A Mixed Bag
Each month’s home sales are a reflection of market activity over the prior 6 weeks, and January is probably the best example. It reflects the activity in late November and through December, when people are busy with holidays, family, friends & traveling…which means it typically has one of the lowest contracts written counts of the year. January of 2015 has fit the mold, with sales down sharply from December: a drop of 26% in number of homes sold between December and January. Prices also dipped, dropping a bit over 6% across the county.
If we compare January 2014 to January 2015, however, we see that sales in Whatcom County are up overall by 11.4%, and while the average price climbed just 0.5%, the median was up 6.8%. The most interesting part of the equation, however, was the dramatic difference between the different parts of the county.
The number of sales in Bellingham dropped by almost 16%, in Nooksack by 33% & in Mt Baker by 25%. On the other hand, Ferndale & Lynden posted more than double their 2014 sales. Why?
There are no definitive answers, but two possibilities may be the amount of new construction and the somewhat lower prices for similar homes in Ferndale & Lynden relative to Bellingham.
One thing to remember when looking at percentage changes between larger and smaller markets is the relative size of those markets. Last month in Bellingham, there were 10 fewer sales than last year, resulting in the percentage drop of almost 16%. On the other hand, just 3 fewer sales than a year ago in the Mt Baker area dropped the total sales number by 25%.
Since Bellingham is the single largest market in the County, it is likely to provide the most stable source to judge trends and changes within a market. This is particularly true relative to prices. The average price of a home sold in Bellingham last month was $318,898 (down 6.3% from 2014). But…the median price of a home sold in Bellingham last month was $295,000 (up 1.8% from 2014). So is the Bellingham market rising or falling? Take a look at the table below.
In addition to looking at the changes in average and median numbers, one should look deeper into the distribution of the sales. The average sale price was lower because there were about 80% fewer homes sold over $500,000. The median price was up because homes under $500,000 sold for higher prices. Why does this matter? It matters because when you buy or sell a home and are trying to decide on an appropriate price, what is most important is the section of the market in which that house is located.
If you are a seller, the single most important decision to make is the price at which your house will be marketed. Do your homework. Pricing too high at the beginning can result in less at the closing and a longer time on the market than you could have had.
If you are a buyer, do your homework. A well priced property will get the full price, because another buyer will recognize the value. Don’t let your need to get a “good buy” lose the house for you.
And what does, “Do your homework” mean? Look beyond the national, state, county or even city numbers telling the percentage of change in sales or prices. Find out what houses as close as possible to yours in features and location are selling for and how long it is taking them to sell. If you are a buyer, you need to be doing the same research.
Indications are that the market will continue in its gradual growth. Interest rates are under 4%, loans are available with 3% down, inventory should rise as we go into spring and there is new construction available. The brake on the good news is that inventory is lower than a year ago. We’ll continue to keep you informed.
For more information on local Bellingham and Whatcom County Real Estate including additional charts and graphs visit our Bellingham and Whatcom County Real Estate Sales Breakdown page. Also, feel free to email us at Info@JohnsonTeamRealEstate.com or call us toll free at 1-888-713-3056