We’ll start with the basics. Sales are holding up fairly well, with all areas above or close to sales in 2010. While average and median prices rose a bit from the November numbers in most areas the price trend is still drifting downward. This may be the reason the number of sales are holding up: prices are lower and people can afford to buy, even with the more sensible loan requirements.
Sometimes it is interesting to look at the longer view, so I went back in the dusty archives to 2003. At that point I wasn’t tracking quite as much as I do now, but the basics are very interesting. Following is a table showing changes as of the end of each year. It is interesting, of course, to see the changes in number of homes sold and prices over the past 9 years.
Year
12/31 Active
12/31 Pending
Total Sales
Avg Price Sold
% Change Yr to Yr
Median Price Sold
% Change YTY
2003
236
135
1354
$235,648
2004
209
171
1425
$266,393
13%
2005
401
165
1272
$327,309
23%
$285,000
2006
540
157
1197
$368,312
13%
$305,500
7%
2007
497
85
1219
$375,161
2%
$315,000
3%
2008
453
64
881
$359,151
-4%
$299,000
-5%
2009
412
87
912
$339,521
-5%
$288,444
-4%
2010
455
99
788
$334,304
-2%
$278,000
-4%
2011
363
99
806
$317,874
-5%
$264,250
-5%
However, the really interesting part may go beyond the basic comparisons. Look at the Active figures from 2004, 2005 & 2006. They increased substantially. Now look at the Sale numbers for 2005, 2006 & 2007. They dropped substantially from 2004 levels. Throughout 2006, inventory, pending and sale numbers were clear indicators that the market was out of balance and cooling off. At the same time, look at the sale prices. They increased substantially from 2004 to 2006, and continued to some degree into 2007. It seems as though the law of supply and demand, even with easy financing, was not operating as might have been expected. Read On….
Sales were up, sales were down, some prices were up, but most ing were down…and whether they were up or down changes according to how one compares them. If you are confused already, welcome to the club…but let’s try to make some sense of it.
For the most part, the number of homes sold was less than in October, which is normal. The exceptions were Ferndale and Nooksack Valley, where almost twice as many homes sold in November, and Birch Bay/Blaine, where there was a slight uptick. If we compare sales numbers to last November, however, more homes sold this year in every area of the county except Lynden and Mt. Baker. Overall, nearly 11% more homes sold in Whatcom County this year than in November of 2010.
That’s good news. It means that people want to buy and are able to get loans.
Now let’s look at prices, which seem to be an entirely different story. Hang in here and I’ll explain the “seem to be” after we look at the numbers.
From October to November, average and median prices dropped by double digits in every area except Lynden (and the median in Sudden Valley). As a whole, average prices in Whatcom County fell by 16.7%, while the median fell by 5.7%. November 2011 to November 2010 price changes were not quite as dramatic, but almost. Bellingham, Ferndale, Nooksack Valley and Mt Baker saw double digit declines in both average and median prices. Only the Birch Bay/Blaine area saw increases in both average and median, although both Lynden & Mt Baker saw medians go up a bit. For the county as a whole, the average was down 12% and the median down a bit over 11%.
So has the housing apocalypse hit us? I don’t think so. Let me show you why. The following table shows how many Bellingham homes sold in each of 4 price ranges in November 2010 and then in November 2011. (If you wonder why I just use Bellingham numbers for this, give me a call or email and I’ll explain my reasoning.) When I look at this table, there are a couple of numbers that jump out. Look at the total units sold in 2010 in the under $300,000 range…then look at the same category in 2011. Then follow each of those lines over to the “% of Market” column. Pretty dramatic, right?
So what does this mean? Have a lot of homes dropped so much in price that they are now in the under $300,000 range rather than the $300,000 to $500,000 range? Certainly some have crossed that line, but we have actually seen fewer dollars of change in the lower price range. Remember, 1% of a large number is a lot more than 1% of a smaller number. I don’t think that explains the substantial increase in under $300,000 sales, and I will show you why.
November 2010 Price Ranges in $1000’s
Total 2010 November $ Sales
Total Units Sold
Average Sales Price
% of Market
Changes in November Year to Year Distribution of Residential Sales in Bellingham
Last month I compared our market to ping pong balls, sometimes up, sometimes down, sometimes both…just depends on the area. In October
Bellingham unit sales up from October 2010 (to 75 homes from 65) & almost equal to last month (to 75 homes from 77).
Ferndale unit sales down from October 2010 (to 14 homes from 27) & down further from last month (to14 homes from 37).
Birch Bay/Blaine unit sales down a bit from October 2010 (to 13 homes from 15) & down a lot from last month (to13 homes from 28).
Ferndale unit sales dropped substantially from October 2010 (to 14 homes from 27) & from last month as well (to 14 homes from 37).
Lynden managed to about break even – up 3 homes from 2010 and down 3 from September.
But how about the prices, you say. They were bouncing too, with average sale prices in Bellingham and Birch Bay/Lynden down in the double digits from September while Ferndale, Sudden Valley and Nooksack Valley saw double digit increases. If we compare to October 2010, Ferndale and Mt Baker home sale averages were up by double digits, while Birch Bay/Blaine and Lynden were down by those amounts and Bellingham and Sudden Valley were close to holding their own. Want more specifics?
Bellingham prices October 2011 to 2010: average -3.7%; median -12.1%
Whatcom County prices October 2011 to 2010: average -15.8%; median -18.8%
Bellingham prices October to September 2011: average -12%; median -2.4%
Whatcom County prices October to September 2011: average +.4%; median -1.9%
The Bellingham market moved even more strongly into the lower price points, with 64% of the sales below $300,000. Obviously, as prices have dropped, more homes have moved into this category, but it is interesting to note that 4 of the past 6 months have had over 60% of sales at or below $300,000. This is atypical, even as far back as 2006. It certainly isn’t because it is now easier for buyers in the lower price ranges to get loans! During the frenzy, this part of the market was heavily dependent on sub-prime loans. Now, standards for even FHA loans are higher.
There are several speculative explanations for the shift:
Prices for homes at all price points have fallen, moving more of the inventory below $300,000.
As prices have fallen, fewer owners of lower priced homes have been able to sell and take sufficient equity out of their current home to move into the next bracket.
As prices have fallen in areas traditionally providing our incoming purchasers (California, Seattle), our market has localized so our buyers have local incomes and less equity.
Buyers (and lenders) are more aware of the hazards of “over-buying”, so they are purchasing more conservative homes.
The table below shows the change in market distribution from last October
October 2010 Price Ranges in $1000’s
Total 2010 October $ Sales
Total Units Sold
Average Sales Price
% of Market
Changes in October Year to Year Distribution of Residential Sales in Bellingham
<300
$7,380,000
34
$217,059
50.7%
300 to <500
$8,739,727
24
$364,155
35.8%
>500
$3,508,000
6
$584,667
9.0%
>750
$2,731,000
3
$910,333
4.5%
October 2011 Price Ranges in $1000’s
Total 2011 October $ Sales
Total Units Sold
Average Sales Price
% of Market
Unit Change
Average Price Change
<300
$10,575,540
48
$220,324
64.0%
41.2%
1.5%
300 to <500
$7,895,576
20
$394,779
26.7%
-16.7%
8.4%
>500
$2,828,005
5
$565,601
6.7%
-16.7%
-3.3%
>750
$2,805,000
2
$1,402,500
2.7%
-33.3%
54.1%
To read the complete article visit The Johnson Team Real Estate’s Real Estate Update Page. 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.
After a rather scary July in the Whatcom County housing market, August brought a number of pleasant surprises:
More homes sold in Bellingham & Whatcom County as a whole than in any other month this year. This is the first time in 6 years that has happened in Bellingham and only the second for the entire County. June and July typically see the highest number of sales.
August sales matched 2010 sales in Bellingham and were up almost 21% for the County as a whole.
Lynden sales were incredible…up 183% over last year and higher than any year of the past 6.
Ferndale sales weren’t too bad either, doubling from last year and the highest since 2007.
And then there was the pricing story:
Average sale prices in Bellingham dropped 5.8% from 2010 and 9.2% from July of this year.
Average sale prices in all of Whatcom County dropped 6.1% from 2010 and 2.2% from July of this year.
Lynden prices held the best, with the average actually increasing 3.8%.
Sudden Valley was hit the hardest, with both median & average prices down by 35% or more.
So what the heck is going on? Let’s start by going back to the sales distribution numbers for Bellingham. Note the 61.4% of sales <$300,000. Last year it was 50.6%, in 2009 it was 42.4%.
August 2010 Price Ranges in $1000’s
Total 2010 August $ Sales
Total Units Sold
Average Sales Price
% of Market
Changes in August Year to Year Distribution of Residential Sales in Bellingham
Every week we track the number of homes on the market that have offers on them and those that do not and create a ratio we call Pending Ratios. This weeks numbers were great with all areas either remaining stable or up in pendings.
As of Saturday, August 13th, the pending ratio in Bellingham was 20% . Pending is the time frame between when an offer has been mutual accepted between the buyer’s and the seller’s of the home and when the title actually transfers hands. This give the buyer’s time to get the financing, do inspection, review the title reports and more.
To view a complete history of Whatcom County Pending Ratios or for other real estate statistics don’t hesitate to contact The Johnson Team at (360) 303-2734 or by email at Info@JohnsonTeamRealEstate.com
Subscribe by Email
Follow on Twitter
