October home sales in every area of Whatcom County except Birch Bay/Blaine was even or up over last year, and even Birch Bay/Blaine was down by just one house. Average sale prices, on the other hand, were down for the most part, except in Bellingham and the Nooksack Valley area, although median prices dropped in Bellingham. A few details of October sales relative to last year:
Inventory levels continue to fall relative to both last month and last year, although the decline from last year is not as great as it has been for the past few months. Pending sales are up at least 30% in all areas from last year, which is very good, although in Bellingham over 28% of those are short sales, which may or may not close. The higher pending sales and strong closed numbers bode well for a winter less grim than last year’s (as shown on the chart below), although the $8000 tax credit is a wild card that wasn’t around last year. If it is extended, it could continue to support the market, although we may pay for it later if there is no one to step in and buy in the place of those who were saving, but bought early because of the tax credit.
As always, the distribution of sales provides a great deal of insight into why prices go up one month and down the next. Note what has happened to the numbers sold in the two lowest price ranges from October of last year to October of this year. This may well indicate 2 things: an overall drop in prices, which has moved homes from one category to another, and the influence of the 1st time homebuyer tax credit, REO’s (bank owned properties) and short sales, all of which tend to be found more often at those price points.
So now what? Based on the pending numbers, the increase in sales of the last month and the continued low interest rates, it looks as though we could have a relatively strong year end in terms of homes sold in the lower end. I see continued pressure on prices – the high percentage of short sales as a percentage of pending sales certainly shows where buyers’ interest lies, and some ordinary sellers who have been holding to their price point are becoming more motivated to move. If the 1st time homebuyer tax credit is not extended, that could have a negative impact on numbers, as could new federal regulations on a lenders handling of a distressed home which may extend short sale closing times even more. It should be an interesting winter.
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.