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It has been an interesting year.  They told us the recession was officially over, but our real estate market continued to struggle.  The sales numbers at the first of the year reflected the timing of the tax credit extensions, spiking when the deadline was extended and dropping precipitously when the credits ended.  The influence of the tax credits made it difficult to judge the health of the real market.  While the number of sales in the last quarter of 2010 continued to drop relative to sales in that period of 2009, the lack of a tax credit at that point in 2010 had an impact.

Then in October, there was an interesting change:  overall sales were down from 2009, but up from 2008.  In November, they were up still more, and in December they dropped back a bit, but remained above 2008 by 16% in Whatcom County as a whole and almost 27% in Bellingham.  These were the first consistent, non-manipulated sales increases in several years.  While average and median prices were still down from 2008 levels, in Bellingham 4th quarter average sale prices were up 5.6% and the median dropped just 0.2%.

Changes are shown in the table below.  Note that pricing improved in December over 2009, both in Bellingham and in the County as a whole.

 

Oct 2010

Change from 2009

Change from 2008

Nov 2010

Change from 2009

Change from 2008

Dec 2010

Change from 2009

Change from 2008

860 Bellingham

 

 

 

 

 

 

 

 

 

Units Sold

67

-15.2%

1.5%

50

-43.2%

38.9%

63

-12.5%

28.6%

Avg List

$354,910

5.2%

11.8%

$337,127

-7.6%

1.0%

$357,610

4.6%

4.5%

Avg Sold

$333,712

2.0%

9.4%

$321,519

-8.4%

1.1%

$341,802

4.0%

4.6%

Median Sold

$290,000

6.2%

-0.7%

$279,250

0.2%

-2.0%

$275,000

0.1%

4.6%

CDOM

128

13.3%

-11.1%

116

-7.2%

-23.2%

150

53.1%

27.1%

% of List

94%

 

 

95%

 

 

96%

 

 

Total Whatcom County

 

 

 

 

 

 

 

 

Units

154

-18.1%

5.5%

128

-34.0%

28.0%

134

-20%

16.5%

Avg List

$309,419

4.2%

-1.7%

$281,912

-11.3%

-7.6%

$317,152

8%

-0.7%

Avg Sold

$289,936

0.7%

-3.9%

$268,462

-12.4%

-7.4%

$301,286

7%

-0.6%

Median Sold

$254,495

-1.0%

-7.6%

$249,000

-0.8%

-6.7%

$255,000

6%

-1.0%

CDOM

161

26.8%

5.2%

145

-6.5%

1.4%

165

17%

10.7%

% of List

94%

 

 

95%

 

 

95%

 

 

 

So what does all this mean?  Sales numbers tell us what has happened – and if these continue over the next months, we will know that the light at the end of the tunnel is no longer a train.  The market will bottom out and will improve.  To see if improvement is likely, and the form it may take, we need to look at interest rates, inventory and pending numbers.

Interest rates, while still good, are unlikely to soon return to 2010’s incredibly low levels. This means that a buyer can buy less house for the same payment, and could be an excellent reason to buy sooner rather than later.  In the broader picture, significantly higher rates could put brakes on the market again, although consumer debt load is down, allowing buyers to more easily qualify for a home loan.

Inventory is currently higher than at the end of 2009.  Typical of our market’s seasonality, inventory will increase quickly as sellers bring their homes back on the market after the holiday, get tired of waiting to move or just decide it is time to sell.  If the market is perceived to be improving, inventory will increase faster.  This is good news for buyers, because choices will increase and probably serve to keep a lid on prices. 

Pending sales have been down from last year by 15% to 26% over the past 4 months, but were up 12% in December.  They are up dramatically (21% - 63%) over the last 4 months of 2008.  Some of this increase is due to the increased number of pending short sales, which may take months to close and often don’t (it looks as though fewer than half of pending short sales in Bellingham are closing).  Even making allowance for those transactions, however, pending sales have risen substantially over 2008.

Overall, I am optimistic about our 2011 market.  Fortunately, I don’t see another bubble on the horizon, but I do see gradual improvement, first in demand and perhaps later in pricing.  If you are a seller, the key to a sale is still price & condition.  If you are a buyer waiting for the bottom of the market, you might have missed it, but the recovery should be slow enough to still allow you to make a good buy. 

If your neighborhood would like a presentation or a link to your website of up-to-date information on real estate in the neighborhood, we can provide it – just give us a call.

            www.JohnsonTeamRealEstate.com also includes a constantly updated list of newly listed properties and a list of properties being offered as short sales & foreclosures (REOs), as well as the entire listing database of the Northwest Multiple Listing Service, fully searchable to your specifications.