After the arctic weather Whatcom County experienced in December, it was not surprising that January 2009 residential sales were down from January 2008 real estate sales numbers. The number of homes sold in Bellingham dropped 38%, while Whatcom County residential sales were down just 33%, since Sudden Valley and Lynden actually posted small increases. Average sales prices of Bellingham homes dropped 38% from January of 2008, although the median sales price was nearly identical to a year ago. Whatcom County as a whole was a bit more consistent with last year, as the average sales price dropped 13% and the median fell 7%.

The smaller the sample (number of homes sold), the less meaningful a % change is. What can be meaningful, however, is the trend shown by the monthly numbers. This chart shows the number of residential real estate sales in Bellingham by month over the past two years, together with the average and median sales prices (shown in $1000’s of dollars) in each of those months.

Charts are wonderful because they provide a clear picture of what has happened in a market, which can give us some clues as to what may happen in the future. Let's look at what is important in this one.

  • Note the shape of the Residential Units Sold line from January of 2007 through to January of 2008. There was a distinct rise beginning in March 2008 that topped out in August and dropped off sharply in September, ending the year at approximately the same level where it started. This is a fairly typical seasonal sales curve. In 2008, however, the upward curve was relatively shallow, actually peaked in June, and ended the year lower than it began. The trend appears to be flat, with nothing to suggest that we are going to see a spike anytime soon.
  • When looking at the Average & Median Sold Price lines, it immediately becomes obvious that average prices have remained relatively level throughout the past 2 years – until October of 2008. In October, average prices didn't pop back up as they had been doing, and it looks as though the Average Price Line has found a new level.
  • On the other hand, look at what happened to the Median Price Line in October of 2008 and January of 2009. It was almost the same as the average. What caused the two lines to converge It is actually a continuation of a gradual trend that began in December of 2007. More of the homes that sold were in the lower price ranges. As the number of sales decline, the presence or absence of just a few upper end sales has a pronounced impact on the average sale price, but a minimal impact on the median. Foreclosures and short sales may continue to pull the median and average prices down as the year progresses. The primary impact of these types of sales will be in the price ranges where they are most prevalent, which at this point still seems to be in the lower end.

What does this mean for buyers and sellers For a seller, this is a good time to get your house on the market. Even with the shallow sales curve we had in 2008, sales began to increase in February. For a buyer, this is also the time of year when inventory starts to increase, which means you should have more choices over the next few months than you have had. Regardless of whether you are buying or selling, it is critical that you get to know your segment of the market very well. Sellers need to price in the market or expect to still be showing their home in the fall, when sales begin to decline. Buyers need to be able to recognize good value when they see it or risk losing the house they want to someone else. For each of us, this can be the best of times or the worst of times – it all depends on what we make of it.

Below are some additional charts and graphs to aid you in better understanding the Bellingham and Whatcom County Real Estate Market. If you have any questions please don't hesitate to let us know, we would be happy to help.