Home prices see wild surge

After spending the last year in a holding pattern, the Bainbridge Island real-estate market rocketed upwards in May, with both sales volume and prices climbing significantly from this time last year.

Figures released by the Northwest Multiple Listing Service this week showed that 52 home and condominium sales were finalized in May 2003, compared to 37 a year ago.

The average price jumped almost $100,000 – from $384,000 in May 2002 to $478,000 this year.

Analysts generally attribute the increase to a combination of record low interest rates and the continued doldrums in the stock and bond markets, which make real estate an attractive investment.

Also, lower interest rates mean that a buyer can service a larger mortgage without increasing monthly payments.

The price spike is not simply a function of a few high-priced properties. The median price – the price at which half the homes sell for more and half for less – jumped from $355,000 in May of 2002 to $437,000 in May of 2003.

The hot market shows no signs of abating. Pending sales in May – those where the parties have agreed to the terms but have not yet completed the transaction – increased from 31 in May of last year to 63 in May of this year.

The average asking price for pending sales jumped to $488,000 from $423,000, and the median climbed from $350,000 to $419,000.

Actual sales price is not available until closing, but properties on Bainbridge typically sell for very close to the final listing price, which may be reduced, sometimes significantly, from the original listing price.

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