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.