A WARM REAL ESTATE CLIMATE
Summer has come to Bainbridge Island, and with it our traditional celebratory activities. We had an energetic Third of July street dance, a festive Fourth of July parade, and a successful Rotary Auction that grossed more than $600,000.
When we move our attention to local real estate statistics, everything appears to be equally sunny. Our median price is up 12.5%, home sales over $1,000,000 are up almost 28%, and condominium sales are up 36%! Still, if you talk to the experienced agents, they are detecting a shift. Let’s explore all the reasons why.
BUYERS BEHIND THE WHEEL
We talk all the time about buyers’ markets and sellers’ markets. But it’s really the buyers who drive any market. Even in an ascending sellers’ market, buyers (or lack of) create the excess demand over supply.
Bainbridge is blessed with a sophisticated and knowledgeable buyer pool. They are well educated and disciplined. These days, they’re also beginning to be more cautious. Maybe that’s due to world economics, a possible interest rate hike, or a general assumption that we’ve been on this run for more than a couple of years and we must be close to the top. You might ask, then, why are our statistics are so positive? There are several factors at work; signs that the market is not as heated as last year and is stabilizing. Here are a few specifics:
- Inventory, something we’ve lacked for a while, is creeping up.
- More price reductions and fewer multiple offers, with more buyers saying, “Let’s just wait and see what happens.”
- The number of homes under contract is down 17.3% from last year and hasn’t bounced back in the first part of July.
THE BIGGER PICTURE
We are hearing of a cooling in other markets, both to the east and the west. This is not a cause for great concern, as our market is dynamic, and this sort of shift requires adjustments in strategy rather than extreme actions. Knowledgeable advice will help both buyers and sellers negotiate the changes and still achieve realistic goals.
Speaking of the vitality of the market, statistical charts show vivid changes. In the first half of 2012, 48 homes sold in the 0-$400K price range. By 2014, that number was halved to 24 and has plunged all the way to 4 this year. These homes didn’t disappear; they just moved up into another price range. Right now, there is only one home for sale for less than $400,000 on Bainbridge. In 2014, 78 homes sold for less than $600K, while this year that number is only 19. Here is what’s happening at the other end of the pricing spectrum: In 2014, only 31 homes sold in the $800K-$1.5M range and this year there were 101 sales in the same price range. So as our market stabilizes, we must acknowledge that it has appreciated dramatically.
A BUSY CONDOMINIUM SEGMENT
With 62 sales in the first half of this year, you’d have to go back to 2007 to find a more active January-June period. The median was up 13.6% to $468K; matching the all-time median condominium price set in 2007. The condominium market has lagged the single-family residence market in price recovery from the peaks set in 2007, but the market has shown steady strength in the past year and a half. The condominium market benefits by offering residence on Bainbridge for less than most homes. It’s also shown an active upper end as people have downsized; which has been driven by success in the upper end of the house market. This success has happened despite low inventory.
The median price of land sales for the first six months also finally matched this segment’s 2007 peak. In 2007, the median was $406K and in 2018 it was $400K. As with condominiums, it has been a long road back to our previous highs, but they have arrived. The volume of 22 sales exceeded 2007’s 18 sales in the first six months but fell shy of 2015’s peak of 33 sales through June.
A POSITIVE TILT
All in all, we are giving our first six months of 2018 a very high grade. We detect some stabilization and cooling off in the home market, but Windermere is prepared to employ our strategies to guide both buyers and sellers toward their goals – regardless of shifts taking place.
Considering that New Year’s is a pretty hot-ticket holiday, it’d behoove you to let your friends know sooner rather than later that you’ll be hosting a party at your place. Paperless Post is a good alternative for those who don’t want to track down friends’ addresses, go out to buy a roll of stamps, or leave the house. For those on a budget, there are several free invitation designs to choose from.
Hire a carpool so no one has to drive home. This is best done by using a traditional car service that can be scheduled for pick up and home delivery. Other ride share companies like Uber and Lyft offer similar services but they cannot be reserved and on a busy night you might find your friends coming in late and leaving far later than desired.
For a refreshing alternative to Champagne, try Prosecco. For nonalcoholic selection try Twelve, a fizzy blend of fruit and herbal tea. It’s delicious and certainly more elegant than sparkling cider. Pellegrino and Perrier are also very nice to keep people happy and hydrated.
Don’t let people get hungry! Make it easy on yourself and your wallet. Get some fabulous, frozen pre-made appetizers and keep them rolling from the oven. Cheese and cracker, charcuterie and veggie platters that require no cooking and can be made ahead of time are always crowd pleasers. These can even be purchased from your local deli if time is more important than slicing and arranging your own cheese.
We’ve all been eating way too much sugar all December but if you want to do a small dessert and make it look special, dust some edible glitter onto your store bought cookies or cake. Yes, edible glitter is a thing.
Set up Pandora at a volume where you can hear it – but don’t have to raise voices to hear each other. Hipster Cocktail Party is a great one. Don’t let the name turn you off; the music they play is terrific. Bill Withers, Nina Simone, Van Morrison and Aretha Franklin are some regulars you’ll find on this station.