Housing market continues red hot streak

Average prices jumped nearly 13 percent in the first half of the year.

If it’s a bubble, it’s got a thick skin.

Bainbridge Island home prices ballooned through the first half of the year, with closed residential and condominium sales averaging $592,000 through the first six months and $612,000 in July, according to the Northwest Multiple Listing Service, which tracks real estate transactions.

Those figures compared to averages of $526,000 last July and $479,000 for the first six months of last year.

The island’s median price – the point at which exactly half the home sales were higher and half were lower – was $546,000 in July.

So where are the bargains on Bainbridge Island?

“That’s a relative term,” said Jim Laws, owner and broker of the island’s Windermere office. “I think that the island right now is kind of what it is. (Higher prices are) pretty market-wide, from what we’re seeing. From what I’m hearing, we’re no different from other ares.

“If anything, we’re a little more sedate. It’s crazy.”

The MLS data shows a steady erosion of transactions in lower price ranges. Through the first six months of 2005, 39 homes sold for less than $400,000 – a 43 percent decline from the previous year.

That’s because homes that were in that price range a year ago vaulted up to a higher tier. Ninety-two homes sold for $400,000-$600,000 in the first six months, a modest increase, while 48 sold in the $600,000-$800,000 range, doubled from the previous year.

Thirty-nine island homes have sold for more than $800,000 so far this year, up from 23 this time last year.

Also, homes are spending less time on the market, with strong demand driving down inventory across the island.

“The (single-family home) market is very tight right now,” said Norm Barquist, real estate agent for Coldwell Banker. “The inventory hasn’t been this low since 1990.”

Of the 119 single-family homes currently for sale and not under any contract Friday afternoon, just 74 are priced below $1 million, which Barquist says is what the majority of buyers seek. Of that portion, a high percentage of buyers are looking in the $350,000-$550,000 range, of which only 24 available houses, meaning “it’s very difficult to make a match,” Barquist said.

The condominium market is quite different from that of single-family homes, as several developments are under way and expected to come on the market in the near future.

Barquist estimates that at least 20 percent of condos are being purchased as investment properties because of the current low interest rates, which recently have been hovering just below 6 percent on a 30-year, fixed mortgage.

Staff writer Tina Lieu contributed to this story.

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