The 2020 Bainbridge Island Real Estate Market was the year of 180’s. The year that the Island did not follow typical historical/seasonal trends and the year that was predicted to have a 6-8% increase in home values, yet ended the year with a 14.8% increase in values. Our new average sales price is now $1,221,000.
Many factors led to the frenzy of 2020 and they were mostly related to COVID – the low inventory, the desire for city dwellers to move to the suburbs for more space, scores of employees now working from home, and low interest rates.. That low inventory was historically low and remains the case today. We only have 19 active homes on the market as of 1.11.2021. This will build, but like in recent years, I predict we won’t get enough to satisfy buyer demand.
Doing my economic homework and research with Matthew Gardner of Windermere, Zillow Economists, Redfin Economists and Realtor.com Economists, they all agree that the 2021 National Market will see tremendous growth in volume (the number of transactions) over 2020. Many of the above also agree that 2021 will be the busiest year in real estate since 2005. Many factors attribute to that, the vaccine, more certainty in the economic markets, schools re-opening in the fall (or sooner) and the prediction that interest rates will rise at the end of 2021.
Yes, I think more sellers will jump into the market in 2021. We are a unique niche market and do not always follow national trends, but I predict that we will indeed get a little more activity and inventory this year as the vaccine roll-out continues and sellers feel more comfortable with listing their homes and going through the process of moving. Sellers here will also be inspired by our average sales price leaping from $1,063,00 to $1,221,000 in just 12 months. Most sellers, those in their homes 20 years or 2 years, will have enough equity to make a profit and move on or move up. Last year our inventory never got above our winter season numbers, which made it grueling for buyers, but this year I predict the numbers will get closer to the spring/summer numbers we saw as the more normal numbers of 2018 and 2019 and make it a slightly less hot seller’s market, but indeed still a sellers’s market. I predict Islanders will see a still healthy 8-10% increase in home values in 2021, but unlikely to get very far into a solid double digit gain. Pricing will be hitting the wall up against affordability for buyers, especially with interest rates predicted to be on the rise too.
And even though our inventory will be higher the buyer motivation to be on Bainbridge Island is not going to cool down, even as things begin to go back to normal-ish. Our inventory will increase, but the steady buyer demand will continue to gobble it up, but perhaps at a slightly less frenetic pace. Hot homes in 2021 may see 8-10 offers versus the 10-12 offers of 2020. As I said in my earlier blog post, I think 2021 will be 2020 Light – we will still be working and wearing masks – we will still be seeing a lot of multiple offers and we will still see the waves of buyers really wanting to be here. As the vaccine rolls out and schools open that is still a positive aspect for the island and our award-winning schools. Some think that once the vaccine has been administered to the majority of the state the offices will re-open and the longer commutes may again be a factor for buyers, however major local companies like Amazon, Starbucks, and Microsoft have already announced that they will be offering employees flex schedules, where Bainbridge Island offers the ideal location again, for those wanting or needing to go into work a couple days a week – close to the city, but with our rural environment and open spaces – and no freeway commute to downtown. Also, even though many buyers took the leap last year many others still were more cautious waiting for the election to be over, waiting for the vaccine to roll out, waiting for a cue from their employer on work-from-home plans . . . I predict 2021 will bring more stability and more answers and translate into continued brisk activity in our little island market. Give me a call or send an email if you’d like to continue the conversation on our market and how it relates to your plans specifically.