First, let’s set the context. During the 1990’s about 2600 homes sold in Whatcom County every year. At the beginning of that decade the average price was $109,351 and the median was $86,350. By 2000, average prices were up to $167,038 and the median was $144,500. In 2000, 2911 homes were sold, rising to 4454 in 2004 and dropping to 2204 in 2009. The average price countywide peaked in 2007 at $340,448 with a median of $290,725. The charts that follows give a visual look at the change.
The number of sales in Bellingham peaked in 2004 at 1425 homes and was around 800 in 2010. Sale prices peaked in 2007, averaging $375,000 with a median of $315,000. Last year Bellingham homes sold at an average price of $334,301 and a median of $277,500.
While prices have certainly been affected by the recession, unit sales have been hit much harder. This trend seems to be continuing, with 1st quarter Whatcom County sales down 21% from 2010, but median prices up 2.3% and the average dropping just 1.5%. Bellingham 1st quarter sales were up 2.7%, with the median up 8.7% and the average up 3.5%. And remember, these numbers are against the period when first time homebuyers were being given a tax credit of $8000 and repeat homebuyers could claim $6500.
The market has definitely become more “normal” in terms of the distribution of sales. More sales have moved into the mid-range as opposed to the lower end. At the same time, the upper end has returned to a more typical percentage of the market than it was several years ago.
Short sales and bank owned properties continue to make up about 20% of the sales in Bellingham, while they formed 14% of homes actively on the market and 35% of those under contract to sell at the end of March. They do not seem to be having a particularly negative effect on sale prices.
Inventory levels are lower than they have been since March of 2006. The number of homes under contract but not yet closed is remaining consistent with numbers seen in March since 2008.
So what does all this mean?
As we go into what is typically the most active real estate sales time of the year, these numbers bode well for sellers and should be a bit of a red flag to buyers. Choices are down and some sellers are getting a bit more stubborn. More buyers seem to be looking for property. We are seeing low offers negotiated into something approaching list price and great properties with multiple offers. On the other hand, it is only the best properties that can demand the best prices – what an idea…that is true in any market!
And that leads me back to the question with which we started, “When will the market be normal again?” My conclusion is that there is no “normal”…there is simply the market. The basics of buying or selling in it are the same as they always have been. The best properties sell for the best prices because they are the most attractive. It was just that for a while we were all afraid we were going to miss the opportunity to buy anything, ever, so we would take whatever we could get and pay whatever it cost. That market isn’t normal, it isn’t sustainable and hopefully it won’t come back. I think we are reaching equilibrium…and perhaps that is what normal is.
For ongoing real estate numbers and details on all the Whatcom County market areas, go to www.JohnsonTeamRealEstate.com. 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.
www.JohnsonTeamRealEstate.com also includes a constantly updated list of newly listed properties and a list of properties being offered as short sales & foreclosures (REOs), as well as the entire listing database of the Northwest Multiple Listing Service, fully searchable to your specifications.