Bainbridge Real Estate 2025: A Year of Disconnect?

What caused the tension between two opposing forces?

At the risk of sounding a little dramatic, the Bainbridge Island real estate market in 2025 felt like a roller coaster, though not one with big drops or a thrilling finish. Looking back through my monthly market analyses, what stood out most wasn’t any single moment, but how often the story changed over the course of the year.

The year started with renewed optimism. In the first quarter, multiple-offer situations became more common than we’d seen since 2022, and buyer activity felt meaningfully stronger. That momentum shifted in the second quarter as inventory increased, but growing economic and geopolitical uncertainty made both buyers and sellers less confident about where the market was headed.

By the third quarter, the market began to behave in ways that didn’t match typical seasonal patterns. Instead of a late-summer slowdown, sales activity started cooling in the middle of summer. The fourth quarter brought a clearer reality check. By the numbers, the market had largely returned to pre-2020 norms, but this “new normal” didn’t feel normal to many people participating in it.

That tension defined much of the year. The data showed stabilizing inventory levels, relatively steady prices, and more balanced negotiating conditions. At the same time, buyers were hesitant to move forward, sellers who needed to sell were frustrated that it wasn’t 2021 anymore, and sellers who wanted to sell often chose not to when they didn’t get the price they expected. The result was a market that made sense on paper, but often felt confusing, and even uncomfortable.

There were a few themes on the year:

• Inventory Came Back: The long-awaited increase in supply of listings was not met with an equal amount pent-up demand: it exposed how risk averse buyers have become in a higher-cost, less-certain world.
• The Pandemic Broke the Rules: Using Months of Inventory to measure “balance” no longer feels accurate to me, given that the, mathematically speaking, “seller’s market” actually behaved, psychologically speaking, like a “buyer’s market.”
• Buyers Are Rational, And Not Urgent: Risk-averse is a phrase I used dozens of times in 2025 to describe buyer mindset. And the lenders I talk to corroborate that’s the best description buyers are cautious in light of high borrowing costs, stubborn inflation and economic uncertainty. 
• Sellers Had to Relearn Patience: From pricing to days on market to negotiating terms of a contract, sellers have had to, begrudgingly, accept that buyers have room to negotiate. Motivation matters. Some sellers have accepted this and sold, and some have rejected this and decided to wait until the market’s dynamics are in line with their expectations. 
• Prices Didn’t Collapse, They Flattened: The average sale price of a single family home on Bainbridge Island in 2025 was down 2.7% YOY. Not only is that practically a rounding error, but historically speaking, it’s an outlier to see home values decrease year-over-year, so I believe this is something not to be concerned about in the long run (click here to see the stats and decide for yourself).

Our housing market has finally left the shadow of the pandemic and returned to a balanced market, one where both buyers and sellers can get something they want so long as they are willing to make some concessions in the process (a fair negotiation is one where parties meet in the middle). Inventory and pace of sales returned to pre-2020 norms, prices held steady, and advantage quietly transitioned back toward buyers.

In 2025, the Bainbridge Island real estate market settled into a new equilibrium, one that looks statistically similar to the pre-2020 market, but feels very different to buyers and sellers whose expectations were reset between 2020 and 2022.

Please check out my Bainbridge Market Report below to learn about all of 2025's metrics and trends.

Thanks,

Jason

P.S. On a more personal note, I want to share some local organizations and events that I am most excited about in 2026. I am proud to be a board member at the Bainbridge Island Parks and Trails Foundation (six years strong!). Please join me this spring for work parties at both Halls Hills and the Strawberry Hill Bike Park (where my 12 year old loves to ride). I am also sponsoring Teen Night at BARN for the second year in a row and will continue to sponsor Bainbridge Ballet and Spartronics. My goodness–We are lucky to live in this community!