Bainbridge Island Real Estate

How we got here, Bainbridge Real Estate 2009

2010-01-28T21:21:00.000-08:00

In the first six months of 2007, there were 282 real estate transactions (all types of properties) on Bainbridge Island (with an average price of $713,500). By contrast, we had 112 transactions in the first six months of 2009 (averaging $686,000). In the second half of 2009, real estate began to move a bit; we finished with 166 transactions between July and December (compared with 213 in the second half of 2007 and 120 during that period in 2008).

Home-buying activity has increased but house prices are still sagging. Although this is the natural cycle and is a necessary step prior to the market returning to positive figures, it is a painful process for all. For the year, home prices are down 12% on average and are 6.4% of the median home price of 2008. Prices are down an average of 20% since the height of the market in 2007; with the median price drop of 19.7%. While the lower prices fueled the transaction rebound, we must wait for prices to stabilize before we declare the market healthy again.

Happy Belated New Year!

2010-01-03T14:12:00.000-08:00

A quick look at the end of 2009 in Bainbridge Island Real Estate…
On New Year’s Eve, Bainbridge Island had 158 available residential listings ranging in price from $139,000 (trailer in downtown Winslow trailer park) to $5,950,000 (historic waterfront on Manzanita Bay). The average list price was $969,965; the median list price was $698,000.
The average house size (square footage) was 3451 sq.ft., with an average price of $319/sq.ft. Average number of days on market was a whopping 250 days, over 8 months!
That’s a look of the homes available at the end of last year. Now let’s look at the ‘success’ stories.
During the last quarter of 2009, Bainbridge Island saw 61 residential properties sell. The average sale price was just over $600,000; the median sale price was exactly $500,000. The highest priced home fetched $1.6M (a waterfront home near the ferry); the lowest price was $265,000 (a 968 sq.ft. home near Lynwood Center). The average sale price to list price ratio was 94.29%.
It looks as if the smaller homes are selling more readily. The average size of the 61 homes sold in Q4 of 2009 was 2699 sq.ft, with an average price of $236/sq.ft. Compare this to the average list size of 3451 sq.ft. and $319/sq.ft.
Wishing you and yours a happy, healthy and prosperous 2010!

Green shoots continue…

2009-11-16T21:03:00.000-08:00

Our sales volume has stabilized over the past several months and inventory is down from last year. We have 242 available homes listed for sale on Bainbridge Island, last year we had 254 at this time of year. We have 47 homes under contract right now; one year ago we had 31 homes under contract …a 51.6% improvement!
October continued the trend: In October 2009, Bainbridge Island saw 24 closed sales. In 2008 we had just 10 closed sales in the month of October.
We are not back to the days of 2006/2007, but our trends are improving month over month when compared to 2008.
Nationally, home foreclosures have dropped for three straight months; another trend helping to stabilize our housing market.

Some Green Shoots to Grab

2009-09-28T19:10:00.000-07:00

According to Standard & Poor’s S&P/Case-Shiller U.S. National Home Price Index, real estate values increase this past quarter over the first quarter of 2009. This is the first quarter-on-quarter increase in three years. The Case-Shiller Index of 20 major cities also rose for the three months ending June 2009 over the three months ending in May 2009 (only Detroit and Las Vegas are continuing to experience declines).
Locally, our real estate volume has increased since the beginning of the year with July posting 21 residential sales and 20 residential sales in August (compared to 12 sales in January and 11 in February, 2009).
The quietest price point? Those homes over $2M (although agents report that serious interest is up for the upper echelon of home prices).
Perhaps the biggest surprise right now? Even though it is a buyer’s market, Bainbridge only has 249 active residential listings right now, far below the 300 plus often seen at this time of year.

Bainbridge Real Estate Holding Steady...

2009-07-29T17:10:00.000-07:00

That is if you’re not selling raw land.
A glimpse of our current market activity shows that we are just about the same as last year for volume.As of Tuesday, July 28th, Bainbridge had 293 active residential listings with 40 of those listings under contract (13.7%). Last year at this time we had 338 active residential listings with 43 of those listings under contract (13%).
The condo market is moderately improved this month: 128 active with 9 under contract (7%). Last year we had 124 condos on the market with 5 under contract (4%).
Land is another story. Land loans are expensive and harder to find. There are good, solid lenders with land loans available, but the loan rates are several points higher than conventional residential loans.
We have 81 land listings on Bainbridge right now with 0 under contract. Last year we had 89 land listings with 7 under contract (8%).
Well, our real estate market isn’t as hot as our weather (101degrees today?!), but it is perking right along.
Speaking of the weather…please take special care to drink plenty of fluids and do not leave children or pets unattended in cars or any place they can over heat. Check in on elderly friends and neighbors to be sure they are OK.
Stay cool…take care.

Confidence up as housing prices stabilize

2009-07-01T21:31:00.000-07:00

The stock market ended its best quarter in years yesterday and pending home sales rose 0.1% in May, according to the National Association of Realtors. Hopes are high that sales will hold steady after rising 7.1% in April; April was the fourth straight month of gains.
Locally, our inventory of unsold homes is lower than in recent years. Bainbridge Island has 298 homes on the market today with 38 of those homes under contract (13% of homes are under contract.)
Not surprisingly, our most active segment of the market is first time homebuyer’s and entry-level homes. Buyers in this price range are often eligible for the $8000 first time homebuyer’s credit. These buyers generally enjoy much better interest rates with conforming loans.
Today’s statistical breakdown:
23% of the 66 homes priced up to $500k are under contract. Of the 150 homes in the $500k-$1M range, 13% of the homes are under contract. Bainbridge has 82 homes priced over $1M of which 5% (4 homes) are under contract.
Clearly, statistics favor homes priced less than $500k, but we are seeing increased activity in the upper price ranges…hopefully another sign of recovery.

Home Inventory Shrinking

2009-06-14T18:05:00.000-07:00

Waiting to purchase a home may not be the best strategy for those looking for bargains in residential real estate. Interest rates are beginning to rise and there are fewer homes on the market this year than last. As of today, Bainbridge Island has 261 active residential listings; last year at this time we had over 300 active residential listings.
In the past few weeks, interest rates have climbed from record lows of 4.5% to over 5% for a conventional, 30-year fixed-rate mortgage. While interest rates under 6% are still historically low, every tick upward impacts your mortgage payment. There are still good deals in home financing, but conventional wisdom predicts that interest rates won’t stay low forever.
Parts of King County are showing signs of price stabilization, with a few areas in the Seattle area posting price gains. System-wide, prices for single-family homes and condominiums that closed last month were up about 2.6% since January of this year.
Don’t let these historically low interest rates, lower prices and the $8000 tax credit (available to ‘first-time’ home buyers) pass you by!

Bainbridge Island Real Estate Now

2009-05-19T21:01:00.000-07:00

As of May 16, 2009 Bainbridge Island had 270 residential listings; 30 of which were under contract giving us an 11% listing/pending ratio. Last month, on April 15th, Bainbridge had 252 residential listings with 33 homes under contract for a 13% listing/pending ratio.
Our most active segment of the market is in the $300k-$400k price range. 32% of homes in this price range are under contract. One of the reasons so many homes sell in this range is the availability of money at low interest rates for loans up to $417k. Loans in this range are much easier to qualify for than larger (jumbo) loans and come with historically low interest rates.
Need another incentive? For the next several months, first time home buyers may qualify for up to an $8000 home buyer credit.

Some good news

2009-04-29T21:42:00.000-07:00

Good news for sellers: Yes, homes are selling. In fact, more homes sold in the first quarter of this year than in Q1 last year (37 vs. 34). As of April 7, there were 13.8% more homes pending (under contract) than on that date last year (33 vs. 29). Pending condominium sales are up substantially: there was only one pending at the beginning of the year vs. ten condos in contract now.

Good news for buyers: House prices are low. On Bainbridge, the median home price has dropped 17.2% since March 31 of last year (see chart below). Condominium prices have not statistically dropped, but with only five condo sales on the books so far in 2009, not enough have sold to make a valid statistical model. The same is true with land, of which there have only been three sales this year with one pending at the time of this writing.

Good news for borrowers: Loans are available, and rates are great! If you have 20% to put down with good credit, loans for less than $417,000 are readily available at rates ranging from 4.75% to 5.4%. Jumbo loans (packaged for $417K to $700K, and from $700K to $1.5M) are also available at rates as low as the high 5s and low 6s; with down payment requirements ranging from 20% to 35%. Interest rates for jumbo loans will likely decrease over the next few months.

Consumer Buying Power vs. Confidence

2009-04-01T15:38:00.000-07:00

There is a recent consumer report by Nielson Online that produced some unexpected insights on consumer buying power resulting from the economic downturn.
As expected, consumer confidence is way down. The unanticipated consequence of this economy is that some of us actually have increased purchasing power. The increase in purchasing power is due to a dip in gas and energy prices, tax rebates and historically low financing rates for those refinancing or purchasing within the conforming loan limits.
The report provides some hidden good news about our economy. You can read it for yourself; copy and paste the following into your web browser.
http://windermere.com/index.cfm?fuseaction=content.libraryHTMl&contentID=105898
Enjoy!

Bank Woes
If you perused the Business Section of the Sunday Times this weekend you found a wealth (no pun intended) of information about our local banks, and local banks under stress. The article is interesting and informative. It explains the criteria for determining a troubled bank and identifies local banks under stress. Perhaps not a 'feel good' read, but useful and practical information. To read the entire article, copy and paste the following into your browser.
http://seattletimes.nwsource.com/flatpages/businesstechnology/comparingwashingtonsbanks.html

New Consumer Website for Mortgage Relief

2009-03-21T15:32:00.000-07:00

There is a new government website with online tools that can help troubled borrowers determine whether they are eligible to participate in a loan modification or refinancing program.
The site, MakingHomeAffordable.gov, is designed to help consumers understand how the ‘Refinancing and Loan Modification Program’ works and determine who is eligible for the program. In the press release , Housing Secretary Sean Donovan said this site provides the tools for American families to quickly access the help they need.
A number of lenders, both large and small, have already agreed to work within these guidelines and actively participate in the Making Home Affordable program.
JP Morgan Chase (including current WAMU and EMC customers) has introduced several new procedures, including proactive solicitations to eligible borrowers regarding the MakingHomeAffordable program.
If you think you may qualify for some mortgage relief, go to www.MakingHomeAffordable.gov and follow the instructions to determine eligibility.

Home sales up!

2009-03-15T20:53:00.000-07:00

Perhaps we’re seeing the light at the end of the tunnel (let’s hope!).
In the first two months of last year 16 homes sold on Bainbridge Island; this year we had 23 residential sales. During January and February of last year, our median price was $700k, this year the median price fell to $528k. That price drop is a bit deceiving. Included in the first two months of last year’s statistics is a sale of $6.2M, the highest price ever paid on Bainbridge Island for a residential listing. If we remove that sale from the median price, the median sale price drops to $590k for Jan/Feb of 2008…much more in line with our reality.
It is encouraging to see sales volume up. Other parts of the country are reporting increased volumes too. This is may be a sign that the market has adjusted, that banks are beginning to lend, and that buyers are seeing value in real estate. By most accounts, real estate has been much less volatile and more stable than the stock market in recent months.
Comparing the beginning of last year to the beginning of this year shows us a few more trends. The ratio of sold price to list price in 2008 (with or without the sale of $6.2M) was over 99%; this year that ratio drops to 94.05%. This seems to show that buyers are more powerful than in previous years and sellers are giving a bit during negotiations.
Just a few more numbers to chew on…
Last year’s average sale price during January and February was $752k (without the $6.2M sale); this year’s is $626k. As I mentioned, the highest priced residential sale of a listed property ever sold on Bainbridge is $6.2M and occurred in the first two months of 2008; the next most expensive property to sell during that time period last year was $1.55M. This year January and February saw a high sale price of $1.25M.
Clearly, our prices have adjusted. The good news is that buyers are coming back to the market. We are not close to the volumes seen during the ‘boom years’ but we are seeing movement…buyers taking advantage of low interest rates and lower prices.

American Recovery and Reinvestment Act 2009

2009-02-26T20:52:00.000-08:00

This announcement came out a bit earlier than expected, thanks to the newly signed American Recovery and Reinvestment Act of 2009.

FHA has increased the maximum (conforming) loan limits in all areas, essentially to match the maximum (conforming) loan limits that were phased out at the end of last year.FHA loan amounts greater than $417,000 now have an interest rate of about6.00%. FHA loan amounts less than or equal to $417,000 have a rate of about 5.50%. (Loan rates fluctuate constantly, so talk to your loan broker for current rates.)

NEW MAXIMUM LOAN AMOUNTS FOR KITSAP COUNTY
Single Family $475,000
Duplex $608,100
Triplex $735,050
Fourplex $913,450

Looking toward Spring

2009-02-20T14:59:00.000-08:00

Last I wrote I was waiting for the January foreclosure numbers from the County Records. Well, they came in…a lot higher than our December numbers. Kitsap County saw 110 foreclosure notices issued to homeowners; Bainbridge Island received 8 of those foreclosure notices.
There is good news for Bainbridge. Our great schools, desirable lifestyle and proximity to Seattle continue to attract buyers from Seattle, the Eastside and beyond. Movement to Bainbridge has slowed as the general market has slowed because buyers are having trouble selling their homes. But homes are selling and buyers are taking this opportunity to own a home on Bainbridge that was previously out of their reach.
I have heard from a few agents, and seen the stats to prove it, that Bainbridge prices are now more attractive than comparable properties in West Seattle; something that couldn't be said in recent years. The price adjustments weren't pleasant, but it may be to our benefit to be a bit more affordable that other Puget Sound neighborhoods. Spring should tell us more...

Market time increases

2009-02-02T16:51:00.000-08:00

This past January (2009) Bainbridge Island had 12 residential properties close (sell) out of a total of 197 residential listings. In other words, 6 % of the available homes on the market sold last month. The average Days on Market in January 2009 was 166 for those sold properties, in January 2008 the average Days on Market was 95, over a 50% increase in market time…time for seller’s to be patient.
Although Bainbridge has a few distressed properties, we do not approach the levels of foreclosures seen in other parts of the country. December 2008 saw only one foreclosure notice served on Bainbridge Island. Data for January 2009 will be available later this week.

Bainbridge Island Vacant Land - Market Snapshot

2009-01-23T14:27:00.000-08:00

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

2009-01-16T13:16:00.000-08:00

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.

Looking ahead to 2009...

2008-12-31T15:33:00.000-08:00

Some of the headlines I’ve seen this week talk about an astronomical increase in foreclosure rates for 2009. One headline, “Massive Foreclosures in 2009” on Trulia.com, featured a story stating that foreclosure filings for the month of November were up 28% from one year ago. On Bainbridge Island, the number of foreclosure filings doubled from November 2007 to November 2008; from one filing in November 2007 to two filings in November 2008. Be wary of statistics…they can be misleading.
All this is not to make light of the stresses and strains on our current housing market and lackluster economy. While the Feds are trying to stem foreclosures, lower interest rates, stimulate the economy and shore up the housing market, we have yet to see the situation stabilize.
Yet, our housing market plugs on…people still want to move to Bainbridge Island for a number of different reasons: to be with family; to send their children excellent public schools; to enjoy the strong community atmosphere, to take advantage of an easy commute to Seattle, Bellevue or Redmond.
With Seattle Public Schools in the midst of closing a number of public schools, Bainbridge Island may see an influx of school-age families looking for great public schools with affordable housing and an easy commute to Seattle. Our entry-level home prices have moved into a price range that will allow young families to purchase their first homes on Bainbridge, and send their children to our great public schools.
See…there may be a silver lining after all…

Weathering the storms...

2008-12-14T21:32:00.000-08:00

Will it be a White Christmas?
With temps predicted to hover in the mid-twenties through the week, and more precipitation due mid-week…we could be setting up for a White Christmas!
Yes, snow days mean traffic snarls, school delays and schedule changes, but snow also gives countless young children their first look at a winter wonderland. There will be snowmen, snow-angels, snowball fights and (with enough snow) toboggans and sleds. For snowboarders and skiers, the snow is a gift in itself for now ski resorts will open their doors.
Although I no longer ski (I’m more of an annoyance on the slopes than a skier), snow on Bainbridge is always an exciting prospect. Let’s all enjoy this time with friends and family, and be thankful to live in such a wonderful and vibrant community.

First time buyer?
Ah yes, exciting times in real estate these days…every bit as exciting as the prospect of snow.
We’re told the government is hoping to bring interest rates down from their current rate of (about) 5.5%...perhaps as low as 4.5%. Many first-time home buyer’s are entitled to a $7,500.00 Federal Tax Credit if they purchase before June 30, 2009. At this time, that credit is an interest-free loan, but there is talk of making it a credit that does not need to be paid-back.
Buyers are able to negotiate in this market, often getting loan points paid or other concessions helping to make their new home even more affordable. For some, buying now ends up being less expensive than waiting to see if the market will drop another 10%: the money saved on the lower interest loan and seller-paid closing costs save more over the course of the loan than buying the house at a lower price.
Even with historically low interest rates and the Federal Tax Credit, buyers are hesitant…stuck between low house prices and the possibility of lower home prices. Too bad none of us know where the bottom is for the market, or when it will turn around. With new housing starts on Bainbridge at a virtual stand-still, some predict that we will see a housing shortage when the economy recovers.
The future remains to be seen but remember, the basics are back (hopefully to stay). Consider paying no more than 28% of your pretax income on mortgage payments, taxes and insurance. Also, remember to keep track of your credit score and take steps to improve it if necessary…a good credit score can save you a lot of money when it comes to your new home loan.
All for now…

2008-12-07T22:14:00.001-08:00

Santa Photos for Helpline…
Windermere is sponsoring photos with Santa with all proceeds donated to Helpline House. Santa will be at the corner of Winslow Way and 305 (Winslow’s Corner) on Sunday, December 7 from 10am-3pm; Monday, December 8 from 4pm-8pm and Sunday, December 14 from 10am-3pm. Please bring a non-perishable food item or $5.00 donation.
Helpline House is able to leverage their buying power so a $5.00 donation can buy food for many…please come and enjoy the season.
This is an all-volunteer effort so all monies and food collected go straight to Helpline.
Happy Holidays!

Help on the way?
The National Association of Realtors (NAR) has presented a formal NAR Housing Stimulus Plan to Congress, hoping that the government will take action during this lame-duck session. The stimulus plan is NAR’s attempt to arrest the decline in home values which is a critical step in turning around the economy.
The Stimulus Plan has for major items:
Make the 2008 Fannie Mae, Freddie Mac and FHA (conforming) loan limits permanent. Currently those loan limits are up to $729,750, dependent upon location. The current Conforming Loan Limit in Kitsap County is $475,000. If this legislation does not pass, the Conforming Loan Limit in Kitsap County will reset to $417,000.
Open the first-time homebuyer tax credit ($7500) to all homebuyers and eliminate the need to repay the credit.
Use a portion of the $700 billion ‘bailout’ money to create a temporary federal mortgage interest rate buy-down program. They intent is to lower the interest rate to 4.5% or lower for a 30-year fixed-rate mortgage for buyers purchase either new or existing homes up to $1M.
Ban Banks from engaging in real estate brokerage or real estate management, permanently.

Perhaps the most controversial part of this plan is the third point; the interest rate buy down. Since this buy-down only applies to purchases (not refinances) many argue that this may stimulate the housing market, but will not help those needing mortgage relief.

These are expensive plans to instigate. It is estimated that the interest rate buy-down, as currently structured, will cost up to $100 billion per year. If the plan were to include homeowner’s needing to lower their interest rate the cost could exceed trillions of dollars.

Clearly, we need drastic measures for what are proving to be drastic times. On the other hand, we must be mindful of the debt we (and our children) are incurring for this bailout. Somehow, we need to negotiate a balance designed to restore confidence in our system and not over-burden our future with debt (which could re-create this nightmare again).

2008-11-26T16:42:00.000-08:00

Yesterday we saw stocks rise for the third straight day and interest rates on conforming loans plummet. Today stocks gained a bit more ground and rates remain at a several-year low…some of the best economic news for homebuyers in quite a while. With prices often negotiable and interest rates at a 5-year low, this could be a great window of opportunity.

As of today, Bainbridge Island has 240 residential listings priced from $245,000 to $4.270M (quite the range of homes!). Of those 240 listings, 28 or 12% of listed homes are under contract.

In spite of a challenging economy and uncertain times ahead, I continue to feel blessed and thankful to live in such a close, caring community.
Remember…"Truly great friends are hard to find, difficult to leave, and impossible to forget."
-- unknown.
Wishing you a Thanksgiving Day filled with friends and family!

Bainbridge Real Estate Today

2008-11-19T21:09:00.000-08:00

A sign of the Times…
The Seattle Times published an article about foreclosure numbers in Puget Sound counties last weekend, which inspired my research on numbers specific to Bainbridge Island.
In 2007 Bainbridge Island residents received 14 foreclosure notices through October; with only 15 properties receiving foreclosure notices in all of 2007. The number of foreclosure notices on Bainbridge Island for 2008 (through October) is already 54…what will the last two months of the year add to that total? It will be interesting to see if and how the government encourages banks and lenders to renegotiate troubled homeowners.

Conforming Jumbo Loans…
As of January 1, 2009, the conforming loan limit for all of Kitsap County reverts to $417,000. At this time Bainbridge Island (and all of Kitsap County) have the benefit of the Agency or Conforming Jumbo Loans up to $475,000. This higher loan limit has made it easier for buyers to get financing on higher priced homes (loans up to $475k). Lenders are phasing the Agency or Conforming Jumbo Loans out so that by 2009 there will be no Agency Jumbo available in Kitsap County.