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Sales were up, sales were down, some prices were up, but most were down…and whether they were up or down changes according to how one compares them.  If you are confused already, welcome to the club…but let’s try to make some sense of it.

For the most part, the number of homes sold was less than in October, which is normal.  The exceptions were Ferndale and Nooksack Valley, where almost twice as many homes sold in November, and Birch Bay/Blaine, where there was a slight uptick.  If we compare sales numbers to last November, however, more homes sold this year in every area of the county except Lynden and Mt. Baker.  Overall, nearly 11% more homes sold in Whatcom County this year than in November of 2010.

That’s good news.  It means that people want to buy and are able to get loans.

Now let’s look at prices, which seem to be an entirely different story.  Hang in here and I’ll explain the “seem to be” after we look at the numbers.

From October to November, average and median prices dropped by double digits in every area except Lynden (and the median in Sudden Valley).  As a whole, average prices in Whatcom County fell by 16.7%, while the median fell by 5.7%.  November 2011 to November 2010 price changes were not quite as dramatic, but almost.  Bellingham, Ferndale, Nooksack Valley and Mt Baker saw double digit declines in both average and median prices.  Only the Birch Bay/Blaine area saw increases in both average and median, although both Lynden & Mt Baker saw medians go up a bit.  For the county as a whole, the average was down 12% and the median down a bit over 11%.

So has the housing apocalypse hit us?  I don’t think so.  Let me show you why.  The following table shows how many Bellingham homes sold in each of 4 price ranges in November 2010 and then in November 2011.  (If you wonder why I just use Bellingham numbers for this, give me a call or email and I’ll explain my reasoning.) When I look at this table, there are a couple of numbers that jump out.  Look at the total units sold in 2010 in the under $300,000 range…then look at the same category in 2011.  Then follow each of those lines over to the “% of Market” column.  Pretty dramatic, right?

So what does this mean?  Have a lot of homes dropped so much in price that they are now in the under $300,000 range rather than the $300,000 to $500,000 range?  Certainly some have crossed that line, but we have actually seen fewer dollars of change in the lower price range.  Remember, 1% of a large number is a lot more than 1% of a smaller number.  I don’t think that explains the substantial increase in under $300,000 sales, and I will show you why.

November 2010 Price Ranges in $1000's

Total 2010 October $ Sales

Total Units Sold

Average Sales Price

% of Market

Changes in November Year to Year Distribution of Residential Sales   in Bellingham

 

 

 

 

 

<300

$6,601,220

29

$227,628

56.9%

300 to <500

$6,046,108

16

$377,882

31.4%

>500

$2,618,630

5

$523,726

9.8%

>750

$1,150,000

1

$1,150,000

2.0%

 

 

 

 

 

 

 

November 2011 Price Ranges in $1000's

Total 2011 October $ Sales

Total Units Sold

Average Sales Price

% of Market

Unit Change

Average Price Change

 

 

 

 

 

 

 

<300

$8,941,940

44

$203,226

74.6%

51.7%

-10.7%

300 to <500

$3,423,400

10

$342,340

16.9%

-37.5%

-9.4%

>500

$2,350,000

4

$587.500

6.8%

-20.0%

12.2%

>750

$850,000

1

$850,000

1.7%

0.0%

-26.1%

 Look in the bottom right corner of the table, at the first number in the “Average Price Change” column.  Within the lowest price range, the average price is down by 10.7%.  If there were a massive number of homes in the next higher range moving (and sellin)g under $300,000, this average price should go up, not down.  So what do these numbers mean?     

We have been seeing this shift for the past several months, but the percentage of sales below $300,000 was higher in November than it has been in any month since I started tracking it in 2006.  In last month’s article I speculated on the reasons…here’s my updated list:

  • As prices have fallen, fewer owners of lower priced homes have been able to sell and take sufficient equity out of their current home to move into the next bracket.
  • As prices have fallen in areas traditionally providing our incoming purchasers (California, Seattle), our market has localized so our buyers have local incomes and less equity.
  • Buyers (and lenders) are more aware of the hazards of “over-buying”, so they are purchasing more conservative homes.
  • “New Buyers” have been created by the combination of more inventory in the under $300,000 price range and the extremely low interest rates.

And here is another angle on the story:  almost 75% of homes sold in November were under $300,000…but only 45% of currently listed homes are under $300,000.

The biggest take away is that while the price of an individual home has eased down somewhat, it hasn’t dropped dramatically in the last year, but market demand has obviously moved into the lower range.

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.