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.
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.
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.
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.
Everything You Need to Know about Title Insurance
Title insurance is a policy that protects you from potential problems when acquiring real estate. When you buy real estate, you’re also buying all of the assets and liabilities associated with that property. So title insurance protects you from any past title problems. Some of these problems can include forgery, fraud, liens, and prior mistakes in legal documents.
Types Of Title Insurance
There are two main types of title insurance: lender’s title insurance and owner’s title insurance. Most lenders require the borrower (homebuyer) to purchase a lender’s title insurance policy, which protects the lender. It is important to note that a lender’s policy will not cover the homebuyer from any problems with the title. To protect yourself, consider purchasing owner’s title insurance.
Owner’s title insurance will protect you, the homebuyer, from any aforementioned issues. A title search examines public records and legal documents to confirm the legal ownership of a property before a transaction takes place. It is usually performed by an attorney or a title company. Although this procedure will often identify any title issues or mistakes, sometimes mishaps occur. These mistakes can be costly down the road, so buyers often purchase title insurance to protect them and their mortgage lender from financial loss if there’s a problem with the title after the sale.
Common Claims
Some common claims filed against a title are back taxes and liens. Liens are a right to keep possession of property belonging to another person until a person’s debt is cleared. It is rare for title companies to miss a lien, but if that does happen, it can cause quite a legal headache for the homeowner. Title insurance can protect from any issues that arise due to uncleared liens.
A typical title insurance policy covers the following hazards:
- Ownership by a party other than the one who sold it to you
- Incorrect signatures on documents as well as forgery or fraud
- Mistakes in legal papers and inheritance
This type of policy also ensures that there aren’t any outstanding liens for the property. Unlike traditional insurance policies that protect you from future events, title insurance protects you from past events that may not have come up during the purchase of the property.
Title Insurance in Washington State
In Washington state, the owner’s title insurance policy is usually optional and not required by law. You can choose to buy a policy that will cover the full price that you paid for the property. The Office of the Insurance Commissioner has more information about the process of purchasing title insurance in Washington state.
It is important to note that the only time it is possible to secure the owner’s title insurance is at closing. You will not be able to purchase a policy if you discover an ownership issue after you’ve bought the property and ownership has been transferred to you.
Bottom Line
Having title insurance protects both the buyer and seller from potential risks that can lead to a considerable amount of stress down the road. It’s important to talk to your real estate agent about these details. They should be able to guide you through the process and provide additional insight. Our local Windermere agents are also here to answer any questions you may have.