As 2019 comes to a close, here’s a look at our local real estate market for Bainbridge Island, Washington. I also want to take a moment to mention the upcoming change to Real Estate Excise Tax (REET) for Washington state. If you’re thinking of selling property in 2020, it may impact you.
Bainbridge Island’s Current Market
This snapshot shows year-to-date residential market information as well as how our market has changed from 2018 to 2019. The 31% increase in median sales price is certainly noteworthy, as is the average sales price, which has gone up by 34.6%.
Real Estate Excise Tax Change in 2020
Washington state’s Real Estate Excise Tax (REET) is changing to a graduated system in 2020. Real Estate Excise Tax is a tax on the real estate sale and it is typically paid by the seller. Will this new system impact you if you decide to sell your property in 2020? Here’s Windermere’s Chief Economist, Matthew Gardner explaining what this change means and who exactly will be impacted.
The New Tiered System for REET
Currently, there’s a flat rate excise tax of 1.28% with municipalities adding their own tax on top of the state tax. In general, cities add 0.5% so the total becomes 1.78%. With the new legislation, the tiered system will look like this.
If you still have questions or want to discuss your options, let’s set up a time to talk. I’m happy to discuss this further and provide any assistance you may need.
Sunny Skies For Our Summer Bainbridge Market
This summer, our Bainbridge market has really picked up in the last couple of months. Inventory is getting snatched up quickly and there are often still multiple offers, though that’s not as frequent as it was in the past.
- Local agents have sold 183 single-family homes so far this year.
- Of those, 133 were sold in the 2nd quarter, up 3.9% year-over-year.
- In the last 6 months, single-family homes have sold for an average of $1,017,667 up 2% year-over-year.
- June’s absorption rate (the rate at which available homes are sold each month) for all properties was 42.7%, down 26.7% year-over-year, indicating a change toward a balanced market.
- As of July 1st, there were 112 active listings. This is the most we’ve had in the past 5 years at this time. We also have the fewest pending sales (currently 48), so there’s more inventory and fewer sales. Let’s see if this trend continues with consistency toward a market shift.
Buyers are often more selective so understanding their expectations and Bainbridge’s current pricing is important. Many buyers are looking for homes that are in pristine condition. That’s why it benefits you to work with an experienced agent who can guide you through the process.
The Latest on Condominium and Land Sales
While the condominium market has softened, we’re still seeing significant sales with 50 units sold so far this year. June’s average sold price was $491,000. When it comes to land, if it isn’t encumbered by easement issues or similar challenges, then it tends to sell quickly. The average sold price for land in June was $247,000, which is a 51.5% decrease year-over-year. However, my colleagues and I are seeing more activity on vacant land; in June alone, 3 lots were sold and 11 went into pending status.
Moving Toward a Balanced Market
Windermere’s Chief Economist Matthew Gardner anticipates that we will begin to move toward a balanced market. In the past two decades, prices have either been skyrocketing or crashing. “Many [home buyers and home sellers] have never seen a normal market,” Gardner explains. “From a home seller’s perspective, they still have very heady expectations as to what their homes are worth…that needs to be tapered down a little bit. From the home buyer’s perspective, they’re seeing more choice now than they’ve seen in several years.” Despite what some media outlets say when analyzing shorter term averages, it is still a seller’s market and Gardner expects that “home price growth will continue but at a more modest pace.”
If you can dream it, we can find it.
Whether you’re thinking of buying or selling, I’m here to assist you. I can provide you with a wealth of information, from market trends and pricing to local schools and resources.
When you’re ready, I’m just a click or a call away.