It's time to take a look at the real estate trends on Bainbridge for the first quarter of 2010. We've all been looking forward to this marker, to see what way the winds seem to be blowing for this new decade. The stats are in and here's the first look.
Positive sales indicators. I'm quite encouraged by the numbers from the first quarter of 2010. The month of March was the seventh in a row in which the number of closed sales surpassed the previous year’s. We ended the month with a whopping 57% more closed residential transactions (houses) than in March, 2009, (22 vs. 14.) This is an important market improvement that was seen island-wide across all types of real estate: condominium unit sales were up 50% (9 vs. 6,) and even land sales were encouraging (5 vs. 3.) Conventional wisdom would indicate that the number of sales must show stability and improvement before we can begin to claim any recovery. These latest stats are certainly pointing in that direction.
On the horizon. We get more good news when we look at homes under contract (pending sales.) We currently have forty pendings compared to 33 at this time last year. This signals that we'll have continued strength in closed sales, since we rightfully assume that most pendings will close. The inventory has grown some, but there is a nice balance between supply and demand. This greater inventory offers buyers more choices – essential in a weakened market – but not so many as to create a level of competition that results in severe downward price pressure. Most telling to me is the level of energy among the island's agents and brokers--we're busy, there's a positive buzz and we're excited to be able to help people again!
The money behind the market. We continue to see most of our activity in the upper and lower price points of our market--below $600,000 and above one million. Below $600k, buyers are often able to obtain a conforming loan (under $417,000,) which gives them a lower interest rate and less restrictive loan requirements. Also, we are seeing FHA loans being used, which have a ceiling of around $475,000 with a current 5.5% interest rate. We're also seeing some activity from the $8,000 tax-credit for first-time home buyers, although mostly from sellers who are seeking a "move-up" market. For high-end real estate transactions that exceed $1 million, we often see buyers offering all cash or large amounts of cash, requiring them to finance very little of the purchase. There's talk of interest rates continuing to rise, which could dampen the real estate recovery. The days of 4% loans may be over, but we've had years of a healthy real estate marketplace when rates are in the 6% range, and could do so again.
The low-down on prices. It's a hard pill to swallow, but we seem to have lost all the appreciation we built in the last several years. Our median price for homes right now is essentially at 2005 levels. From a seller’s perspective, that may be all right if they bought before then, and haven't refinanced. Folks who bought at the top of the market--between mid-year 2006 to 2007--are not able to recover what they paid, losing equity, and facing the risk of being "under water," owing more than they can sell their house for in today's market. We're still in a buyer's market, but prices are beginning to encourage people to buy. People who have been priced out of Bainbridge are seeing that now is a good time to make the move here. Folks who want one of our gorgeous waterfront or premier homes are deciding this is their opportunity.
Looking ahead. So where is all of this pointing us? Buyers are taking advantage of these favorable conditions and buying. Sellers have had enough time to adjust to the current economy, and are bringing their homes on the market at realistic prices. Our long-term regional economic and jobs forecast is positive. Bainbridge will always be one of the premier locales in the region, with one of the strongest housing markets. Time will tell how quickly our local recovery will take, but our current foundation is undeniably stronger than it’s been in recent years.
If you or someone you know is thinking of buying or selling, I would welcome the opportunity to chat and see how I can be of service. Also, I'm happy to simply draw up a current market price opinion for your home, with no obligation on your part, so that you can have a good sense of how the changes in our market have impacted your overall real estate portfolio. Just give me a call 206.713.7134. Cheers!
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