Island home market feeling malaise

Home prices show the lowest gains in five years, data shows.

Despite staying healthy most of the year, Bainbridge’s housing market proved susceptible to the nationwide real estate slump as island sales and prices flattened in the fourth quarter of 2007.

Figures released this week by the Northwest Multiple Listing Service confirmed the comments of Prudential Northwest Real Estate agent Lois Boubong at the Chamber of Commerce’s recent economic forecast luncheon:

“All of you who are trying to sell a home on Bainbridge Island might not agree that the bubble burst,” she said, “but it did lose a lot of air.”

Home prices on Bainbridge were up for the fifth straight year, but by the smallest gain of that period, the NWMLS said.

The median price for homes sold in 2007 was $680,000, compared to $661,000 in 2006. The median price paid for a home in Kitsap County in 2007 was $219,000.

Sixty-seven island homes sold for more than $1 million last year, up from 57 in 2006, and the highest price paid was $4.5 million.

But a sales slump was evident by October. Thirty-two home sold on Bainbridge over the months of November and December, the same number sold in September alone. December sales were down 28 percent from last year.

There are still buyers looking Penny McLuaghlin of Penny’s Team said, but they are hunting hard for bargains in both quality and price.

“The market slowed down,” McLaughlin said. “However, if the home is priced appropriately, it will sell.”

Hampering Bainbridge sales was the difficulty potential buyers have experienced trying to sell their old homes in the markets they were moving from McLaughlin said.

The year ended with 333 homes sold, falling short of 2006’s total of 350 sales.

The island’s slowing sales matched a regional trend, though the northwest continues to be one of the strongest markets in the nation.

The volume of sales in western Washington was down 14.5 percent from 2006 while the volume in dollars was down 8.7 percent according to NWMLS.

At the luncheon last week Boubong predicted a gradual pickup in the market beginning early this year. But this week, with the stock market falling, and rumblings of a recession, she was no longer so confident in a rebound.

“People are listening to all the media reports and its really adding to the uncertainty. They are waiting on the sidelines to see what happens,” she said. “At this point it’s anyones guess as to how it will effect us locally.”

McLaughlin agreed that it will be nearly impossible to predict 2008 home sales. She said the market usually warms up in the spring, but with the stock market and election adding volatility on the national stage, the coming year will be a shot in the dark.

“This is not a fun time to be in real estate,” she said.

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