                        212

2012                    $296,702                           80                                        147

2013                    $328,139                           93                                        117

2014                    $384,416                           100                                      60

LAND SALES IN REVIEW

YEAR                 Avg. Sale Price            Total # of Sales           Avg. Days on Market

2003                    $211,651                           106                                      233

2004                    $187,045                           104                                      254

2005                    $292,644                           87                                        216

2006                    $460,802                           53                                        183

2007                    $378,295                           30                                        164

2008                    $421,728                           15                                        124

2009                    $433,500                           11                                        291

2010                    $172,625                           24                                        175

2011                    $233,405                           20                                        182

2012                    $216,672                           32                                        159

2013                    $197,453                           52                                        315

2014                    $249,267                           43                                        209         

 

So you’ve begun thinking about selling your house and you figure: Let’s wait until spring or early summer before listing. The yard will look its best and potential buyers will be out in force.  Recent research studies show home listing prices, sales price and time-on-market data from January 2010 through October 2014, concluded that if you want to sell for more than your asking price, listing in December through March gives you a better chance on average than if you list June through November.  If your goal is to sell relatively quickly, February is historically the best month to list, with an average of 66 percent of homes listed then selling within 90 days, according to national averages, including cold weather cities like Boston and Chicago.

Researchers are quick to note that the advantages of listing in winter compared with other seasons are not huge. But the fact that winter produces at least competitive or better results by some measures should encourage potential sellers to get into the game sooner rather than later. Bottom line: Real estate does not hibernate. Other factors to consider:   Only 63 Homes, 8 Condominiums and 53 land parcels currently For Sale on Bainbridge Island. Less Inventory = Less Competition for Sellers who list prior to spring. This is surprisingly an advantageous time to list, shop and buy Real Estate. Buyers shopping at this time of year are Serious Buyers. More Corporate Transfers at this time of year.  Buyers have more time to surf the web for homes.

What are your real estate goals for 2015?

Call me for a Current Market Analysis and I will provide you with an honest, fact-based report of the financial value of your home. 

Posted on January 6, 2015 at 11:10 pm
Jackie Syvertsen | Category: Bainbridge Island Real Estate Statistics | Tagged , , , , , , , ,