Déjà Boom? Could 2025 be COVID-light?

 

 

If you read my newsletter from 2020 through the first half of 2022, you’ll recall that I was left trying to describe what an irrational marketplace that was. The thing most folks remember about those times in the Bainbridge Island real estate market was how many offers sellers would receive and the crazy amount of money that buyers were willing to pay over a seller’s asking price. 

 

The coaches of Windermere Coaching observed, early on in that frenetic marketplace, that it was the engineers and attorneys around the country who were unable to compete in that marketplace because there was, in the expectation of waiving every bit of due diligence to prevail, too much risk involved in participating in the buying process. In other words, it was an irrational marketplace. 

 

So for those risk-averse folks, 2023-2024 was the time to have the upper hand in purchasing a home. Prices softened (but not mortgage rates or sellers’ expectations on prices), and contingencies were back in play (not to pre-pandemic levels, but at least back on the playing field). Simply put, there was value to be found by the buyers who marched to the beat of their spreadsheet analysis (recognizing this is said with 20/20 hindsight). 

 

But as Q1 has come to a close here in 2025, the pulse of the market is a very different one than it’s been since it shifted to a slowdown in the summer of 2022.

 

Back in January of this year, I had buyer-clients win in a multiple-offer situation against three other strong offers. Big deal, right? The notable aspect is that the home had just sold three months prior, and my clients  paid 11% more than it had just sold for in late 2024. Imagine owning a home for three months and making more than 10% on your investment. 

 

What word would you use to describe that situation? My word, or phrase, was “covid-light.”

 

The second half of 2024 felt like one long, collective pause from buyers. I saw it firsthand across my 10 listings during that time. Many were waiting – hoping the Fed would drop mortgage rates (even though the Fed doesn’t directly control them). Some were holding off until the election-year stress passed. Others expected home prices to keep dropping. And many just found a reason – any reason—not to buy.

 

But this year is already playing out differently.

 

How is it different? So far this year, I’ve already had multiple clients write the strongest offer possible and still get outbid. In just the last couple of weeks several listings on the island have received over a half dozen offers on their offer review date. 

 

So is this the irrational behavior we saw back in 2020-2022? Or is it just the simple economics of a low-inventory & high-demand housing market and the fact that buyers have accepted the certainty of the world we are now living in. 

 

My clients sound very rational in the conversations I’m having. But seeing the kind of buying activity we saw become normal in 2021 –my gut reaction is to call it irrational. Maybe in three years I’ll write about how it’s just the rational behavior to be expected in a desirable housing market in post-COVID times.

Please check out my Bainbridge Market Report below to learn about all of January’s metrics and trends.

 

Thanks,

Jason

 

P.S. Sharing the love of some clients

Jason truly was our “real estate whisperer.” His calm demeanor was ever-present, and he really listened to what mattered most so I had the space to process and make hard decisions in my own way. His data-driven approach and straightforward manner appealed to me as someone I could easily work with. Jason kept us on point by setting priorities, bringing in vendors and predicting outcomes. He managed to make what seemed to be a monumental undertaking into a doable process of small increments. I absolutely recommend Jason; his depth of knowledge, careful market research, professionalism and great communication skills ensured steadfast calmness in the middle of what could have easily felt like a tornado!

       - John Hatton & Jon Hewus