Should You Be Optimistic About 2026? 

I Sure Am

 

As we head into the new year, I wanted to provide a TL;DR (too long;didn’t read) of some leading economists predictions about what to expect for the housing market in 2026. Overall, they are optimistic. 

 

It’s worth prefacing all this with this famous quote by Yogi Berra: “It's tough to make predictions, especially about the future.” 

 

Windermere Real Estate’s Chief Economist, Jeff Tucker, agreed with both National Association of Realtor economist Lawrence Yun and Realtor.com economist Danielle Hale on the overall trends expected next year. The most important agreed upon predictions are 1) an increased level of inventory, 2) slight decrease in mortgage rates and 3) slow or flat price growth.

 

Let’s quickly look at how the 2025 housing market on Bainbridge Island connects to Windermere’s Jeff Tucker’s Top 3 forecast points for 2026:

 

• EXISTING HOME SALES WILL INCREASE, ALBEIT SLIGHTLY 
  • Through November, Bainbridge Island has seen 291 closed sales YTD which is an increase of +4% YOY and much greater than both 2022 and 2023. I’m optimistic this trend will continue. 

• HOME PRICES WILL STAY FLAT 
  • Through November, the average annual sale price of a single family home on Bainbridge Island is $1,552,000 YTD, which is a decrease of -1.9% YOY. Over the last 10 years the average YOY price change was +8.6% (with just 2023 and 2024 showing negative growth). Over the last 20 years, the average YOY price change is +5.9% (with just six of those years showing negative growth - four of which were 2008 through 2011 when the housing market crashed the national economy). Candidly, at the risk of sounding cavalier, a -2% decrease in average sale price is a rounding error and effectively flat. I’m optimistic that we’ll see positive appreciation.
    
• INVENTORY WILL INCREASE TO PRE-PANDEMIC LEVELS 
  • Through November, there have been 428 new listings YTD which is an increase of +5.2% YOY, the highest since the 485 seen in 2020, and well above the 362 recorded in 2022. The 5-year pre-pandemic average (2015-2019) was 474, so we are approaching that level. I’m expecting an increase next year based on the conversations I’m having with homeowners.  

 

If you’d like to consume the full predictions, Jeff Tucker’s housing forecast can be found here in PDF format, and here on YouTube. The National Association of Realtor 2026 forecast can be found here, and the Realtor.com one can be found here. 

 

I’ll leave you  with this famous quote by Warren Buffet: 

 

“Be fearful when others are greedy, and greedy when others are fearful.”

 

For serious buyers, increased inventory (more options) and flat prices (not enough competition to dramatically drive up prices) makes it a fantastic time to buy. For sellers, it’s crucial to understand that market conditions will (likely) never be like 2021 again, but the market is still strong, and it’s a great time to sell, so long as you approach the process with realistic expectations. 

 

If you’re curious how today’s market conditions apply to your situation, let’s set up a time to talk. And be sure to check out this month’s Bainbridge Island Market Report below for a complete look at our Island’s latest real estate metrics and trends.

 

Happy Holidays, and Happy New Year, 

Jason

 

P.S. Sharing the love of some clients

Jason is a consummate and compassionate professional. He took time to understand our needs and both followed our timing in terms of when we were ready to proceed to markets and managed the timeline once we were ready so that we could list by our desired date. He is honest and knowledgeable. When he doesn't know the answer to a question, he lets us know and follows up with the answer in a timely manner.

       - Peter & Maria Drury