The West Sound home sales for May are out and, as I predicted in last month's report, Bainbridge Island home prices continue to slide.
Average home prices dropped 13% Y/O/Y ($548,941 from $630,306), and median home prices tanked 16% Y/O/Y ($467,500 from $559,000). This sample is based upon 38 sales in the month of 5/06.
Kitsap County, as a whole, was up 9% on average and 17% on the median.
The data are over a relatively small sample, so we can expect to see wild swings. It is interesting that the sample size for Bainbridge is the second highest in the county, and is starting to show the slide that just about everyone said would never happen.
There is much work to be done on the downside, as the Seattle area home prices are still relatively bullet-proof, and the economy is still relatively healthy, and interest rates/creative financing heavily favor mindless borrowing.
When Seattle home prices get clubbed, the economy slips, the stock market tanks, interest rates rise, and lending standards come into some form of fiscal sanity, we can expect Bainbridge Island homes to suffer a thorough beating. Ferry tolls and excessive building will also weigh on home prices.
Here is another thought...if there were 38 sales on BI last month, and assuming that 76 different agents split all the commissions, that means that 70% of the RE agents didn't get a payday in May 2006. Of those that did, $16K was the payday prior to marketing costs, and paying their broker.
Average DOM for a BI home last May was 117 days, and that was in a white-hot market. How long do you have to market a home this year?
