A Slower Market: Aberration or the Future?
Overall residential sales in Whatcom County during the first half of 2014 dropped slightly compared to the first half of 2013; after a strong first quarter, sales in April through June couldn’t maintain the momentum. Prices in most areas continued a slow rise, although they softened in Lynden & Nooksack Valley. For several months, the chatter within the Northwest Washington real estate industry has been blaming slower sales on lack of inventory, but inventory in Whatcom County has been higher than the prior year for every month since last August while pending sales have been lower.
So the big question is, “Why have sales slowed down while prices have increased?” The answer may be in the relative distribution of inventory and demand. Take a look at the tables below.
Distribution of Sales: Note the drop in the percentage of the market in the rows under $300,000 and up to $500,000 from 2013 to 2014. Look at the average price changes in those rows.
Active Bellingham Listings. As noted below, on July 1st, 65.2% of the residential inventory in Bellingham was priced below $500,000, but 81.8% of the sales in June were in that price range. On the other hand, 34.8% of the inventory was priced at or above $500,000, but just 18.3% of the sales were in that range. Perhaps we are looking at an imbalance between what most people want to buy…and what is available.
So what does the crystal ball say about the future?
Demand will remain strong for homes less than $300,000, fueled by good interest rates, the return of out of area buyers and people feeling more stability in their jobs. The sales in the under $300,000 range will contribute to the increases in the $300,000 to $500,000 range as sellers become buyers. The difference between supply and demand in these price points will continue to gradually push prices higher. Affordable new construction should be good, the market for fixers should pick up, and the solid, established, close to the core neighborhoods are going to do very well. I see steady, incremental growth rather than a boom.
Homes in the best condition, in the most desirable areas, at the best price, will sell fastest and for the most money. The market is not going to get hot enough to sell a mediocre house for top dollar. People will wait.
For questions on the Bellingham or Whatcom County Real Estate market feel free to call us toll free at 1-888-713-3056 or email us at info@JohnsonTeamRealEstate.com