Showing posts with label Real Estate Trends on Bainbridge Island. Show all posts
Showing posts with label Real Estate Trends on Bainbridge Island. Show all posts
Friday, April 16, 2010
Bainbridge Island condominium market showing signs of life, too!~
I had a friend and former client ask me how the condominium market looks on Bainbridge these days. There's lots of good news there. Most significantly, we currently have only 65 condos currently listed--that's down from 117 listed last summer. They range from $130,000 to $1.350 million on Shannon Drive. (There's also a boat slip listed for $76,000 which counts in the numbers as a condo.)
Even better news, as of this morning, we have eleven condos in contract with buyers. That's about double what we've been seeing in the last couple of years, and is welcome, to say the least. It's not surprising that the list prices are dropping in order to find the price buyers will respond to. I like to track original list prices and compare them to where the properties are listed when they get an offer. Condos currently in a Pending Status started with an average price of $516,000, but their average list price when the offers came in is $408,000. Days on market is consistently several months. For a condominium to sell quickly, it will have to be priced realistically at the time of listing, perhaps priced a bit below market, be in great condition, and listed in top showing condition.
We've sold 58 condos in the last year. With 65 currently listed, that means we have over a twelve-month supply, which is still solidly a Buyer's Market. The condo properties that have sold are averaging a selling price around 95% of the last list price, which is consistent with the residential/house market. It's unrealistic in this market to expect a full-price offer.
I think the best news for condominium owners who are thinking of selling is that residential properties--houses--are also selling now. Since most condominiums on Bainbridge Islandare sell to folks downsizing from houses with yards or large lots, it's great news that those properties are selling. We're starting to see a pool of ready buyers who have equity, good credit, but who know the market values and who will negotiate hard.
Sunday, January 24, 2010
Tax credit for 1st-time and experienced homeowners~
But fewer people are aware that if you've lived in your home for a consecutive 5 of the last 8 years, you could qualify to receive up to $6,500 credit against your 2009 or 2010 taxes when you buy another principle residence. The paperwork required is fairly straightforward--a HUD-1 Settlement Statement from a closed transaction anywhere between November 7, 2009, and June 30, 2010 (in contract to purcase before April 30th,) and proof of your prior residence.
There are some income restrictions, but essentially this is easy money. If buying a new home is in your plans this year, it may make good sense to act sooner rather than later. Furthermore, interest rates are still low--below 5% again for conforming loans with 1 point. In this buyer's market, it's not uncommon to negotiate to have the Sellers pay down the loan rate.
Here's a gorgeous home I have listed that just had a $51,000 price drop to $799,000. It's beautifully located on Tiffany Meadows, a quiet street just off Ferncliff on Bainbridge Island. It's .5 miles to the ferry terminal, and under a mile to the center of Winslow village shops and restaurants. The home has a lovely view of the 10th green of Wing Point Country Club and the home and gardens are professionally designed with an artist's eye. Here's a link to a full preview: Tiffany Meadows home. This would be a great place to call home, and pocket $6,500 at the same time. For a link to all properties available on Bainbridge Island, please click here.
Sunday, January 17, 2010
End of year market analysis of Bainbridge Island real estate~
It's been a year with lots of ups and downs for most people in most areas of their lives. That's certainly been true in the real estate world on Bainbridge Island. The good news is that we finished strong, with all the numbers going in the right direction.
The number of listed residential properties dropped to a low we haven't seen since 2006--only 174 home listed as of the end of the year. (January has not yet shown a surge of new listings.) That's down 14.3% from the 203 listed homes in December 2008 and down from the 193 listed in the prior month, November 2009.
That's significant, because supply and demand are always at play here. To search for all properties currently available on Bainbridge Island, click here.
We also saw the numbers of Pended Sales and Closed Sales increase over the end of 2008 by healthy margins. Twenty-two homes closed in Dec. 2009 compared to only 13 in 2008, for a strong increase of almost 70%. Pended sales (those listings in a transaction to sell) jumped from 13 in 2008 to 17 in 2009, another strong 30.8% increase.
However, a single month's activity is only a snapshot, and not a trend, certainly. The following graph from Trendgraphix shows the Listed, Pended and Sold numbers over the course of all 2009:
One interesting correlation that is apparent in this graph is the relationship between pended and sold properties. A 100% correlation would mean that every home with signed paperwork would close--and you can see that we're not there. However, the numbers are getting closer, and my personal observation is that more and more transactions are coming to a happy and successful closing, with fewer Buyer's backing out of their purchases. I was pleased this year to have every transaction I participated in ultimately reach a successful closing. Sometimes the lenders made us all hold our breaths (or our tongues,) but my clients have been able to complete their purchases and sales once we've begun.
There is no question that we are still strongly in a Buyer's Market, which is reflected in the prices properties are selling for. As much as we've gone up and down, we're also going around and around, back to the future. Prices have rolled back to about the 2005 level, in both average and the more reliable median prices. Home owners have watched their equity shrink, and that's a difficult ride to be on, especially since we have become accustomed to expecting prices to continue to rise year after year.
Certainly double-digit appreciation was not sustainable here or anywhere, especially without salaries increasing at the same rate. At the height of the real estate market, which in hindsight seems to have been mid-2006 to mid-2007, most people I knew could not afford to buy the homes they were living in. In that way, the adjustment has been healthy. Unfortunately, you can't take "healthy" to the bank, and it's heartbreaking to see people who need to sell, who can't clear enough at closing to cover their debt load.
I'm an optimistic person, and I believe in both the appeal of Bainbridge Island and the economic health of the Greater Seattle Area. I believe that to sell a home today, the price must be realistic and in line with the current market, it must be well prepared, and professionally represented. Buyers are negotiating from a position of strength, which can be a challenge--one that I welcome representing either side in a transaction. Banks are loaning and rates remain low.
One last item (lots to digest) that I'll write more on another day. The Federal Government has extended the tax credit for first-time home buyers, and for current home owners who meet certain criteria.
Will interest rates go up or down? Will prices stabilize here or take another drop? I'm reading the experts and buckling my seat belt for an interesting journey this year. One thing I know for sure--we'll have more perspective when we look back a year from now. Ironically, my best instinct tells me this is a good time both to buy and sell.
The number of listed residential properties dropped to a low we haven't seen since 2006--only 174 home listed as of the end of the year. (January has not yet shown a surge of new listings.) That's down 14.3% from the 203 listed homes in December 2008 and down from the 193 listed in the prior month, November 2009.
That's significant, because supply and demand are always at play here. To search for all properties currently available on Bainbridge Island, click here.
We also saw the numbers of Pended Sales and Closed Sales increase over the end of 2008 by healthy margins. Twenty-two homes closed in Dec. 2009 compared to only 13 in 2008, for a strong increase of almost 70%. Pended sales (those listings in a transaction to sell) jumped from 13 in 2008 to 17 in 2009, another strong 30.8% increase.
However, a single month's activity is only a snapshot, and not a trend, certainly. The following graph from Trendgraphix shows the Listed, Pended and Sold numbers over the course of all 2009:
One interesting correlation that is apparent in this graph is the relationship between pended and sold properties. A 100% correlation would mean that every home with signed paperwork would close--and you can see that we're not there. However, the numbers are getting closer, and my personal observation is that more and more transactions are coming to a happy and successful closing, with fewer Buyer's backing out of their purchases. I was pleased this year to have every transaction I participated in ultimately reach a successful closing. Sometimes the lenders made us all hold our breaths (or our tongues,) but my clients have been able to complete their purchases and sales once we've begun.
There is no question that we are still strongly in a Buyer's Market, which is reflected in the prices properties are selling for. As much as we've gone up and down, we're also going around and around, back to the future. Prices have rolled back to about the 2005 level, in both average and the more reliable median prices. Home owners have watched their equity shrink, and that's a difficult ride to be on, especially since we have become accustomed to expecting prices to continue to rise year after year.
Certainly double-digit appreciation was not sustainable here or anywhere, especially without salaries increasing at the same rate. At the height of the real estate market, which in hindsight seems to have been mid-2006 to mid-2007, most people I knew could not afford to buy the homes they were living in. In that way, the adjustment has been healthy. Unfortunately, you can't take "healthy" to the bank, and it's heartbreaking to see people who need to sell, who can't clear enough at closing to cover their debt load.
I'm an optimistic person, and I believe in both the appeal of Bainbridge Island and the economic health of the Greater Seattle Area. I believe that to sell a home today, the price must be realistic and in line with the current market, it must be well prepared, and professionally represented. Buyers are negotiating from a position of strength, which can be a challenge--one that I welcome representing either side in a transaction. Banks are loaning and rates remain low.
One last item (lots to digest) that I'll write more on another day. The Federal Government has extended the tax credit for first-time home buyers, and for current home owners who meet certain criteria.
Will interest rates go up or down? Will prices stabilize here or take another drop? I'm reading the experts and buckling my seat belt for an interesting journey this year. One thing I know for sure--we'll have more perspective when we look back a year from now. Ironically, my best instinct tells me this is a good time both to buy and sell.
Thursday, October 1, 2009
Third quarter market analysis Bainbridge Island real estate~
We're just now getting the statistics for the end of September, and we're about to start on the final quarter of 2009. Everybody I talk to wants to know the same thing--how's real estate doing on Bainbridge Island.
One bit of information I've analyzed this past week is helpful. It's an Excel spread sheet that shows the listing/pending ratios that we've been tracking on Bainbridge for the last several years. Some real estate analysts believe that comparing the number of total listings to the number of listings in contract will give you a good view of the health of the marketplace.
At the end of September we had 289 total residential listings, with 47 of those houses in a contract to be sold. That's a 16% "absorption rate," which is significant for two reasons. The first is that conventional wisdom is that 16% is seriously a Buyer's market, and that's not news to anyone.
But, the other significance is that the last time we were close to 16% was July of 2007 at 19%. That's when we had crested the top of the market and had our skis pointed downhill. Little did we know then that this was going to be a black diamon run with moguls! By October of 2007 we real estate agents knew the market had dropped; few of us understood that it had fallen off a cliff. When we look back at the numbers, that free fall is apparent. The absorption rate in May of 2007 was 27%, and by October it was 9%. In one quarter we went from 52 homes in contract to 23 . We've pretty much been bouncing along that bottom ever since.
It was hard to know in the period from the summer of 2006 to the summer of 2007 that we were at the very peak of the marketplace. Some indicators were apparent, and looking back now we can see all the signs. It took courage and vision during that year to sell when everyone else was buying, when prices seemed to be rising with no end. But, nothing has no end.
It is hard now to know if we are at the bottom. Prices are still dropping. It takes courage and vision to buy when few are buying. But, prices are at 2005 level, or lower, interest rates are low, and Sellers are eager to sell. Perhaps a year or two from now we'll all know if indeed this is the bottom. If it is, those who buy now will be congratulating themselves.
One bit of information I've analyzed this past week is helpful. It's an Excel spread sheet that shows the listing/pending ratios that we've been tracking on Bainbridge for the last several years. Some real estate analysts believe that comparing the number of total listings to the number of listings in contract will give you a good view of the health of the marketplace.
At the end of September we had 289 total residential listings, with 47 of those houses in a contract to be sold. That's a 16% "absorption rate," which is significant for two reasons. The first is that conventional wisdom is that 16% is seriously a Buyer's market, and that's not news to anyone.
But, the other significance is that the last time we were close to 16% was July of 2007 at 19%. That's when we had crested the top of the market and had our skis pointed downhill. Little did we know then that this was going to be a black diamon run with moguls! By October of 2007 we real estate agents knew the market had dropped; few of us understood that it had fallen off a cliff. When we look back at the numbers, that free fall is apparent. The absorption rate in May of 2007 was 27%, and by October it was 9%. In one quarter we went from 52 homes in contract to 23 . We've pretty much been bouncing along that bottom ever since.
It was hard to know in the period from the summer of 2006 to the summer of 2007 that we were at the very peak of the marketplace. Some indicators were apparent, and looking back now we can see all the signs. It took courage and vision during that year to sell when everyone else was buying, when prices seemed to be rising with no end. But, nothing has no end.
It is hard now to know if we are at the bottom. Prices are still dropping. It takes courage and vision to buy when few are buying. But, prices are at 2005 level, or lower, interest rates are low, and Sellers are eager to sell. Perhaps a year or two from now we'll all know if indeed this is the bottom. If it is, those who buy now will be congratulating themselves.
Thursday, February 12, 2009
Current trends in residential real estate on Bainbridge~
We're almost half-way through February, so we have a pretty good idea of how the year is starting out. The news isn't as good as I'd like, nor as bad as I'd feared. Here is a link to the most recent Trendgraphix data and graphs for single-family homes.
http://www.trendgraphix.com/WAS/charts/Z110-01-01-01-0137-1-38-1B0507-200901.htm
The good news is that we're in a better place than we were a year ago. Twice as many homes are in contract and the number of solds is up 33%. Inventory is down. A year ago we had over 24 months of inventory, and that number is down to 15.7 months. The bad news for Sellers is that we are still in a massive Buyer's market and February has started out slowly. That being said, we're seeing good properties coming on the market, and Sellers are beginning to price homes where Buyer's will write an offer. One home waterfront home listed in our office received two offers this week.
We had a local mortgage broker speak to our office on Tuesday this week. Bainbridge Island remains with a ceiling of $417,000 for conforming loans, where the best rates are found. King County is up to $505,000, a fact that doesn't help us here. (The formula is based on median home price of the county, and we're lumped in with Kitsap, although our prices and demographics are more closely aligned with King.) The broker is showing a 30-year fixed rate of 5.375% with no points, and below 5% with the payment of a point. Owner occupied homes can be had with 95% down--something we thought and hoped would go the way of sub-prime lending.
Most of our buyers on Bainbridge have equity from prior real estate sales, which means that when their other property sells, they have over 20% to put down. A 20% down payment will get you a conforming loan on properties under $522,000. The median price of properties sold January 1, 2008, to today is $580,500, which means that more than half the properties sold would need more than 20% down to qualify for a conforming loan. Jumbo (non-conforming) loans are available from lenders like Washington Federal who make portfolio loans, and their rates range from 6 to 7.125 % or more.
The biggest news about residential real estate on Bainbridge remains the large inventory of unsold new construction. Here is the biggest "undropped shoe." With over 50 homes the builders need to sell, this could have a big impact on prices overall. Buchan Homes, a large corporate builder based on the Eastside, sold a home last week for $1,075,000, a $200,000 reduction from the last list price ( almost a 83.5% drop.) This home was listed over $1.6 million at one time. The large corporate builders can take these drops to unload their inventory. It will remain to be seen what effect this will have on appraisers and buyers. My prediction is that prices still have a way to go before we've reached the bottom.
http://www.trendgraphix.com/WAS/charts/Z110-01-01-01-0137-1-38-1B0507-200901.htm
The good news is that we're in a better place than we were a year ago. Twice as many homes are in contract and the number of solds is up 33%. Inventory is down. A year ago we had over 24 months of inventory, and that number is down to 15.7 months. The bad news for Sellers is that we are still in a massive Buyer's market and February has started out slowly. That being said, we're seeing good properties coming on the market, and Sellers are beginning to price homes where Buyer's will write an offer. One home waterfront home listed in our office received two offers this week.
We had a local mortgage broker speak to our office on Tuesday this week. Bainbridge Island remains with a ceiling of $417,000 for conforming loans, where the best rates are found. King County is up to $505,000, a fact that doesn't help us here. (The formula is based on median home price of the county, and we're lumped in with Kitsap, although our prices and demographics are more closely aligned with King.) The broker is showing a 30-year fixed rate of 5.375% with no points, and below 5% with the payment of a point. Owner occupied homes can be had with 95% down--something we thought and hoped would go the way of sub-prime lending.
Most of our buyers on Bainbridge have equity from prior real estate sales, which means that when their other property sells, they have over 20% to put down. A 20% down payment will get you a conforming loan on properties under $522,000. The median price of properties sold January 1, 2008, to today is $580,500, which means that more than half the properties sold would need more than 20% down to qualify for a conforming loan. Jumbo (non-conforming) loans are available from lenders like Washington Federal who make portfolio loans, and their rates range from 6 to 7.125 % or more.
The biggest news about residential real estate on Bainbridge remains the large inventory of unsold new construction. Here is the biggest "undropped shoe." With over 50 homes the builders need to sell, this could have a big impact on prices overall. Buchan Homes, a large corporate builder based on the Eastside, sold a home last week for $1,075,000, a $200,000 reduction from the last list price ( almost a 83.5% drop.) This home was listed over $1.6 million at one time. The large corporate builders can take these drops to unload their inventory. It will remain to be seen what effect this will have on appraisers and buyers. My prediction is that prices still have a way to go before we've reached the bottom.
Tuesday, December 9, 2008
Update on Bainbridge Island real estate market trends: when the bottom is/isn't the bottom~
The stock market can make quick turns up and down. If you're still brave enough to look, you know that well.
Real property by its very nature is steadier. More time and effort is required to buy and to sell. Illiquid is the term, even if you're buying waterfront.
The constant conversation topic is "where's the bottom?" Sellers and agents find it hard to set a "realistic" price on a home that a year ago could have fetched more. It's especially hard when you can point to real numbers on a spread sheet that show that the lot and construction costs exceed the current market value.
But, market value is what an informed buyer acting with free will is willing to pay. Right now buyers are skittish. Many homes are being sold today at what we perceive to be real deals--screaming bargains--if we're looking in the rear view mirror.
The question is, what kind of deal will they look like in a year from now. And the answer is, nobody knows.
The funny thing is that at the top of the market everyone wants to climb on board. We have lots of belief in the endless ride up. But, that may be the worst time to buy. At the bottom of the market, we're immobilized by our fears of the endless fall down. However, this may be a good time to buy.
So, the real question might need to be, where do I want to make my home? How long will I plan to stay? Do I need to move now? No one wants to overpay, but when you negotiate a careful price on a property in good repair that meets your needs, in this market it's best to take the long view.
Real property by its very nature is steadier. More time and effort is required to buy and to sell. Illiquid is the term, even if you're buying waterfront.
The constant conversation topic is "where's the bottom?" Sellers and agents find it hard to set a "realistic" price on a home that a year ago could have fetched more. It's especially hard when you can point to real numbers on a spread sheet that show that the lot and construction costs exceed the current market value.
But, market value is what an informed buyer acting with free will is willing to pay. Right now buyers are skittish. Many homes are being sold today at what we perceive to be real deals--screaming bargains--if we're looking in the rear view mirror.
The question is, what kind of deal will they look like in a year from now. And the answer is, nobody knows.
The funny thing is that at the top of the market everyone wants to climb on board. We have lots of belief in the endless ride up. But, that may be the worst time to buy. At the bottom of the market, we're immobilized by our fears of the endless fall down. However, this may be a good time to buy.
So, the real question might need to be, where do I want to make my home? How long will I plan to stay? Do I need to move now? No one wants to overpay, but when you negotiate a careful price on a property in good repair that meets your needs, in this market it's best to take the long view.
Wednesday, November 12, 2008
Real estate values on Bainbridge Island: upside down & underwater?~
Yesterday's New York Times had a great interactive article about home values around the country. It seems Wells Fargo commissioned a study to see what the real picture is regarding the debt to current market value.
http://www.nytimes.com/interactive/2008/11/10/business/20081111_MORTGAGES.html
The gist of its message is that in some areas of the country, huge percentages of home owners owe up to 90% of what they could sell their homes for. And, some are "underwater," or as we who live on an island say, "upside down," with their banks. Mostly that is in California, Nevada, Florida and Georgia.
How are we doing in Washington? According to this model, the average homeowner in our state owes less than 60% of what his house could currently fetch in today's market. That's equity that will survive a couple of years of price drops and eventually, make money for the homeowner.
We hear in the national news about foreclosures and short sales (when the price a home sells for will not pay off the underlying debt plus closing costs.) We're seeing that on Bainbridge Island, but they are still a small percentage of our total number of listings. That's data I can track pretty well.
What I hadn't known is how much equity most of us have in our homes. If you bought here before 2006, or if you had a substantial down payment, you should still have good equity in your home. For most of us, even in this current market, our homes have made good money for us in the last decade.
In 1998 the average selling price on Bainbridge Island was just over $340,000. The average selling price year-to-date at the end of October 2008 is almost $790,000. (I prefer looking at the mean rather than the average. The mean gives a more accurate reflection of market trends, than average but we don't have historic data for mean.) Nonetheless, the picture is still clearly illustrated here.
Can you expect to sell your home today for more than it might have received at the height of our market, around spring of 2007? Probably not, and if your home is worth more than $600,000, you may have a particularly hard time selling right now because jumbo loans (over $417,000) are difficult to find. Which means the pool of buyers with a loan and enough cash in hand to buy your property is going to be small. Hard to hear, but true.
Here's what I remind myself when times get tough: this is my life today, but it won't always be my life. Bainbridge Island remains an amazing place to live. Seattle and Kitsap County's employment picture is strong. We're luckier than 99% of the people living now or ever on this gorgeous planet of ours.
Time to count our blessings instead of dollars (or sheep.) We'll sleep better. Cheers!
http://www.nytimes.com/interactive/2008/11/10/business/20081111_MORTGAGES.html
The gist of its message is that in some areas of the country, huge percentages of home owners owe up to 90% of what they could sell their homes for. And, some are "underwater," or as we who live on an island say, "upside down," with their banks. Mostly that is in California, Nevada, Florida and Georgia.
How are we doing in Washington? According to this model, the average homeowner in our state owes less than 60% of what his house could currently fetch in today's market. That's equity that will survive a couple of years of price drops and eventually, make money for the homeowner.
We hear in the national news about foreclosures and short sales (when the price a home sells for will not pay off the underlying debt plus closing costs.) We're seeing that on Bainbridge Island, but they are still a small percentage of our total number of listings. That's data I can track pretty well.
What I hadn't known is how much equity most of us have in our homes. If you bought here before 2006, or if you had a substantial down payment, you should still have good equity in your home. For most of us, even in this current market, our homes have made good money for us in the last decade.
In 1998 the average selling price on Bainbridge Island was just over $340,000. The average selling price year-to-date at the end of October 2008 is almost $790,000. (I prefer looking at the mean rather than the average. The mean gives a more accurate reflection of market trends, than average but we don't have historic data for mean.) Nonetheless, the picture is still clearly illustrated here.
Can you expect to sell your home today for more than it might have received at the height of our market, around spring of 2007? Probably not, and if your home is worth more than $600,000, you may have a particularly hard time selling right now because jumbo loans (over $417,000) are difficult to find. Which means the pool of buyers with a loan and enough cash in hand to buy your property is going to be small. Hard to hear, but true.
Here's what I remind myself when times get tough: this is my life today, but it won't always be my life. Bainbridge Island remains an amazing place to live. Seattle and Kitsap County's employment picture is strong. We're luckier than 99% of the people living now or ever on this gorgeous planet of ours.
Time to count our blessings instead of dollars (or sheep.) We'll sleep better. Cheers!
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