The artificial market created by tax credits resulted in the expected fall off the cliff in July, with the number of homes sold in the county as a whole down 22.8% from June sales. The only area that held its own compared to June was Bellingham, where one more home sold in July. Other areas dropped - from 68.8% in Sudden Valley to 52.2% in Lynden and 40% in Birch Bay/Blaine. Ferndale was down just 4.2% in July, although they were caught in August with a drop of 56.5% in sales from their July number. Typically, July sales are higher than June. It was expected that they would be lower this year, but what really matters is how we are comparing to last year in the same months. One would expect July and August to perform less well relative to last year because of the compressed demand in the early summer, and July lived up (or down) to that expectation. In Whatcom County as a whole, 36.6% fewer units sold. There wasn’t one area in Whatcom County that sold more houses in July 2010 than in July 2009. By August, however, things were looking up a bit in most areas, with Sudden Valley & Birch Bay/Blaine up 15.4% & 21.7% respectively, Lynden matching August 2009, and Bellingham down just 4.7%. Ferndale was hit hard – down 52.4% from sales in August 2009 and Nooksack Valley dropped 81.8%. As a whole, the county sold 13.3% fewer homes in August of 2010 than 2009.
Prices continue to wobble down, with average Whatcom County sale prices in August off 10.3% from 2009 and the median down by 8.9%. Bellingham was one of the hardest hit areas, with the average sold price in August down 16.4% and the median off 11.4% from August of 2009. One explanation for this is certainly the continued tipping of the market into the price range below $300,000 and the softening in the $500,000+ ranges, as shown in the table below.
So what’s next? Bellingham pending sales as of August 15 were down 14% from 2009 (they were down 32% in June), while inventory levels were 12% higher than a year ago (they were 16% higher in June). This is the first time since March that these trend lines have reversed, so that is a hopeful sign. Interest rates are still phenomenal. While the mid price ranges are quiet, there are a lot of people looking under $300,000, and more looking over $750,000 than have been.
Have we reached bottom? We won’t know until we are past it, but I don’t think so. We are all aware of the bank owned homes and short sales that establish some expectations of a “good deal”, but perhaps a stronger indicator of continued soft pricing is the expectation of many sellers that the market is not going to change for quite some time. This is having more impact in the mid to upper price ranges, where the demand is less. Pricing under $300,000 is remaining fairly strong.
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.