Jackie | 98110
2015 First Half In Review
Summer 2015
A BUSY START TO THE YEAR I hope everyone has been holding on, because the past six months have been some of our wildest ever. Our inventory levels have continued to hover at around half of what is considered normal, so the year started slowly because buyers wanted more choices. In January and February, we closed fewer transactions than in previous years. But in March, things started to change as buyers got off the sidelines. By the end of June, even though our inventory levels remained at historically low levels (on July 1st of this year, there were only 58 active listings, compared to 121 in 2014, 189 in 2012, 261 in 2009 and 140 in 2006), we ended up with more sales in the first half (191 single family homes) than we’ve had in 10 years. And that includes the number of sales we had in the crazy days of 2006 (170 sales) and 2007 (184 sales).
Lightning Fast Sales
How could we close so many sales from such little inventory? Velocity. The median CDOM (Cumulative Days on Market) for the sold homes in the first half of 2015 was 16 days – a very fast turnaround between when homes came on the market and when they sold. The next “fastest” year was 2006 with a median of 47 days. In the dark year of 2008, median CDOM was 102 days.
Sometimes, this kind of velocity requires a crazy environment of multiple offers way above asking price (similar to what can happen in Seattle). Is that happening here? The answer is yes, we are getting some multiple offers but the number is usually more like two or three and often there is only one strong one. And the offers are not hundreds of thousands of dollars over asking price. Between January and June, selling prices averaged 98.5% of original asking prices. Only in one price range ($700K$800K) did we see average selling prices more than 100% over asking and it was only at 100.8%. But the percentage of homes selling at or above asking price was very encouraging. The lowest average (32%) was in the $0-$500K range and, as expected, the highest was 73% for the $700-$800 range. The $500K-$700K range was 62% and the next highest was $1.1M+ at 55%. (In the case of $1.1M+, 45% of the listings did not achieve their asking price.
Speaking of Prices
What is happening with prices? Overall, the median ($660K) is up a modest 8% over last year and is still behind 2007’s $671,250. But we continue to recover from the 2008 “correction.” We peaked in 2007, and bottomed out in 2011 at $515K, but have steadily improved with a 28.2% increase ever since (except for the anomaly year of 2013, when median dropped to $495K). When you look at the selling prices for individual homes from the period of 2001-2004 and compare them to selling prices from these past two quarters, there was an average increase of 153%. When you compare that to 2008-2012, prices have averaged an increase of 128%. This shows Bainbridge as a strong market with good long-term price appreciation and resiliency from “corrections.”
Don’t Listen to Gossip
Active markets spawn rumors and potential misperceptions. Be careful not to get caught up in those. No, our market is not flooded with foreign buyers. And no, you don’t have to pay in cash to prevail in a multiple-offer scenario. Over the past four years (2011-2014), 43.75% of all buyers were Island people “moving around.” In the first six months of this year, locals represented 49% of the buyers in the transactions in our office. Our office had one transaction involving a buyer from another country. Regarding cash offers, sellers do like them because they reduce the risk of transactions not closing and Bainbridge has always had a relatively large percentage of cash sales. However, so far this year, over 60% of our transactions have involved financing.
Jackie Syvertsen Managing Broker 206-790-3600 | jackie@windermere.com Jackie98110.com