After the strong increase in number of units sold in December, January was a letdown, with unit sales down by 26% in Bellingham, although up in Whatcom County as a whole from 2009. February brought the numbers back, resulting in year to date sales nearly even in Bellingham compared to 2009 and up in Whatcom County overall. Bellingham has traditionally been the strongest residential sales area in the county, so the shift to greater strength in the county over the past 2 months has been an aberration – it will be interesting to see how the rest of the year develops. Prices continue to soften, with both averages & medians trending downward in most areas. Some details:
January/February residential units sold decreased by 1.3% in Bellingham and increased 17.4% in Whatcom County as a whole over January/February 2009.
Average sale prices for homes in Bellingham during the first two months of 2010 were even with 2009, but the median fell by 8.4%.
Average sale prices for homes sold in Whatcom County as a whole dropped by 4.7% from 2009, while the median was down 1.9%.
The strongest markets in Whatcom County in terms of residential units sold relative to a year ago were Ferndale and Birch Bay/Blaine, up by 100% and 28.6 % respectively. Their average prices dropped by 6% to 8.6%, but the median in Ferndale rose 12%.
Sudden Valley is holding its own, and Lynden is continuing to struggle.
The chart below shows unit sales, average sale prices and median sale prices over the past 3 years in Whatcom County as a whole.
It is very likely that January was negatively impacted by sales concentrating in the latter months of 2009 prior to the extension of the homebuyer tax credits. Since those tax credits, both for first time buyers and repeat buyers, have been extended, their impact should continue to be felt in pending sales until the “under contract” deadline of April 30 and in sold numbers until the closing deadline of June 30.
Short sales and REOs are gradually becoming a larger percentage of the market, and since they tend to be more aggressively priced than the typical residential listing, they will continue to exert downward pressure on prices.
Price declines seem to be occurring even in the lower ranges. As shown in the following table, in February 2009 86.5% of the Bellingham sales were below $500,000. In 2010, 93.5% of sales were below $500,000. Average prices between 2009 and 2010 dropped 7% for homes sold below $300,000 and 2.3% for those priced from $300,000 to $500,000.
So is it a good time to buy? If someone wants to own a house and finds something they love, they would be foolish to wait. They very likely qualify for a tax credit of from $6,500 to $8,000. It looks as though earlier predictions of rising interest rates were premature, since the economy and employment are still very soft and no one wants to put any impediment in the way of a recovery, but it is unlikely that they will go lower. Will housing prices continue to decline? Possibly, but if you want to buy a home and live in it, you may as well start enjoying it at today’s low prices and interest rates.
For ongoing real estate numbers, go to www.JohnsonTeamRealEstate.com/blog. We update the site weekly with everything from interest rates to market conditions to information from Fannie Mae, the FED and the FDIC. Also, feel free to call us at (360) 303-2734 or e-mail Info@JohnsonTeamRealEstate.com if you want to know more about a specific portion of the market – we track a lot more than we have space to report.