Our real estate market did not perform at the same level in 2018 as it did in 2017. That is not to say we had an unsuccessful market in 2018; nor does it mean we should brace for a difficult market in 2019.
We had a frenzied market throughout 2017, reflective of the Seattle market. Bainbridge activity peaked during the second half of 2017, which flowed into the early months of 2018. The frenzy cooled, as it did in Seattle, and we moved toward a slower pace in the second half of the year. (There were 314 homes and condos sold on Bainbridge between July and December 2017, surpassing the previous high of 290 during that same period in 2015).
When viewed historically, 2018 appears to be much closer to “normal” than 2017. In the context of the larger local and national economies, our real estate market held up very well.
Considering All Factors
Looking at real estate appreciation, 2018 was very successful. The median price for homes and condos climbed almost 8% and in the second half of 2018, we saw an appreciation of almost 5% over the second half of 2017.
Using general statistics only gives us an idea of the movement of the market but not necessarily of any individual home. It does give sellers an inkling of the direction of their homes’ values. The rule of thumb says that a home needs to be owned for at least five years to really benefit from a market’s movement.
Comparing the median home price sold at the end of 2013 ($527,000) with the same price at the end of 2018 ($908,500), we have seen a 72.4% increase. If you had purchased a home in 2013 and were to put it on the market today – assuming it was properly presented and marketed – you would probably realize a healthy return on your 2013 investment.
When we look at the bigger economic picture, we do not see deep recession signals; merely a shift to a more normal market. Sellers are now competing for buyers, and buyers are more discerning and disciplined in their approach. Pricing, presentation and negotiation – all areas where good agents bring value to the table – are critical for sellers to achieve the best net value from their homes and condominiums.
The condominium market experienced a more dramatic slow-down in the second half of the year. During the first half, 2018’s condo sales surpassed 2017’s but by the end of the year had fallen behind in total numbers (126 sold in 2017, 109 in 2018). The area of steepest decline was in the $800K-$1M price range (24 sales in 2017 and 10 sales in 2018).
Two new projects, The Roost and Residences at Pleasant Beach, both sold briskly in the second half of 2017 and were completely sold out by the first half of 2018. No new projects came to the market in 2018, so supply might have as much to do with the drop as demand.
As with homes, the median price of condos had a healthy increase of 8.6% over 2017. The forecast for the Bainbridge condominium market is positive. There are two buyer types who are especially drawn to condos: people needing more affordable residences and “downsizers.”
In 2018, 42% of the condos sold were priced less than $500K compared to 17 homes sold for less than $500K. At the upper end of the market, downsizers were the driving force in the over $800K sales and inventory was lacking in the second half of 2018.
Land sales in 2018 were down compared to 2017 (31 in 2018 versus 41 in 2017), but the median price increased a whopping 60% ($400K in 2018 versus $250K in 2017). To be fair, some of the slow down in land sales is attributable to the COBI moratorium.
A Forward Focus
The good news is that our regional economic picture is healthy with a positive outlook. The bottom line: the Bainbridge Island real estate market is alive and well.
Bainbridge Island Home Sale 2018