There are some odd things going on in the real estate market.

  • Trend lines of average and median prices for the past 3 years have been down, but the units sold trend has been stable.  We crossed the tipping point this month…all trend lines are now heading down both for Bellingham and the county as a whole.
  • With that said, sales for the first two months of the year are up strongly in all areas except Bellingham and Birch Bay/Blaine. 
  • The number of short sale and bank owned properties on the market has been dropping over the past 2 months, and the number of those types of properties sold is down from last fall.
  • The Bellingham market is the largest in the county and has typically been the strongest, but that doesn’t seem to be the case lately.   

Indications of shifts in market activity to areas outside Bellingham started showing up at the end of the year.  Bellingham inventory continued lower than the prior year, but the number of pending sales also started to decline.  In some other areas of the county, however, pending sales were climbing.  Look at the numbers as of the end of February in the table below.

Comparison of Month End Active and Pending Residences in 5 areas

  Feb 2011 Feb 2012 % Change
Active 491 358 -27%
Pending 127 119 -6%
Active 189 146 -23%
Pending 37 51 28%
Sudden Valley      
Active 60 71 18%
Pending 22 24 9%
B Bay/Blaine      
Active 194 157 -19%
Pending 38 42 11%
Active 129 116 -10%
Pending 24 40 67%

So why are pending sales so strong, particularly in Ferndale and Lynden, compared to Bellingham?  In looking at the individual properties represented in these numbers, the increases seem to be driven by new construction.  Ferndale and Lynden went into the recession with large numbers of platted lots available.  Prices on those lots have come down and new houses are being built.  While some of that is going on in Bellingham, it is a much smaller percentage of the market.

The law of supply and demand says that as supply contracts and demand rises, prices will rise.  Let’s see how that is playing out in Whatcom County based on changes in actual sales between 2011 and 2012 in what seem to be our hottest markets.

  Feb 2011 Feb 2012 % Change Year to Year
Units 9 19 111.1%
Avg List $259,922 $250,668 -3.6%
Avg Sold $248,878 $241,848 -2.8%
Median Sold 250,000 $220,000 -12.0%
CDOM 309 141 -54.4%
% of List 96% 96%  
Units 8 18 125.0%
Avg List $311,625 $276,961 -11.1%
Avg Sold $302,888 $266,372 -12.1%
Median Sold $277,450 $239,950 -13.5%
CDOM 178 162 -9.0%
% of List 97% 96%  
Total Whatcom County
Units 94 101 7.4%
Avg List $289,006 $247,686 -14.3%
Avg Sold $275,963 $237,576 -13.9%
Median Sold $247,710 $220,000 -11.2%
CDOM 181 147 -18.8%
% of List 95% 96%  

It looks as though we have a way to go. 

It’s going to take sustained demand over a period of time to get prices up again, but there are positive signs in the market.  I sound like a broken record, but interest rates are still phenomenal, which means more people can qualify to buy a home.  Prices have fallen enough that some properties will actually cash flow as rentals, and more people are looking to invest.  We are seeing more buyers coming from out of town again.  Inventory should start to rise again, as it always does in the spring.  That will expand the choices for buyers who haven’t been able to find what they want. 

So what is coming up?  As always, the best properties will go really fast, and we will continue to see multiple offers on them.  In February, 26% of the homes sold in Bellingham were under contract in less than 30 days and they sold at 99% of the list price.  In Whatcom County as a whole, 23% were under contract in less than 30 days and they sold at 98% of the list price.  The properties that aren’t in good condition and/or are priced too high will continue to sit there…people don’t feel they have to buy now.  They know they have options.  I expect a pretty level market through the spring.

Just in case you haven’t heard, as of March 15th, the new HARP program goes into effect.  It allows homeowners who owe more than their house is worth to refinance at lower rates regardless of the appraised value if the loan is held by Fannie Mae or Freddie Mac and the homeowner is current on their payments.  For details, go to http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx.  To see if your mortgage is held by Fannie or Freddie, go to www.fanniemae.com/loanlookup or http://www.freddiemac.com/mymortgage.  For free help, call 888-995-4673 -  24 hours a day.

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.