Bainbridge Island Real Estate 2008
It’s not doom and gloom. It’s 2006 pricing + 3 key obstacles.
Obstacle #1: Financing
30-year fixed conforming loan (to $417,000) 6.5% Conforming Jumbo loan ($417,000-$475,000) 6.75% Jumbo loans used to be similar to 30-year fixed. Now many lenders won’t provide a Jumbo, OR the rate may be nearly 9% OR require a buyer to pay 1 point (1%) and then charge 6.875% (par) for the life of the loan.
Presented to BI Chamber of Commerce By Patti Shannon, Realtor July 16, 2008
Financing: Credit Scores
The 30-year fixed loan of 6.5% requires a credit score of at least 720. Average credit score in WA state is 706 according to Money-Zine.com (national average 692). Lower credit scores require upward loan rate adjustments.
Financing: % Down
The loan rates quoted require a 20% down payment. Lower down payment amounts require upward interest rate adjustments.
Financing: Documentation
The loan rates quoted require income documentation. Stated income mortgages, no-ratio loans and no-doc loans, all frequently used in the early 2000’s, are difficult to obtain and mean upward interest rate adjustments.
Obstacle #2: Fear
Bad news sells newspapers, grabs radio listeners, TV viewers and Internet hits. Note the headline, read the copy. Frequently, the facts aren’t as harsh as the headline. Many buyers have become immobilized; fearful of paying too much – of buying before “bottom.” BUT, real estate is LOCAL!
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Obstacle #3: Misinterpretation of Data
When it’s easy to find financing and all property price points are in high demand, looking at general numbers makes sense. Once the market becomes stratified and demand patterns shift based on variables like those discussed, it becomes more difficult to look at “broad stroke” numbers for the real picture.
NWMLS Statistics Report June 2008 YTD vs. 2007 Residential Sales
YTD 2008 YTD 2007 % Change Homes Sold Median Sale Price 88 $642,000 181 $670,000 -51% -4%
Average Days on Market
108
102
NWMLS Statistics Report 4-Year Trend Residential Sales
2008 2007 2006 2005
NWMLS Statistics Report June 2008 YTD vs. 2007 Condo Sales
YTD 2008 YTD 2007 % Change Homes Sold Median Sale Price 28 $359,500 93 $464,040 -70% -23%
Homes Sold
88
181
169
216
Median Sale Price
$642,000 $670,000 $639,000 $543,000
Average Time on Market
108
102
87
100
Average Days on Market
131
173
NWMLS Statistics Report 4-Year Trend Condo Sales
2008 2007 2006 2005
In general, Bainbridge Island homes are selling at a higher price per square foot in 2008 than they did in 2006.
Homes Sold
28
93
70
35
Median Sale Price
$359,500 $464,040 $260,325 $363,190
Average Time on Market
131
173
116
57
Source: Trendgraphix Reports
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Year to Date 2008 vs. 2006 Sold Homes $300,000-$399,000
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
Sold Homes $400,000-$499,000
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
2006
9 $233 92% 105
2006
29 $233 98% 143
5 $256 92% 92
16 $236 93% 144
Sold Homes $500,000-$599,000
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
Sold Homes $600,000-$699,000
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
2006
31 $244 98% 56
2006
15 $268 98% 46
14 $264 93% 174
8 $251 97% 140
Sold Homes $700,000-$799,000
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
Sold Homes $800,000-$899,000
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
2006
20 $248 97% 88
2006
20 $261 98% 62
7 $272 89% 238
7 $285 96% 89
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Sold Homes $900,000-$999,000
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
Sold Homes $1,000,000$1,999,999
2008
# Sold Year To Date Average Price/Square Foot % Diff Sold vs. Original LP Average Cumulative Days on Market
2006
13 $311 97% 128
2006
23 $329 105% 215
5 $272 94% 289
18 $353 91% 96
Price-Point Summary
Home sales volume is pacing at about 50% of 2006 for homes priced $300,000-$699,999 Slower (35%) for homes priced $700,000$999,999. Price per square foot is higher in 2008 vs. 2006 for all price ranges except $600,000$699,999 and $900,000-$999,999. On Bainbridge Island, the sky is NOT falling!
Bainbridge Island: Great Return on Real Estate Investments!
Year Residential Sold Median Price % Change
2002 2003 2004 2005 2006 2007
$380,000 $414,950 $467,607 $569,000 $661,000 $680,000 9% 13% 22% 16% 3%
Local (Seattle area) Forecast
Rising Exports help Economy Consistent Job Growth Seattle – educated work force in a knowledge based economy “Moderately” Priced West Coast City 2008 – Stabilizing trends 2009 – Moderate rise in sales and prices
Source: Lawrence Yun, Ph.D. , Chief Economist NATIONAL ASSOCIATION OF REALTORS® Presentation at John L. Scott Real Estate, Bellevue WA, 2/7/08
Thank you !
Any Questions?
Patti Shannon, Realtor 206-755-5139 pshannon@johnlscott.com www.johnlscott.com/pshannon
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