The 2021 Real Estate Market is waking up on Bainbridge Island and the first listings out the gate are proving that buyers are still motivated to move to Bainbridge. In 2020 we were seeing more ‘typical homes’ have 5-8 offers and a really hot home would have 10-15. Right now in January and the first week of February, we are seeing those more ‘typical homes’ have 10-15 offers. What does this mean? Should you buy now or wait? How long?
Low inventory was our problem before COVID and now it is even lower with sellers still not wanting buyers in their homes, therefore not listing. The vaccine is coming and will change some of this, but I predict we won’t see that shift until later in the year – or maybe even next year. Interest rates are at records lows and predicted to edge up later in the year. The motivation for homeowners and renters to move out of the cities to the burbs is another giant component. Couple all of this with a continued lack of new construction over the past few years and we currently have a perfect storm making it challenging for buyers to buy here right now.
On Bainbridge Island we are very seasonal. Much more seasonal than say our neighboring Seattle Urban Market. During a normal year, many sellers pull their homes off the market at Thanksgiving and most home owners will not list between Thanksgiving and the Super Bowl. And still more sellers will wait until April to list when the weather is better. Right now we have COVID on top of it all. We are a very small niche market and during January of 2021 buyers had one or two homes to look at or offer on in their price range. I predict that this February forward, because sellers are hearing about the frenzy in the market and their agents are urging them to list sooner than later, you will see sellers coming out the gate a bit earlier than normal and buyers will start to have 3-4 homes to look at when they are out shopping.
Yes, I know that sounds like a minor change, but it effectively doubles the inventory in a buyer’s price range. It is enough of a shift to potentially get the number of offers on a given home back down to the 5-6 range, a much more manageable playing field for a buyer. So, to answer my questions from above. Should you write an offer on a house that checks 1/2 your boxes this week or wait a few weeks or months? I say wait just a few more weeks. More options are coming. They will not stack up. Most homes will still sell quickly. And it will still be competitive, but I predict we will see those inventory numbers edge up enough to alleviate some of the hysteria. And there could be a sweet-spot there for very motivated buyers before the typical frenzy of summer buyers arrive in the market.
The graph/data below shows the seasonality of our market. It illustrates the number of active homes on the market over the past five years. Yes, our numbers are extremely low right now, but if history is any indicator they will go up.
And all of that said above, I want to make sure I am painting an accurate picture of the current market. We have been throwing around the term Seller’s Market since 2016-ish and it got really hot and heavy in 2018. But those were the days of 3-4 offers on a hot home. Today’s Seller’s Market of 2021 is not the Seller’s Maker of 2018. It is like nothing we have seen here before and as a buyer you need education, the right mindset, and a skilled agent to help you navigate the waters of this unprecedented market. To offer you a bit of hope and a silver lining to all of this, as a listing agent in this market, when I have a stack of 6 to 12 offers there really are onIy 2 or 3 good/strong ones in the stack.
Watch the market, but if you don’t see a house that gets you super excited wait a few more weeks to see if the market indeed opens up a bit more, as I predict it will. Second, get a good, savvy, LOCAL agent and listen close to their suggestions. And third, if you want YOUR offer to be the at the top of the multiple offer stack give me a call.