Checking the Thermometer
Every day, we hear news about the cooling real estate market but it’s important to consider all the factors that go into those reports. Our market has chilled slightly from its previously overheated state and has settled into what might be described as a strong normal market. The business section also contains reports of ongoing job growth in the Seattle area, especially in the well-paid tech industries. Concurrently, when Seattle’s transportation woes and other urban issues are taken into consideration, the demand for Bainbridge homes, especially for families, will likely continue for the foreseeable future.
Crunching the Numbers
On the whole, most indexes show data that support a steady market in the coming months. If we isolate the third quarter and look at sales, the number of homes sold only dropped 4.4% from 2017 (137 in 2017 and 131 in 2018). In that same period, the median price of homes sold went up from $875K to $912K – a 4.2% increase. If we compare the median price of homes sold during the third quarter, they are up 8.8% from the beginning of the year. Additionally, the Cumulative Days on Market dropped in the third quarter of this year compared to 2017 (44 in 2018 vs. 47 in 2017).
Active and pending inventory numbers are where elements of the cooldown show. Inventory is down in total inventory and active (total minus pending sales), which is contrary to what people are hearing. Pending sales are weaker at 40 compared to 57 at the same time last year. Of all the numbers we examine, this 29.8% drop is what supports the slowdown assessment. However, when reviewing the data, we can conclude that the market is healthy and strong. Maybe not as feverish as last year, but it’s still a great time to be selling or buying on Bainbridge Island.
Condominiums and Land
The condominium market has softened compared to 2017, with 73 units sold compared to last year’s 89. There seem to be two parts to the condo market: the affordable (less than $500K) and the higher end, which usually includes a good view. The affordable unit sales are up from last year, with 64 sold versus 45 in 2017. The drop in the higher end appears attributable to a lack of supply rather than a softness in the market.
Land is barely lagging behind 2017, with 24 sales year to date compared to 29 in 2017. Buying land with the intention of building is not for the faint of heart these days. Builders are busy while construction prices are still rising. New zoning rules have also added an element of uncertainty and expense.
Taking Everything into Consideration
Multiple offers are less common than last year, and prices have risen but not at the frenzied pace of last year. Our rental market has also calmed down. Our neighbors Kingston and Poulsbo, are also performing well and benefiting from Seattle’s growth. Buyers do not seem to be concerned with rising interest rates, which helps to boost confidence. As we enter the fourth quarter, there are many opportunities for both buyers and sellers. Sellers benefit from the lower inventory and the typical slower pace of the end-of-the-year market brings buyers who are serious about making solid offers.
Whenever the market shifts, it’s wise to ensure your strategies have adapted to it. As we tilt toward normalcy, there will be more competition for buyers that need to be accommodated. Presentation, realistic pricing and sound advice are as important as ever. Skillful real estate brokers prove their value in helping both buyers and sellers match their approaches to the existing market. I am here for you, wherever you are in your real estate journey.