Home BuyersReal Estate Market December 4, 2023

Should You Buy a House or Wait? Market Data & Insights

If you are thinking about buying a home, you may be asking whether you should buy a house now or wait. There are several factors to consider, including your personal situation, the overall market, and being able to find a home that’s right for you. We’ve gathered the most recent market data and insights to help you make an informed decision.

A Look at the U.S. Housing Market

Whether you are wanting to stay in your current community or move out of state, it’s important to look at the U.S. housing market. While there are nuances and fluctuations depending on supply and demand in certain areas, the bigger picture still influences local markets. According to Windermere’s Chief Economist, Matthew Gardner, the number of homes for sale remains close to historic lows. “When adjusted for seasonality, there were just 1.03 million single family and condominium homes for sale in the month of August. That’s down 8.3% from a year ago, and the second lowest level in 2023.”

Gardner explains that this is due to mortgage rates. Current home owners are reluctant to sell and trade their low mortgage rates for a much higher one. This hesitancy is keeping the housing market tight with fewer homes for sale overall. As Gardner points out in the above video, you can’t buy what’s not for sale. However, there will always be people who need to sell due to job changes, downsizing needs, and more.

Western Washington and Bainbridge Island Market Update

When taking a closer look at the housing market in Western Washington, mortgage rates are definitely playing a role regionally as well. In the third quarter of 2023, sales fell even though the average number of homes for sale increased 29.5% from the second quarter. Gardner said he was surprised that “prices rose over the previous quarter despite the fact that mortgage rates were above 7% for almost the entire quarter.” In fact, prices for Kitsap County rose between 4% to 6.9%, which is higher than most other counties in our region. This factor, combined with other market data and insights, leads Gardner to believe that it’s still a seller’s market in Western Washington, but only slightly.

But what does this all mean if you want to buy a home on Bainbridge Island? Some of these trends are carrying over to the Bainbridge Island housing market as well, but with differences in the numbers. In the third quarter of 2023, there were 80 closed sales, which is down 21.6% year over year. However, the average home sale price was $1.6 million, which is up 8.9% year over year. Additionally, sellers received 101% of the list price. So as a buyer, the best thing to do is to assess your finances and see if there are options on Bainbridge Island that fit your criteria and price range.

Individual Considerations

If you are a Bainbridge Island homeowner and need to purchase a house elsewhere, you are in a good position to sell and buy that next home. If you are looking to relocate and move to Bainbridge Island, then it’s important to assess your personal situation and your financial goals. Keep in mind that Gardner expects inventory to remain low through next year. This means that if you see a great home now that meets your needs, you might as well put in an offer. Chances are that inventory won’t significantly increase any time soon. Plus, there will most likely be more buyers to compete with during next spring and summer when the market tends to heat up.

What About Interest Rates?

There is no denying that interest rates are high right now. According to Gardner, interest rates are now at levels not seen since the fall of 2000. But don’t let this discourage you from purchasing a home. Windermere partners with Penrith Home Loans, and Cherie Kesti, a Penrith Branch Manager and Mortgage Consultant, points out, “As we say in real estate, marry the house, date the rate. If you wait to buy, most likely the home’s value will continue to increase. This requires a larger loan regardless of the interest rate. If you buy now with a lower home value, you will have a smaller loan. With refinancing, this means a smaller monthly payment in the future.”

So, don’t let high interest rates stop you from moving forward in life. With such limited housing inventory available, the chances are homes will continue increasing in value the longer you wait. This leads to higher prices in the future, which are much harder to negotiate down in a tight market. It’s much easier to refinance a loan.

Get Advice from an Expert

If you’re still not sure what to do, contact a Windermere Bainbridge Island real estate agent to help you. Our agents are proud locals with extensive market knowledge. They will be able to guide you in the decision making process and tell you about recent home sales.

Real Estate Market October 27, 2022

Western WA Market Highlights and Insights

We’re seeing some interesting shifts in the real estate market and Windermere’s Chief Economist, Matthew Gardner, just came out with the third quarter Gardner Report for Western WA. So, let’s take a look at some of the key findings for our region along with Gardner’s helpful insights. And, if you have any questions, our highly-rated, local real estate experts are always happy to help.

Regional Economic Overview

Gardner states, “The addition of 110,000 jobs over the past 12 months represents an impressive increase of 4.9%.” Additionally, Western WA’s unemployment rate in August was 3.8%, which is .2% higher than at the end of Q2. County data is not seasonally adjusted, so that’s probably the reason for the modest increase. Gardner goes on to say, “The labor force has not expanded at its normal pace, which is starting to impact job growth. Although the likelihood of a recession starting at some point this winter has risen, I am not overly concerned at this point; however, I anticipate businesses may start to taper hiring if they feel the demand for their goods and services is softening.”

Western Washington Home Sales & Prices

These stats are taken directly from the Gardner Report.

  • In the third quarter, 19,455 homes traded hands, representing a drop of 29.2% from the same period a year ago. Sales were 15.4% lower than in the second quarter of this year.
  • Listing activity continues to increase, with the average number of homes for sale up 103% from a year ago and 61% higher than in the second quarter of 2022.
  • Pending sales (demand) outpaced listings (supply) by a factor of 1:6. This ratio has been dropping for the past three quarters and indicates a market moving back toward balance. The only question is whether it will overshoot and turn into a buyer’s market.

When it comes to Western WA home prices, they rose an average of 3.6% compared to a year ago, and they were down 9.9% from the prior quarter. The current average sale price of a home in Western Washington is $748,569. Kitsap County’s home prices rose 3% – 5.9%. Gardner comments on these numbers saying, “With the number of homes for sale rising and list prices starting to pull back, it’s not surprising to see price growth falter. We are going through a reversion following the overstimulated market of 2020 and 2021. There will be some ugly numbers in terms of sales and prices as we move through this period of adjustment, but the pain will be temporary.”

For a look specifically at Bainbridge Island’s real estate market, watch our brief market update video.

 

A Note on Mortgage Rates

It’s an unpredictable time for mortgage rates. “The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation,” explains Gardner. “As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.”

Days on Market in Western WA

  • Average days on market during Q3: 24 days. This was 8 days more than in Q2 and 7 more days than in the same quarter of 2021.
  • Our county and King County were the tightest markets in Western Washington. Homes took an average of 19 days to sell.

Still a Seller’s Market Though It’s Shifting

While we’re definitely seeing a shift in the market, it’s still a seller’s market. “A belief that the housing market is on its way to collapsing will keep some buyers sidelined, while others may be waiting for mortgage rates to settle down,” states Gardner. “Whatever their reasons, I maintain that we will see a brief period where annual price growth will turn negative in several markets, but it is only because the market is normalizing. I certainly don’t see any systemic risk of home values falling like they did in the mid-to-late 2000s.”

western-wa-gardner-quote-q3-2022

For more information, check out the full Western WA Gardner Report and Matthew Gardner’s market news videos.

Real Estate Market April 12, 2022

Bainbridge’s Market: First Quarter, 2022

Bainbridge’s market picked up in the first quarter of 2022. As was the case in 2021, it’s a seller’s market due to low inventory and high demand. Homes are still selling above the asking price and we’re seeing multiple offer situations and many all-cash offers.  We’ve compiled key highlights from last quarter to keep you in the know about our local market.

Sold and Pending Homes

bainbridges-market-sold-homes-graph

In the last five quarters outlined in the graph, 2022’s first quarter is rising like the first quarter of 2021.  This follows the usual real estate market trend and we expect to see another hot market this summer. There’s also a significant lack of inventory and there are many eager buyers, driving prices up and heavily influencing our seller’s market. 

Bainbridge’s Market Still Favors Sellers

bainbridge-list-price-received

Everyone is feeling the fatigue of low supply, which persisted in the first quarter of 2022.  But we expect the market to warm up as we head toward our busy summer season. More real estate activity lies ahead, and if you’re thinking of selling, it’s a great time to do so. If you’re looking to buy, be prepared for the competition and know that having a local real estate agent at your side is extremely beneficial. 

Listing Price vs. Sale Price

listing-price-graph-bainbridge-market

As a result of low supply, average prices rose 6.5% when compared to this time last year. They are expected to continue to rise as Bainbridge’s buyers meet the pricing demands of sellers. And, the average sale price on Bainbridge Island is almost $1.5 million.

Insights from Our Chief Economist

Matthew Gardner, Windermere’s Chief Economist, shared his Top 10 Predictions for 2022 in one of his recent Monday with Matthew videos.  Here’s what Gardner predicts for 2022:

  1. Prices will continue to rise, though the pace of appreciation will slow. Gardner thinks it will be about 6% in 2022 versus the massive 16% rise of 2021.
  2. Spring will be busier than expected.  This will increase buyer demand, as buyers get more clarity in their new hybrid model combining remote and office work.
  3. The rise of the suburbs will also result from this work hybrid model.  Many buyers are moving within the same area they already lived in.
  4. New construction jumps since the cost to build has come down. 
  5. Zoning issues will be addressed.  
  6. Climate change will impact where buyers live. People will focus more on how safe a location is in relation to natural disasters.
  7. Urban markets will bounce back after the demand drop from Covid. 
  8. A resurgence in foreign investors will return since the travel bans were lifted last November. The demand will rise as long as our borders remain open.
  9. First-time buyers will be an even bigger factor in 2022.  This year, 4.8 million millennials will turn 30, the median age of American first-time buyers.  Additionally, first-time buyers will be looking for cheaper markets.
  10. Forbearance will come to an end and that will be okay. It was well thought out, and as Gardner says, “as of recording this video, there are now fewer than 900,000 owners still in the program.”  Hopefully, this continues to drop.

For additional information, check out Matthew Gardener’s Market Update by region.

Real Estate Market January 13, 2022

Fourth Quarter Market Review for Bainbridge Island

Bainbridge’s real estate market slowed down for the holidays during our fourth quarter.  The market still favors sellers due to low inventory, and homes are still selling above the asking price.  We’ve compiled key highlights to keep you in the know about our local market.

News on Sold and Pending Homes

bainbridge-sales-Q4

In the last five quarters outlined in the graph, 2021’s real estate market started with the usual growth trend into the summer.  Now, we’re seeing the seasonal downswing during colder months. However, home prices are still increasing due to demand and sold homes still outpace pending listings. The result is a strong seller’s market. In the 4th quarter of 2021, we had 86 closed sales, which is a 39.4% decrease, year over year.

Still a Strong Seller’s Market

bainbridge-list-price-Q4

Bainbridge Island real estate demand was at a record high in the fourth quarter of 2021.  With the new era of remote work, many Seattle homebuyers are seeking the quaint island feel that Bainbridge offers. If you want to learn more about Bainbridge Island, check out our free digital guide. If you’re interested in buying or selling, our local experts are here to help.

Listing Price vs. Sale Price

Although buyers continue to meet the competitive Bainbridge pricing, there just aren’t enough homes available right now. As you can see in the graph above, the averages of listing and sale prices are starting to converge as demand stretches the cost of housing even further in favor of sellers. In our 4th quarter, we saw a 19.4% increase in the average sale price on Bainbridge Island, putting it at $1.57 million.

Insights from Our Chief Economist

In his most recent Monday with Matthew, Windermere’s Chief Economist, Matthew Gardner, shares his market forecast for the coming year: “If everything goes according to my plan, you should expect to see the housing market start to move towards some sort of balance next year, but I am afraid that it will still remain out of equilibrium until at least 2023.”  Gardner reminds us that the transition back to a balanced market will be a gradual shift.

While Matthew ensures us that he “doesn’t see a housing bubble forming,” he goes on to say “it would be silly to say that there aren’t any issues in the housing market that concern me because there are and the biggest of which is housing affordability.”  There is definite cause for concern among the millennial generation as they start “thinking about settling down and, possibly, having children” Gardner explains. “I wonder how hard it will be for many of them to be able to afford to buy their first home.”  Millennials are currently the largest slice of the generational real estate market, so it will be interesting to see where affordability and demand intersect.

Overall, Gardner concludes with a high-level market analysis: “demand for ownership housing remains remarkably buoyant and, in fact, it is quite likely that demand may actually increase with the work from home paradigm that will start to gain momentum next year.”  With dependable demand, real estate continues to be an excellent investment. 

Real Estate Market October 11, 2021

Third Quarter Market Review for Bainbridge Island

Bainbridge Island’s real estate market remains a strong seller’s market. In our third quarter, we continued to see homes sell above the asking price. We also saw a similar increase in average sale price when compared to this time last year. We’ve compiled key highlights to keep you in the know about our local market. 

third-quarter-market-stats-bainbridge

Bainbridge’s Competitive Market

Bainbridge Island continues to get more competitive for buyers in this third quarter.  Many home buyers want to live near Seattle while enjoying beautiful Bainbridge, and remote work trends have increased demand.  However, the volume of homes on the market decreased year-over-year, making our seller’s market that much stronger.  If you’re looking to buy, our Brokers can help guide you through this competitive market. They know this market extremely well, they know the nuances of Bainbridge’s neighborhoods, and they have excellent track records.

Market Data

In the last five quarters outlined in the graph below, the long-standing growth trend in sales volume is finally slowing.  Yet home prices are still growing and sold homes still outpace pending listings as a result of the increased economic demand.  As the season slows and inventory wanes, prices may level – effectively balancing out the market between buyers and sellers.  Or, at least they will start to shift toward a more balanced market.

q3 2021 sold pending graph

With our lower supply, we continue to see even higher prices. While many buyers are willing to meet the demands of Bainbridge Island’s pricing, there just aren’t enough homes on the market right now.  As you can see below, the averages of listing and sale prices are starting to converge as demand stretches the costs of housing even further in favor of sellers.

sale-listing-price-graph-q3-2021

Home Purchase Sentiment Index: Insights from Matthew Gardner

In his most recent Monday with Matthew video, our Chief Economist delivered a comprehensive analysis of the most recent Home Purchase Sentiment Index figures put out by Fannie Mae.  The data comes from a survey containing approximately 100 questions on housing-related topics. Fannie Mae collected 1,000 consumer responses from across the country. As Matthew Gardner says, “It’s the only national, monthly survey that’s focused primarily on housing.”

The survey shows that many Americans continue to think it is not a good time to buy because of the low supply and rapidly rising prices.  However, many feel it is a good time to sell as consumers predict home prices and mortgage rates will go down.  As Gardner explains, “most consumers continue to report that it’s a good time to sell a home, but a bad time to buy. They most frequently cite high home prices and a lack of supply as their primary rationale…However, the good time to buy component did tick up for the first time since March.”  While this is a recipe to shift towards a buyer’s market, we’ll see how things unfold in the coming months.

Gardner sums it up nicely: “The takeaways for me so far are that consumers tempered both their recent pessimism about home buying conditions and their upward expectations of home price growth.”  So again, we are seeing the potential for a shift toward a more balanced market.

Real Estate Market July 9, 2021

Second Quarter Market Review for Bainbridge Island

Bainbridge’s real estate market exceeded expectations in our second quarter. That’s even compared to last year’s similarly strong performance. We’ve compiled key highlights to keep you in the know about our local market. 

second quarter bainbridge market stats

Our Strong Seller’s Market

Bainbridge Island is still an increasingly competitive market, and we just had a strong second quarter.  Since Bainbridge is so close to Seattle and retains its island beauty, it continues to attract buyers moving away from bigger cities as the way we work continues to trend toward remote work. There are still many more highly motivated buyers than sellers. Inventory remains low and demand remains high. Our Brokers can help navigate this competitive market. We’ve seen continued 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, the continued growth trend in sales volume for the second quarter of 2021 is even higher than 2020’s second quarter. That was during the Covid lockdowns, which prompted a surge in home buying in places outside major cities – like Bainbridge Island and beyond.  sold pending graph bainbridge 2020 -2021

Average Prices

With our lower supply, we continue to see even higher prices. And, still, many buyers are showing that they are willing to meet the demands of Bainbridge’s pricing.  As you can see below, the listing and sale prices both continue to rise. Sellers continue to benefit from our inventory shortage.  

average price bainbridge 2021

Market Insights from Matthew Gardner

In his most recent Monday with Matthew, our Chief Economist, Matthew Gardner, begins with the staggering fact that “prices have risen almost three-fold, as the cost to finance has dropped by 72%.”  If the number sounds too good (or bad) to be true, that’s because it is. To get an accurate picture, you also have to consider inflation. Gardner points out that “just like other goods and services, the price of a house today is not directly comparable to the price of that same house 30 years ago”. That’s due to the influence of inflation in the long run.  When you adjust for inflation, the rise in housing prices becomes less drastic. Without adjusting for inflation, “prices have risen by 268%.” But when you adjust for inflation, the “real prices have increased by 83.6%.”  Therefore, “the increase is significantly lower than most people are talking about today.”  This should come as welcome news to discouraged first-time home buyers.

Gardner then compares mortgage payments.  Although, without adjusting for inflation, “mortgage payments have increased by 74.3%,” the inflation-adjusted “real payments are 10.7% lower!”.  Of course, there are other monthly payments associated with homeownership like property taxes. They do not change with market fluctuations. But this still indicates “that prices have been able to rise so significantly because mortgage rates have dropped.” Additionally, home prices adjusted for inflation really haven’t skyrocketed, though many seem to think so. Again, this is great news for buyers.

There are some caveats, though. Gardner clarifies that “there are some markets across the country where the picture isn’t quite as rosy.  In these places, prices have risen significantly more than the national average.”  The Seattle metropolitan subunit, which extends around our local area, is one of these places. This is largely from the increasing affluence in relation to the tech boom.  

Not a Housing Bubble

Gardner says the bottom line is “there are quantifiable reasons to believe that we are not in a national housing bubble today. But some markets will experience a significant slowdown in price growth given where prices are today in concert with the spectre of rising mortgage rates.”  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 and mortgage rates continue to climb.

 

Real Estate Market April 8, 2021

First Quarter Market Review for Bainbridge Island

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.

sold pending graph

 

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.

listing sale price graph

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.

Real Estate Market January 27, 2021

Fourth Quarter Review and 2021 Forecast for Bainbridge Island

Bainbridge Island’s real estate market finished 2020 with a strong fourth quarter. We’ve compiled key stats below to provide a comprehensive review of our local market, as well as insights and a 2021 market forecast from Windermere Real Estate’s Chief Economist, Matthew Gardner.

Bainbridge market stats

Our Strong Seller’s Market

It’s still a strong seller’s market here on Bainbridge Island. Inventory remains low while demand is high. Buyers should be aware that the market is in a seasonal slowdown, but not as slow as expected, given COVID-19. There are still many buyers looking to move away from Seattle, but still remain close by; inventory remains low, giving the advantage to sellers. Our Brokers have seen an increase in situations where some buyers are outbid either by price or an all-cash offer.

In 2020’s fourth quarter, the average sale price on Bainbridge Island was up 12.9% year-over-year at a very strong $1.315M. Sale prices continue to hover close to listing prices, indicating strong demand.

Bainbridge sold homes market graph

Bainbridge avg sale price graph

2021 Market Forecast

In his final Monday with Matthew video of 2020, our Chief Economist, Matthew Gardner, shared his 2021 market forecast. He’s optimistic and for some good reasons.

First off, Gardner expects mortgage rates will not rise significantly on a local level, nor will they vary significantly throughout different regions across the U.S. Since mortgage rates are heavily tied to 10-year treasury maturity rates/yields, rates shouldn’t rise significantly until the entire market recovers from the COVID-19 slowdown. Another great sign is that Gardner expects home sales will grow, from 5.55% in 2020 to 5.93% in 2021. That’s “to a level we haven’t seen since 2006,” Gardner explains.  With the continuation of historically low mortgage rates and the consistent increase of home values, 2021 looks bright.

“No! There isn’t a housing bubble forming. But price growth will slow & sellers may feel like it’s a collapse … it isn’t collapsing, it’s just normalizing.”

Matthew reminds us that there are pitfalls to be wary of in this strong market. First and foremost: “we need more inventory.”  With the shuffling to new homes, and the huge wave of “first-time buyers [that] will continue to be a major player in the housing market,” many are making moves in a flood that will not persist. Buying during the pandemic will slowly settle. People are expected to stay in their homes longer, especially homeowners who have chosen to refinance. House values will rise due to the lack of supply, and that may price out many buyers who want to purchase in our area. 

Western Washington’s Market Report

For a big picture glance at how our local market compares, here are highlights from The Western Washington Gardner Report.

WESTERN WASHINGTON HOME SALES

  • Total Sales: 26.6% increase from Q4/2019, but 8.3% lower than Q3/2020
  • Homes for Sale: 37.3% lower than Q4/2019, and 31.2% lower than Q3/2020
  • Pending Sales: up 25% from Q4/2019, but 31% lower than Q3/2020
WESTERN WASHINGTON HOME PRICES
  • Average: $617,475 (up 17.4% from Q4/2019). This continues the trend of above-average appreciation of home values.
  • Interestingly, prices between Q3 and Q4 of 2020 only rose by 1%.  Is there a price ceiling we’re reaching?
  • Mortgage rates will stay competitive as the market continues to charge toward a price ceiling and potential affordability issues.
DAYS ON MARKET, WESTERN WASHINGTON
  • Average: 31 Days (16 days less than Q4 just one year ago)
  • In Kitsap County, average days on market: 17

Conclusion

Yes, it’s a Seller’s Market once again.  Matthew Gardner says, “I am moving the needle even further in favor of sellers.”  Here’s why: Covid-19 continues to push homeowners to stay put while renters flock to the countryside.  The resulting limited supply has “caused the region’s housing market to be incredibly active.” Matthew does warn that there may be “affordability concerns” that could prevent some homebuyers from entering the market and eventually slowing growth.
2021 will continue the trend of working from home, which keeps demand high. This, in turn, will drive sales growth, while affordability barriers will balance our current runaway appreciation for home values.
Real Estate Market October 22, 2020

Bainbridge Island’s Market: Third Quarter Review and Forecast

Bainbridge Island’s market had an incredibly strong third quarter. We’ve compiled key stats below to provide a comprehensive review of our market, as well as insights and predictions from Windermere Real Estate’s Chief Economist, Matthew Gardner.

Our Strong Seller’s Market

It’s a hot seller’s market here on Bainbridge Island. Inventory remains low and demand is still high. In our third quarter, closed sales were up 43.6% year-over-year. Buyers should be aware that multiple offer situations are very common. Our Brokers have seen a significant increase in all-cash offers. In September alone (when the market typically starts to cool down), 37% of all Bainbridge Island residential sales were from all-cash buyers.

Bainbridge market graph Q3

Bainbridge market inventory graph Q3

 

Bainbridge Island market stats Q3

Market Predictions

Although mortgage rates remain historically low and demand is high, our Chief Economist, Matthew Gardner, has some concerns about how this may impact real estate down the road. “We may be heading towards a period where we see houses turn over at a far slower pace as we stay in our homes for longer than ever…this could be a problem as it leads to persistently low levels of inventory for sale, which itself could lead to prices continuing to rise at above-average rates and that would further hit affordability.” As for mortgage rates, Gardner does not expect them to rise significantly any time soon. However, he says, “We should all be aware that there could be consequences to very low rates”.

Western Washington Review

Let’s zoom out a bit and look at our area. Below are highlights from The Western Washington Gardner Report provided by Windermere Real Estate’s Chief Economist, Matthew Gardner.

WESTERN WASHINGTON HOME SALES

  • Total Sales: 11.6% increase from Q3/2019, and 45.9% higher than Q2/2020
  • Homes for Sale: 41.7% lower than Q3/2019, but up 1.6% from Q2/2020
  • Pending Sales: up 29% from Q2/2020

WESTERN WASHINGTON HOME PRICES

  • Average: $611,793 (up 17.1% from Q3/2019). Low mortgage rates and limited inventory are clearly pushing prices up.
  • Prices will continue to increase as long as mortgage rates and inventory levels stay low. If this continues to be the case, affordability issues will become more apparent in many markets.

DAYS ON MARKET, WESTERN WASHINGTON

  • Average: 36 days (an average of 4 fewer days than in Q2/2020 and 2 fewer days than in Q3/2019)
  • Kitsap County’s average days on market: 20

Conclusion

In Gardner’s Western Washington Report, he states that, although we have a strong seller’s market that is very buoyant, he’s “starting to see affordability issues increase in many areas—not just in the central Puget Sound region—and this is concerning. Perhaps the winter will act to cool the market, but something is telling me we shouldn’t count on it.”