The first quarter of real estate sales in Bellingham and Whatcom County ended on a mixed note, with the number of single family homes sold up sharply in most areas from last year, but with average and median prices continuing to drop. January sales were down year over year, but sales picked up in February and were particularly strong in March in most areas.
The chart below shows unit sales, average sale prices and median sale prices over the past 3 years in Whatcom County as a whole.
Now the puzzler: With more demand for homes (25% more sales in Bellingham, 32% more in all of Whatcom County), why did average and median prices drop (around 20% in Bellingham and 11.5% in all Whatcom County)? Did your house drop 20% in value over the past year? Probably not, but the table below will help to demonstrate the dangers inherent in depending on average or median numbers.
Note the difference in the number of sales below $300,000 between March 2009 and March 2010. Also note the average price change in that price point. Now look at the average price changes in the other price ranges. A much larger number of sales at a lower price point has a major impact on both the average and the median. So in answer to the question, above, “No, your house most probably did not drop 20% in value over the past year.” There has been an external factor in the market which has had a major impact, and that is the first time homebuyer tax credit, which started last fall and has had the most impact on the lower end market.
What does the future hold? Probably strong sales through mid June, which will finish up the “bubble” from the tax credits. After that, it will all depend on the economy, both local and national. If you are a buyer, should you wait? Only you can answer that. If you find your perfect house at a wonderful price, why wait? That house might not be there in June. If it isn’t your perfect house, you might want to wait, but remember – you never know where the bottom is until you are on the other side.
Should you wait to sell? I think it depends on when you need to move. If that date is in the next 3 months, I would get my house on the market ASAP, because I think the number of buyers may drop off a bit after April 30. On the other hand, the typical seasonal demand increase may balance the loss of the tax credit. The right answer is that no one knows. You need to make the decision based on your own needs and time frames, accepting that there is insufficient data to make a fully informed decision. With that said, get the best local data you can, specific to your house, from someone qualified to get it and analyze it for you.
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