Bainbridge’s real estate market is picking up after the winter slowdown. We’ve compiled key highlights from our first quarter to keep you in the know about our local island market.
Our Strong Seller’s Market
Bainbridge Island has a very competitive market right now, and we just had a strong first quarter. With Bainbridge’s quaint island feel and its proximity to Seattle, it’s very appealing to people moving away from bigger cities as COVID-19 changes the way we work. There are still many eager buyers outnumbering sellers as inventory remains low and demand remains high. Our Brokers can help navigate this competitive market. We’ve seen many situations where buyers are outbid either by price or by an all-cash offer. Having a local expert as your guide can help you achieve success.
In the last five quarters outlined in the graph below, you can see that a similar growth trend in volume is repeated when comparing 2020’s first quarter to 2021’s first quarter. We saw quite a spike this past quarter from January to March. Get ready for the market to continue to heat up as we move from spring to summer.
With our lower supply, we’re seeing even higher prices. And, many buyers are willing to meet the demands of Bainbridge’s pricing. As you can see below, the listing and sale prices both continue to rise as sellers benefit from our inventory shortage. We’re beginning to see an affordability ceiling in which some people looking to buy on Bainbridge Island aren’t able to do so.
Affordability Issues and Market Insights
Matthew Gardner, Windermere’s Chief Economist, continues to track this affordability ceiling in his most recent Housing and Economic Update: “If the pace of home price growth continues, many households will start to be priced out” of what people can actually afford. As Gardner points out, we need more supply, and we need home prices to drop to alleviate this market strain.
Unfortunately, that might not happen fast enough for many hopeful homebuyers to make their dream a reality. Gardner reminds us that the cost of materials, recent storms, and the current housing market prices have all added to the cost of building new homes. This, in turn, will add to the listing price.
Additionally, Gardner points out that mortgage rates have risen after “a jump in bond yields has led rates to spike” as the country re-opens and economic activity increases. The resulting potential inflation causes the 10-year treasury interest rates to rise in hopes of attracting more buyers. However, it is still far below standard rates and shouldn’t be a concern for buyers right now.
Ultimately, it’s still a strong Seller’s Market with an overall low supply and high demand. We expect to continue to see issues with affordability as prices continue to climb.