Danny Varona and Matt Paige of the Paige & Co. real estate team at Realogics Sotheby’s International Realty proudly present this in-depth exploration of the waterfront real estate market on Bainbridge Island. Read on to discover the trends that are likely to shape the waterfront market on the island in 2024.

Welcome

Bainbridge Island’s waterfront homes stand out in the Pacific Northwest due to their unique combination of stunning natural surroundings, exclusive access to Puget Sound, and a diverse range of properties offering both secluded retreats and luxurious estates, creating an unparalleled ‘small town’ lifestyle with convenient access to urban amenities. Our island’s coveted waterfront properties hold appeal for both local residents and those from across the country and beyond.

As specialists focused on waterfront properties, we recognize the significance of delving into this important segment of Bainbridge Island’s real estate market. In pursuit of this goal, we’ve meticulously compiled a wealth of data, analysis, and insights into the post-pandemic waterfront market, particularly highlighting the distinctive dynamics of 2023.

This comprehensive report aims to serve as a valuable resource for prospective buyers and sellers of waterfront properties on the island. Whether preparing to list their properties soon or keeping a watchful eye on market trends for future considerations, this report provides owners of waterfront properties with an intricate understanding of the island’s rapidly evolving waterfront real estate landscape.

Strong Appeal for Waterfront

Even with the declining impact of the ‘escape to the country’ trend, the desire for waterfront living on Bainbridge Island has stayed robust in 2023, driven by buyers adopting new lifestyles following the pandemic lockdowns.

With the sudden increase in interest rates in 2022 and 2023, and a sharp increase in waterfront listings in Spring 2023, many feared that a price correction was in store. However, demand for waterfront homes on Bainbridge remained very strong this past year and it remains a strong Seller’s Market.

There were 52 waterfront sales in 2023, up from 2022’s 39 sales, and almost as many as 2021’s 59 sales. Our data analysis of all waterfront sales on the island this past year revealed the average sales price in 2023 increased compared to both 2022 and 2021. It reached a new high of $2.95M in 2023, up 12% from 2022, and 16% from 2021. Our price-per-square foot analysis revealed a similar trend—waterfront homes sold for an average of $971/SqFt in 2023, up 5% from 2022 and up 13% from 2021.

The scarcity of waterfront homes on the island and their desirability continued to contribute to their premium pricing over non-waterfront homes. In 2023, single-family waterfront homes sold for more than twice that of single-family non-waterfront homes, on average.

We believe the reasons for waterfront prices staying strong are multi-fold. First, nearly 70% of waterfront home purchases in 2023 on Bainbridge Island were made in cash, so this sector was mostly insulated from the interest rate spikes. Second, locally and internationally, there has been a surge of wealth creation in recent years and the affluent still have more money to spend. The capital markets, particularly the stock market, has remained quite strong in 2023 with performance near the highs of 2021. Finally, there is a lifestyle change resulting from the Pandemic that we believe is here to stay: people are spending more of their time at home and putting more of an emphasis on their home lives, even as the world has opened up. What that means is waterfront homeowners can rationalize the expenses of a lifestyle home since they are spending more time in them.

A New High-Water Mark

In 2023, the market for waterfront homes on Bainbridge Island soared to unprecedented heights with several record breaking prices. Prior to 2023, the highest priced sale was marked by our firm’s sale of a waterfront property on Beans Bight Road on the South End of the island, fetching $7.6 million in 2021. 2023 ushered in a remarkable shift, shattering this record not once, but three times, with waterfront sales prices reaching and exceeding the $8 million mark. Among these exceptional transactions was our firm’s listing at 12269 NE Arrow Point Loop, securing a price of $8.3 million amidst competitive offers. This breathtaking residence spanning over 8,000 square feet, positioned at the opening of Manzanita Bay, boasted 1.5+ park-like acres, with nearly 380 feet of pristine white sand waterfront, and a deep-water dock.

The new high-water mark for waterfront properties on Bainbridge Island now stands at $8.8 million. This milestone was achieved through the off-market sale of a sprawling 6,000 square foot home in Rolling Bay, situated on over 10 acres, featuring 280 feet of water frontage—one of the island’s largest waterfront parcels.

Our expertise, coupled with our thorough data analysis of groundbreaking sales over the years, indicates these properties have several of the following traits: 1) Contains a spacious home in exceptional condition - recently built or extensively remodeled, 2) a second home, guest house, or ADU, 3) sits on an expansive lot, 4) has spectacular views, 5) has generous waterfrontage with beach access, 6) has a deep-water dock, and/or a boathouse.

Curious if your property could be the next to surpass this record? Reach out to us today for a confidential consultation on pricing and marketing strategies.

Sellers, Be Patient. Homes Are Taking Longer To Sell.

Although prices for waterfront homes on Bainbridge continued to increase in 2023, the speed and competitiveness in this segment certainly decreased. For instance, waterfront homes on Bainbridge sold for 1.4% less than the asking price in 2023, compared to 2022 and 2021 when homes sold for 0.4% and 6.6% more than the asking price, respectively.

Waterfront homes also took longer to sell - 35 days (on average) in 2023, compared to 22 days in 2022 and 26 days in 2021. Calculating the median Days On Market paints a similar picture with 13 Days on Market in 2023, compared to only 8 days in 2022, and 7 days in 2021.

Bidding wars in 2023 were much less common than in previous years. Our data analysis revealed that only 27% of waterfront listings on the island were in price escalating bidding wars in 2023, compared to 43% in 2022, and 65% in 2021. In other words, the majority of sellers of waterfront homes on Bainbridge in 2023 negotiated with only one prospective buyer. Thankfully, buyers of waterfront homes were very qualified and believed in the value of our waterfront properties on the island so selling prices remained strong.

What are Waterfront Buyers Looking for?

For many, owning a waterfront property on Bainbridge Island is the pinnacle of real estate dreams. The allure of serene views, calming sounds, and direct access to the water is an irresistible draw. Delving into the nuanced preferences of waterfront buyers, we highlight key factors derived from our extensive experience working with buyers and sellers alongside rigorous analysis of recent waterfront sales.

Interior Space Comes at a Premium

Although larger homes have always inherently drawn higher selling prices, the Pandemic exacerbated this effect. Most of us still find ourselves spending much more time at home as we travel less, and go to the office less. In the realm of Bainbridge waterfront properties; averaging 3,100 square feet interior space is still one of the most important features of a home. Our analysis of the 2023 waterfront sales underscores the remarkable influence of interior size, accounting for a substantial 58% of the selling prices. However, delving deeper, it’s evident that not all square footage is created equal. Properties with higher design value, pristine condition, superior build quality, thoughtfully crafted floorplans, and luxurious amenities commanded a significant premium over equivalently sized homes lacking these distinctive attributes.

Beyond the Tangible

In the pursuit of a waterfront home on Bainbridge Island, buyers factor in numerous other elements such as proximity to the water, the caliber of views, orientation, shoreline quality, presence of a bulkhead, privacy levels, neighborhood vibe, lot topography, and that elusive ‘je ne sais quoi’ factor. When determining the optimal price for our clients’ properties, our methodology blends rigorous data analysis with our nuanced understanding of the qualitative factors as we acknowledge that the true value of a waterfront property transcends measurable aspects.

Docking into Value

Deep-water docks represent a coveted aspect of waterfront living, offering the convenience of mooring a boat at home. However, previous years lacked adequate sales data to accurately gauge the value these docks add to waterfront properties. Fortunately, in 2023, seven waterfront homes equipped with docks were listed and sold, shedding light on their impact. Our analysis of these sales reveals a compelling trend: buyers willingly paid a remarkable 22% premium—nearly $617,000, on average—for waterfront properties boasting deep-water docks.

Docks on shorelines that go dry or that become very shallow at low tide do not share the desirability of deep-water docks. Our analysis revealed that in 2023, waterfront homes with non-deep water docks fetched prices nearly akin to waterfront homes lacking docks altogether. This distinction highlights the pivotal influence of a functional deep-water dock in bolstering a waterfront property’s value.

Bank Heights and Access Charms

Waterfront properties on the island, distinguished by their varying bank types—no bank, low bank, medium bank, or high bank—cater to diverse buyer preferences, offering distinct appeals based on the water access and views they afford.

No bank properties, where the home practically kisses the water’s edge, captivate buyers yearning for seamless indoor-outdoor living and immediate waterfront enjoyment. Low bank properties, with their gentle slope to the water, entice those seeking easy water access while providing reasonable protection from coastal hazards. Medium bank properties, offering a moderate slope, often appeal to those desiring a balanced view and water access, providing privacy without compromising scenic vistas. On the other hand, high bank properties, perched atop bluffs and generally offering commanding views, attract buyers seeking breathtaking panoramas and a sense of elevation.

Our analysis of waterfront sales in Bainbridge in 2023 and 2022 show that a property’s bank height is a strong predictor of its desirability. Averaging just over $3.7M in 2023, low bank properties sold for more than properties with lower or higher bank heights. A close second were high-bank properties, averaging just over $3.4M. Medium bank properties ranked 3rd, with an average sales price of nearly $3M. Sales of no bank properties came in a bit lower and averaged $2.2M.

Waterfrontage Gains

Unlike properties secluded from water bodies, waterfront properties on the island boast boundaries that adjoin Puget Sound. Our multi-year data analysis unveiled that the average Bainbridge waterfront property encompasses 108 linear feet of waterfrontage.

Predictably, properties with greater waterfrontage consistently fetch higher prices. In 2023, every 50 linear feet of a property’s waterfrontage corresponded to a substantial $1M upsurge in its sale price. Yet, notably, this price impact dwindled for properties exceeding 150 linear feet of waterfront, indicating that, for most buyers, this figure more than fulfills their waterfrontage aspirations.

Who is Buying Waterfront on Bainbridge Island?

It took a pandemic, the surge of remote work, and a feeling of disconnect with busy city life to send luxury property buyers to the great outdoors—or more specifically, waterfront properties in idyllic small towns like Bainbridge Island. Drawing from our own experience and publicly available demographic data our team gathered and analyzed, we learned that the typical buyer for our waterfront properties in 2023 was a couple with an average age of 58, comfortably situated within higher income brackets. This demographic often comprises professionals, retirees, and individuals seeking an escape from urban life while maintaining proximity to Seattle.

Uncovering their origins involved a blend of our own waterfront sales experience and insights from our colleagues actively engaged in 2023’s waterfront transactions. Our analysis illuminated that the vast majority (69%) of waterfront buyers originated from outside Bainbridge Island. The primary group hailed from within Washington state, mainly from the Greater Seattle Region. Following closely were out-of-state buyers, predominantly from California, Colorado, Texas, and Oregon. While international buyers remained a smaller segment, their presence is notably on the rise compared to previous years.

Interestingly, the second significant cohort of waterfront buyers (31%) already resided on Bainbridge Island, often in landlocked homes, choosing to ‘upgrade’ to the captivating waterfront lifestyle. A small minority of the islanders already lived by the water and made a move to another waterfront neighborhood on the island.

The primary intention of the majority (64%) of waterfront buyers in 2023 was to use the property as their primary residence. Second and third home purchases were more common among out-of-state buyers. Notably, investor-driven purchases were considerably rare in the realm of waterfront real estate.

Understanding the diverse profiles of buyers eying Bainbridge Island’s waterfront homes is an invaluable compass in steering our listing strategies for our seller clients. This insight guides pivotal decisions, from gauging necessary property upgrades before listing to crafting tailored staging that resonates with prospective buyers’ aspirations. It informs our meticulous planning on where and how to showcase the property, ensuring it resonates with each buyer segment. Whether it’s accentuating the tranquil retreat for city escapees or emphasizing the recreational potential for those seeking outdoor adventures, this buyer knowledge is a cornerstone of our strategic listing approach.

Optimal Timing to Sell Your Home

“When is the prime moment to list my waterfront property on Bainbridge?” This question is a frequent inquiry among waterfront homeowners contemplating a sale. After all, determining the ideal month to list can significantly impact the selling price, speed, and overall terms.

Our waterfront market rhythmically aligns with the changing seasons. Spring typically emerges as a popular time for Bainbridge Island waterfront listings due to improving weather and anticipated pent-up buyer demand. While Spring is certainly a great season to list, it is often a tad too early. For example, May 2023 witnessed a spike with 11 new waterfront listings, the highest for any month in the year. However, homes listed in Spring 2023 took almost twice as long to secure buyers compared to those listed in the Summer. Hence, we recommend sellers, if their timelines allow, to consider listing post the Spring rush for a competitive edge.

Summer reigns as a topnotch season for listing, though July stands out oddly. Despite being mid-summer, July historically registers lower waterfront listings compared to June and August due to summer distractions, travel schedules, and kids being out of school. For example, our data analysis revealed that in 2022 and 2021, there were only 2 and 3 new waterfront listings in July, respectively, compared to 8 in June in both years. On the demand side, buyer activity in July can fluctuate significantly, making it a hit-or-miss month. For example, in July 2023 and 2022, fewer waterfront listings went pending compared to other summer months in those years, while July 2021 saw more pending listings than any other month, tied with August. Our strategic advice for Summer listings weighs heavily on anticipated buyer and listing activity, sometimes dissuading a July listing date.

Contrary to common belief, early Fall shines as an opportune season, if not the best, to sell a waterfront home on Bainbridge. Many hesitate to list post-August, assuming the end of the waterfront season. However, our three-year analysis indicates sustained buyer interest and faster sales in the Fall compared to other seasons. For example, in 2023, Fall-listed homes secured buyers within an average of 12 days, outperforming the 15 days of Summer listed homes. The limited quantity of Fall listings amid continued buyer demand contributes to this trend, aided by accurate listing prices thanks to ample recent sales data from Spring and Summer.

Winter, including late Fall, ranks as the least favored time to list or purchase waterfront properties. Homes that hit the market during this period often experience prolonged wait times compared to other seasons, primarily due to weather impact, reduced daylight hours, holiday distractions, and a diminished waterfront lifestyle showcase.

With our close involvement in buyer-seller dynamics of waterfront homes on the island, we maintain a pulse on market movements, gauging buyer activity and upcoming property listings. If you’re considering a 2024 sale, reach out for a private and confidential listing consultation to discuss timing.

What’s Ahead

22023 has underscored the remarkable resilience of Bainbridge Island’s waterfront real estate market amid challenges such as high interest rates, economic uncertainty, and a subdued real estate landscape. As we set our sights on 2024, the prospects for buyer demand for our island’s waterfront homes will be influenced by various factors.

Firstly, we anticipate a sustained demand for waterfront properties in 2024, especially among buyers still actively engaged in the workforce, contingent on the continuation of flexible work-from-home policies. Our island remains a beneficiary of the “escape the city” trend, facilitated by the surge in remote work, rendering our waterfront homes more accessible to both in-state and out-of-state buyers. The reliability of the Ferry system is a key consideration for those commuting to Seattle and the Eastside or traveling via SeaTac airport.

Secondly, the appetite of waterfront buyers to invest in a waterfront home will be linked to the performance of financial markets, particularly the equity market, amidst national and global issues like the presidential election and overseas conflicts. The widely predicted decline in mortgage rates for 2024 is poised to positively impact the waterfront market, even though its influence may be somewhat mitigated due to the high percentage of cash offers in this market.

Barring unforeseen events, we foresee a fairly typical waterfront season in 2024—commencing in early spring, reaching its peak in late summer and early fall, and concluding in late fall with an estimated 50 annual sales. We have already witnesses a handful of sales in the first month and a half of 2024, suggesting healthy buyer demand as we head into the Spring selling season.

Given the elevated costs of construction and increased permitting complexity, a substantial premium is anticipated for waterfront homes in excellent condition. Sellers of waterfront properties requiring significant updates may encounter more moderate prices and prolonged days on the market.

The evolving climate remains a driving force for waterfront buyers, influencing decisions with a focus on sustainability and environmental awareness.

Waterfront properties on the island are poised to outperform non-waterfront counterparts, fueled by the allure of iconic Pacific Northwest vistas, abundant recreational opportunities, proximity to Seattle, and a lifestyle shaped by our unique location.

Buyers of waterfront properties are expected to exhibit increased discernment. Recent changes in Washington state agency laws, effective in 2024, will likely lead buyers to be more selective in choosing brokers for the purchase of specialized properties like waterfront homes. Sellers are urged, now more than ever, to carefully select a listing broker capable of guiding them through the preparation, marketing, and negotiation of such a valuable asset.

For those considering the sale of their waterfront property this year, we extend an invitation to meet for a confidential listing consultation. Our tailored selling plan is crafted to showcase the distinct allure of your waterfront home, attracting the right buyers locally, nationally, and beyond. We look forward to the opportunity to collaborate on a successful waterfront property sale.

Sales of Waterfront Homes in Bainbridge (2023)

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When a Bainbridge Island waterfront home is marketed through the Sotheby’s International Realty® network it immediately begins a journey to worldwide exposure. Many of the homes our firm has sold have been featured in national publications like Curbed, The New York Times, The LA Times, and The Wall Street Journal. Only our firm offers clients exclusive partnerships with top-tier local publications, including the Puget Sound Business Journal “Home of the Day” program.

DANNY VARONA
(206) 979-6350
Danny@DannyVarona.com

Danny Varona has earned a reputation for his unparalleled work ethic, earning him the #1 spot for Top Producing Broker in 2023 at the Bainbridge Island office, and #2 at the Seattle office in 2022. RealTrends ranked him in the top 1.5% of agents in WA state.

Clients consistently commend Danny for his unparalleled service and client advocacy, describing him as kind-hearted, trustworthy, and an attentive listener. A military veteran embodying the principle of ‘Service Before Self’, Danny serves his clients with unwavering fiduciary responsibility.

Specializing in representing waterfront, unique, and high-end homes in Bainbridge Island and Seattle, Danny earned GUILD recognition in 2021 from The Institute for Luxury Home Marketing; a distinction that connects him to exclusive resources and a network that enhances his ability to sell lifestyle homes.

Danny’s unique blend of robust analytical skills and exceptional interpersonal abilities positions him as an effective negotiator and problem solver.

Holding certifications as a Certified Real Estate Negotiation Expert, coupled with degrees in Psychology, Economics, and Engineering, he brings a well-rounded approach to real estate.

Formerly an advertising researcher at Microsoft, Danny aligned with Realogics Sotheby’s International Realty through a shared vision of elevated service, global exposure and a commitment to innovative marketing endeavors to provide his clients with a competitive edge. He and his listings are regularly featured in publications like The Wall Street Journal.

As a bilingual and triple citizenship holder born in Cuba, educated in Canada, and raising a family in the USA, Danny embodies the ‘international’ in Sotheby’s name. Danny splits his time between Seattle and Bainbridge Island. He enjoys quality moments with his wife and daughter, salsa dancing, boating, and remodeling properties.

MATT PAIGE
(360) 259-1804
Matt.Paige@rsir.com

Matt Paige is a real estate agent with 8 years of experience in his hometown of Bainbridge Island, where he works with Paige & Co., a top-producing team founded by his father, Dennis Paige. He enjoys the camaraderie of being in the family business and leverages over 40 combined years of experience on Bainbridge, proudly serving as the next generation in their real estate excellence.

During his time at Realogics Sotheby’s International Realty, Matt has been a part of over 200 transactions, amassing a total value of $250 million. He utilizes the firm’s cutting-edge technology and vast marketing resources to find success in each transaction. That success is consistent as the Paige & Co. team regularly ranks as one of the best in the Bainbridge Island office; #1 in team production in 2023, #2 in 2022, #1 in 2021.

Listening carefully to clients is the cornerstone of Matt’s business and he values getting to know each unique need so he can provide a tailored experience. Matt actively works to educate every client, lending to a smooth and stress-free process that yields impressive value on home sales and purchases.

Whether helping clients understand how to make good buying decisions in a dynamic market or how to properly prepare and price a home to maximize its value, Matt provides personalized experiences catered to each client.

After earning a Bachelor of Arts degree from the University of Washington where he majored in political economics, Matt moved back to Bainbridge Island to start a family of his own. He has two daughters and one son, and is proud to have the opportunity to raise them in the same community he grew up in.

Matt enjoys spending time with his family and being outside, whether it’s on the water, in the mountains, or if he is lucky, on the golf course. As a native of the Northwest, he is excited to represent the next generation of brokers successfully uniting extraordinary local homes with extraordinary people from around the world.