A record year for Realogics Sotheby’s International Realty and Seattle real estate in general. The recent 2016/2017 Market Report | Year End & Trends publication highlights the championing counties and neighborhoods from the previous calendar year. A brief glance at this report and you can see that our entire Western Washington region has seen an increase in home values.
Port Ludlow is an unincorporated community in Jefferson County near the mouth of the Hood Canal separating the Olympic and Kitsap peninsulas. The estimated total population in 2014 was 2,461; nearly 70 percent of that population was on social security payments and 44.2 percent were drawing retirement. SFRs comprise 85.5 percent of the local housing stock in Port Ludlow.
Given the market drivers in this location, the supply of homes for sale is often out of balance
with demand, so sellers and their agents need to be especially diligent about pricing and marketing properties. Until 2015, monthly supply provided little guidance to the prospective time on market. In the early summer, however, Port Ludlow moved to a more balanced position. The months in inventory averaged 8.9 in both 2014 and 2015.
Port Ludlow’s location at the eastern end of Jefferson County, just over the Hood Canal Bridge
from Kitsap County, enables it to draw weekend refugees from Seattle and elsewhere around the Sound. As a result, the median sale price of homes in Port Ludlow has exceeded that of Jefferson County at large by 5.5 percent—unsurprisingly, as so much of the county comprises rural areas and wilderness further west. Port Ludlow is one among six of the 24 areas
studied in which prices did not outpace their county medians. Although in this case, not by much: the Jefferson County gain was only 4.05 percent year-over-year. Sellers throughout Jefferson County have tended to price properties too high, but price reductions in Port Ludlow have not reached the levels found to the north or west in the county.
Bainbridge Island in Kitsap County includes Port Madison, Rolling Bay, and dozens of other small communities, as well as the historic town of Winslow. The island’s Bainbridge High School and Eagle Harbor High School are both ranked among the top public high schools in the state by U.S.News & World Report.85 The population has held relatively steady at just over 23,000 since 2010.86 Despite its proximity to Seattle by ferry, Bainbridge Island’s 27.6 square miles available as living space render a population density of only 847 persons per square mile (psm). This is 59 percent less concentrated than Tiburon in California’s San Francisco Bay Area (2,065 psm), and even 39 percent less dense than Anacortes in Skagit County (1,388 psm). Accordingly, 80.8 percent of Bainbridge Island’s housing stock remains single-family.
The island has been a seller’s market since October 2014, and monthly supply spent most of 2015 below two months. The months in inventory As in many other exurban locations, prices tend to be more volatile on Bainbridge Island, as seen in these charts. Yet here again, the island benefits as a bedroom community to Seattle: the median price rose by double digits in each of the past two years, and in 2015 was 137.9 percent higher than the Kitsap County median. In 2014, seller price concessions were more common on Bainbridge Island than later in the past year, underscoring the need for a comparative market analysis and professional guidance when pricing a property for sale.
By a short ferry ride across Puget Sound, the Kitsap Peninsula and its adjacent islands offer waterfront homes; stunning city, sound, and mountain views; and an easy getaway to bucolic scenes westward toward Hood Canal and the Olympic Peninsula. Areas in Kitsap County selected for community profiles include Bainbridge Island and Poulsbo. The former’s proximity to Seattle means that Bainbridge Island in particular enjoys the best of exurban and rural lifestyles: for some, a place of refreshment after the daily commute. For others, a weekend hideaway or reward for retirement. Kitsap County is also home to military families and contractors at the Puget Sound Naval Shipyard at Bremerton.
Like Pierce County, this year Kitsap County shifted from a balanced market to a seller’s market, with average monthly supply tightening to 2.7 from 4.1 in 2014 and 4.9 in 2013. The monthly median home price of all homes on the peninsula reached $285,000 in June 2015, and the annual median settled at $258,500, a 7.71 percent increase year-over-year. The county is sufficiently remote that new construction is more speculatively priced than that found in markets closer in. As a result, monthly median price changes for newly built homes in Kitsap County have seen more volatility over the past two years than new homes in the three counties of the Seattle MSA; nevertheless, the trend in 2015 was higher. New construction peaked in November 2015 at $356,005, and the annual median was $318,100—12.4 percent higher than in 2014, the largest year-over-year increase in central Puget Sound.
At 0.9 percent year-over-year, population growth in Kitsap County was the second slowest among the seven counties surveyed, and 21st among Washington’s 39 counties.19 Nearly 71 percent of homes in Kitsap County are SFRs, compared with 56.7 percent in King County. Slightly less than two-thirds (65.2 percent) of the former’s housing stock is on unincorporated land.20 This is six times the proportion in King County, but not as much as in Island or Jefferson counties—markets that are beyond the reach of most commuters, but provide remote workers and retirees with a soulful refuge from the city.
These markets also provide insight on a commonly heard story of the last two years: the notorious bidding wars for real estate among buyers in western Washington. This was primarily a King County phenomenon—and within King County, it observably varied from one area to the next. Of the other six counties, only Snohomish saw significant amounts of such bidding. Markets further from Seattle were less likely to see bidding wars than seller price concessions as a result of their owners mispricing properties for sale.