Bainbridge Island Vacant Land - Market Snapshot

In the last 6 months, out of 138 vacant land listings (zoned residental), 5 have sold with 1 sale pending.

SOLDS:
1 acre sold for $110k at 100% of list price
1 acre sold for $125 at 100% of list price
.55 acre sold for $185 at 79% of original list price ($235k)
.74 acre sold for $212k at 88% of list price ($240k)
1.25 view acre sold for $320k at 72% of original list price ($445)

PENDING SALES:
.22 acre listed for $119k

Of the 138 listings tracked during this period, 61 properties have cancelled or expired. That leaves 71 properties (priced from $89,500 to $2,940,000) currently listed for sale as vacant land on Bainbridge Island. (Approximately 1% of the current 71 listings are under contract.)

Mortgage rates for vacant land are always higher than owner-occupied mortgage rates because banks assess a greater risk to a loan whenever the owner does not use a property as a primary residence. With banks and lenders being even more risk adverse than normal, land loans are expensive and hard to find.

On the flip side...housing starts on Bainbridge Island have been extremely low for months. As the economy begins to right itself and demand grows, we expect a shortage of new homes, which will put pressure on prices and vacant land. It's all a matter of time.

A Brief Review of 2008

As anyone who is even vaguely aware of the real estate market (either nationally or locally) knows…the past year was challenging for sellers, especially if they had purchased within the past 3-5 years.

Here at Windermere we’ve been keeping statistics on average annual Bainbridge Island market sales since the early 80’s. You have to go back to 1982 to find a larger correction in average home prices than the 8.6% decline in 2008. (That 8.6% decline was tempered by the largest residential land sale on Bainbridge on MLS records of just over $6M in early 2008.) Our median price declined 13.3% bringing our median price close to the median in 2005.

In 1982, prices declined 17.63%. In all the intervening years, the next largest average price decline experienced was -3.52% in 1985. Even though this year’s drop was unusual in island history, an 8.6% decline has certainly outperformed the stock market, most regional real estate markets and the national market. In the years leading up to this year’s slide we saw increases of 13% in 2003, 14.5% in 2004, 21.5% in 2005, 12.26% in 2006 and we were up 10.7% at the end of June 2007 when the our current market decline began.

Nevertheless, 2008 showed a marked decrease in the number of folks successfully selling their houses or condominiums. Although 188 houses sold, this was a 43.4% drop from the prior year’s 332 sales. Condominiums have faired even worse, with a total of 44 sales in 2008 versus 133 in 2007 (a 67% decrease) and average prices slipping 11%. The real story is that a record 372 sellers removed their homes from the market without selling during the course of the year.