First the bad news:  the number of homes sold in Bellingham in November of 2008 was down 41% from November of 2007 and down 38% for Whatcom County as a whole.  Average prices were down 16% in both Bellingham and Whatcom County.  The average prices were impacted strongly by softness in the upper end of the market, as was indicated by the smaller change in median prices - down 10% in Bellingham and 12% in the county as a whole.

Year-to-date numbers give the illusion of greater strength, with unit sales down 28% in Bellingham and 26% overall for Whatcom County.  Average prices year-to-date have dropped just 3.8% in Bellingham and 5% throughout Whatcom County.  What must be remembered is that these numbers include the stronger early months of the year and have not been holding up over the past 2 months.

The following graphs give a visual sense of what has been going on in our real estate market since January of 2007.

Residential Bellingham Unit Sales

 The chart above shows the number of residential units sold in Bellingham by month through 2007 and 2008.  The market saw less bounce during the typical “selling season” and in November declined considerably below the level at which it began in the first quarter of the year.  This is not typical of the normal sales curve, which tends to end the year at about the same point where it began.  The next 2 months should tell us if this is an aberration or an indication that the 2009 sales curve will be lower still.  

Bellingham Average Prices

This chart covers the same time period as the unit sales chart above, but its message through much of the year is more positive.  Average sale prices have been rather sticky, dropping just 3.8% year-to-date from 2007 to 2008.  October and November saw this trend change, at least in part due to softness in the upper end of the market.  While these numbers reflect Bellingham sales, they typically constitute approximately 50% of total Whatcom County sales, and the trend lines are very similar.

Inventory levels, particularly in Bellingham and Sudden Valley, are definitely lower than a year ago, at least in part due to little new construction.  Sudden Valley is seeing fairly strong sales due to the new construction inventory available there, and contractors have been discounting prices fairly heavily.

Another bright spot in the local real estate scene are current interest rates.  Most lenders have FHA programs and rates that are very attractive with as little as 3% down.  I received an e-mail notice from a local mortgage broker this week with 30-year fixed rate home loans available at 5% interest, no points, 20% down.  The key to that one was a credit score of at least 740.  That is the best I have seen, but there are a number of good loan opportunities out there and they are changing constantly, so stay in touch with your lender if you are planning to buy. 

I was asked today if people are still moving here, and the answer is yes.  We are also seeing investors coming into the market, which is a good sign. So what is coming for Bellingham/Whatcom County real estate?  Probably more of the same for some time, although I think the contraction in inventory and lack of new construction will be with us for a while, which will serve to help hold the price point.

In any type of real estate market it is important to know what is going on before you jump in as either a buyer or a seller.  We track many segments of the market so that our clients have the knowledge they need to make good decisions.  It’s one of those services that we consider essential, so if you have a need to know, come talk to us.

Bellingham and Whatcom County real estate sales continued to fall in October from numbers posted in 2007 - except in Lynden, where the number of residential sales doubled over last year.  Other areas of Whatcom County dropped by 26% in Bellingham to 63% & 64% in Ferndale and Nooksack Valley.   Total Whatcom County residential units sold were off 37% (down from 220 homes last October to 138 this year).

Average sales prices in Bellingham dropped substantially as well, from $359,101 in October 2007 to $306,738 in October 2008.  The median drop was less dramatic, from $314,450 in 2007 to $293,500 this year. 

Prices have been fairly strong throughout Whatcom County, so the October numbers were a bit of surprise.  It seems to have been caused not so much by a decline in prices, but by a shift in the price ranges being sold.  The number of residences sold in Bellingham under $300,000 was actually slighter higher than last year, but the number sold from $300,000 to $500,000 dropped by 39%, from $500,000 to $750,000 by 56%, and there were no sales over $550,000, compared to 7 in October of 2007.  

Average days on market increased 16% in Bellingham and 19% in Whatcom County as a whole.  There are also fewer homes selling within the first 30 days of a listing.  32% of Bellingham homes did so in 2007, but just 23% did so in 2008.

These numbers sound pretty grim, but we need to look at the context. The table below shows the percentage decline in the number of residences sold in Bellingham and Whatcom County since last April.  What we see is that the decline has actually slowed in Bellingham, even with the increasing chaos in the financial markets.  Other areas in Whatcom County saw major slides in October 2008 – perhaps the effect of those high gas prices were showing up.

Bellingham and Whatcom County real estate has definitely seen rosier times, but relative to other areas of the country, we are looking pretty healthy.  Advice to Sellers:  pay attention to your list price – particularly in the higher price ranges.  The longer you are on the market, the less money you will get for your house.  The market is always looking for the new blood, and it is very seldom that a buyer will come back and look again even if you drop the price.  Advice to Buyers:  there are some great buys out there, particularly in the higher price ranges.  If you want to move up, this could be an excellent time to do so.  Don’t be afraid to make an offer – we are seeing a lot of negotiation.

If you want to find short sales in Bellingham and Whatcom County, check out our new page at www.JohnsonTeamRealEstate.com/shortsales.cfm.  If you have questions on specific areas, don’t hesitate to contact us at info@JohnsonTeamRealEstate.com – we track much more than there is space to post. 

Don’t forget to put your ballot in the mail early enough to get it postmarked today – if you don’t vote, you can’t complain!   

Real estate sales numbers in both Bellingham and Whatcom County continued to drop in August 2008, with 40% fewer home sales than in August of 2007.  Average prices, on the other hand, varied widely from one area to another, with the average home in Bellingham selling for 14% more than a year ago, while the average home sale in Lynden dropped by almost 20%.  These numbers actually provide an excellent example of why it is important to look beyond the averages if we want a true picture of what the market is doing.  For example, in August 2007, no homes in Bellingham sold for $1,000,000 or more and only one sold in the $900,000 range.  In August 2008, one home sold for $3,300,000 and two others sold  for more than $900,000.  Those differences have a dramatic influence on the average.  The median price in Bellingham increased 0.2%.  For Whatcom County as a whole, average home prices were up 4.1%, while the median sales price dropped by 3.3%. 

Overall inventory levels are remaining stable, with 684 single family homes available for sale in Bellingham in mid August of this year compared to 679 in mid August of 2007.

So how is the market if you want to sell your house?  Actually, not bad, and you control the market for your particular house.  Almost 33% of homes sold in the Bellingham real estate market are on the market 30 days or less before an offer is accepted.  This is a slightly higher percentage than last year.  These houses sold at 97.86% of list price, compared to 99.84% of list price last year.  There are buyers, but they are only buying the best.  If you want to sell, your house must offer the best location, the best condition and the best value for the dollar.  If you don’t have the best location and condition, you had better make up for it in price, and you had better do it sooner rather than later.  Houses that were on the market over 120 days only sold at 93.5% of list price (typically after several reductions from the original).

So how is the market if you want to buy a house?  Very good, provided you don’t dilly dally when you find a good value.  If it’s a great buy and you can’t make a decision, you will lose it.  You still have good interest rates, you have better choices than you’ve had in years, and you really can get more house for your money.  I talk to many people who are waiting to buy at the bottom of the market.  The only problem is that they won’t know where that was until we are on the upswing.

So what is coming?  There are as many opinions on that as there are experts, and in a year some of them will look like geniuses and some will look like dunces.  I just come back to the basics:

1.      Real estate is a long-term investment 

2.      Buy to fit your needs, not just because it is a “good deal”.  If it doesn’t meet your living and financial needs, it isn’t a good deal for you.

3.      If you are looking for a place to live, there is a cost in waiting to buy.  If you want to talk about what that is, give me a call.

In the meantime, we will keep monitoring the market and reporting our observations.  Feel free to call at any time to talk about the market or your particular situation. 

First let’s look at the numbers, then we can try to make some sense of them.


In looking at the tables above, it is obvious that the activity in the market has slowed considerably. Unit sales in June were down almost 35% from June sales in 2007, and were down more than total sales over the first 6 months of the year. On the other hand, prices in June bucked the trend thus far this year and were up a bit, particularly fueled by some strength in the $500,000 to $750,000 range. The $300,000 to $500,000 range continues to show the largest decline in number of units sold, although prices there are also showing small increases. Since that range is still almost 40% of the Bellingham market, stable prices there help to maintain the average and median.

Inventory is still down slightly from last year and pending sales were off 20% from last year at our mid-month check. This is the smallest monthly year-to-year decline in pending sales we have seen since last July, which was when this slowdown began. Interest rates are still good, but they have gradually been creeping up and they are expected to rise further by the end of the year. We don’t anticipate a collapse or the steep price declines that are being forecast for other areas of the country.

The market in Whatcom County outside Bellingham, particularly Sudden Valley (down 60% in volume) and Ferndale (down 52%), has been harder hit, but average price drops were 3 % to 4%. Lynden’s market, on the other hand, dropped less in volume (16.7%) and was up 8.5% in average sold price compared to June of last year. Birch Bay/Blaine, at a volume drop of 37.5%, tracked pretty close to Bellingham, but it suffered an 11% drop in average sold prices.

In summary, remember that these are the statistics for those homes in Whatcom County which have sold. They are the cream of the crop – best in price, location, condition and presentation. Buyers countywide last month paid an average of 97% of the list price for them (98% in Bellingham). Whether you are thinking of buying or selling, do your homework and be realistic in your expectations.

To begin, I want to give you a snapshot of overall market conditions right now.

The last few weeks have been very interesting, what with all the news regarding the home loan market.  At this point the FED has stepped in to keep money available, but the skittishness of investors will keep everything on edge for a while.  The massive amount of home loans due to reach their first interest rate adjustment in October is just the beginning of hundreds of billions of dollars in loans on which the rates will adjust over the next year.  How consumers handle the increased payments and whether financing markets have money available for those who need to restructure debt will have a huge impact on the health of the housing market.  So how does this seem to be impacting our local market?  Let me show you a snapshot.

We track the number of homes for sale and with sales pending every week, and have done so for several years.  Since Bellingham is the largest market (and therefore the most stable), I use it as my canary in the mine.  Following are the numbers over the past 3 months.

What this shows me is that buyers are wary - value is very important to them.  Sellers may be holding off a bit on putting their homes on the market.  But, houses are still selling, and since that is our focus, what do we know about those houses?

First, we know that generally speaking a house is most likely to sell if it is priced below $300,000, although $350,000 to $399,000 has an above average likelihood and the $800,000 to $850,000 range isn’t bad at all. $550,000 to $700,000 is very slow.

We know that of those houses which sold in Bellingham over the past 30 days, 31% of them sold within the first 30 days of their listing date and they sold at 99.6% of list price.  As the time on market increased, the % of sold price to original list price declined.  Even in the slowest sector of the market, 30% sold in the first 30 days at 99.1% of list price.

So what is the bottom line?  Fewer buyers are committing to buy and initial pricing is critical.  Time is not a seller’s friend.  On the other hand, if a home is a good value, a buyer had better make a decision and pay the price, or they will be left to choose from those that are not as good. In a market like this, people buy for 1 of 2 reasons.  Either they walk into a house and fall in love, or they walk into a house and think, “This will work, and if I don’t buy it, someone else will.”  As a seller, you have very little control over the first reaction, but you have total control over the second.  You make the choice.

Currently this week in Bellingham the Pending Ratio is 24%, which is down 2% from last weeks ratio of 26%. The pending ratios are the percentage of homes listed that have pending offers on them.

Below is a graph to view the Bellingham Real Estate pending sales trend.

To view the pending ratios in numberical form broken down by price range click here

Here are this weeks real estate sales statistics for Bellingham, Blaine/Birch Bay, Ferndale, Lynden and Sudden Valley. The following are the pending ratios (percentage of homes listed that have a pending sale) for each of the cities. Click on the city to see a graph of the real estate pending sales trend.

Bellingham: 26% (no change from last week)
Total units pending: 221

Blaine/Birch Bay: 14% (last week was 13%)
Total units pending: 48

Ferndale: 18% (last week was 16%)
Total units pending: 55

Lynden: 17% (last week was 18%)
Total units pending: 32

Sudden Valley: 14% (last week was 13%)
Total units pending: 24

Don’t forget that we always have the lastes real estate statistics on our website under Market News.

Sorry that we’ve missed a few weeks of statistics! Here are the pending ratios (percentage of homes listed that have a pending sale) for Bellingham, Blaine/Birch Bay, Ferndale, Lynden and Sudden Valley.

Bellingham: 26% (no change from last week)
Total homes pending: 213

Blaine/Birch Bay: 13% (no change from last week)
Total homes pending: 43

Ferndale: 16% (no change from last week)
Total homes pending: 50

Lynden: 18% (last week was 19%)
Total homes pending: 34

Sudden Valley: 13% (last week was 15%)
Total homes pending: 20

Here are the pending ratio graphs for houses in Bellingham, Blaine/Birch Bay, Ferndale, Lynden and Sudden Valley. Don’t forget that you can always find current statistics on our website under Market News.

This year seems to be shaping up as a stable period in the larger market areas but softness continues in most of the county.Bellingham sales were down just two units from April 2006 and Ferndale was up three. Year to date, Ferndale was up one unit sale over 2006 while Bellingham sales increased by 14, or 4.4 percent, indicating that these markets are holding their own against last year.

Here are the data charts for Bellingham and Whatcom County

The picture is not so rosy in the rest of the county, with every other area down from April 2006 and year to date. Pending sales as of the end of April indicate that this imbalance will probably continue through May. Bellingham is ahead of last year, Ferndale is slightly off and Lynden is looking a bit stronger. However, Sudden Valley and Birch Bay pending numbers seem to be off significantly from last year.

Inventory levels in Bellingham are still about 20 percent higher than a year ago, but average prices of the homes that sold remain higher than last year – 3.8 percent in Bellingham and 5 percent for the county as a whole.

Average days on market before a sale are up 42 percent over last year for the county as a whole, but this is a good example of how “averages” can mask what is really happening in a market. Of the homes that have sold in Bellingham so far in 2007, 27 percent sold in the first 30 days after being listed for sale, and they sold at 99 percent of list price (typically the original list price). On the other hand, 33 percent of the sales occurred more than 120 days after being listed for sale, and they sold at 93 percent of list price (which had typically been reduced at least once). My conclusion? It pays to price property right in the first place.

On Tuesday Zillow released their quarter 1 report for 2007 home values. Amongst all the numbers was a big headline for our area: Bellingham was ranked in their top 5 metropolitan areas for price appreciation. We placed 4th with 11.7% appreciation after Corvallis, OR, Grand Junction, CO, and Seattle.

This information came as a bit of a shock to me. I have tracked the real estate numbers for this area for years, and while I saw an increase in 2007, it wasn’t close to 11.7%. When I looked more closely, I saw why, and I also saw an excellent example of why we need to ask questions about the source of statistics before deciding how meaningful it is.

Zillow’s sample included 3 bedroom, 2 bath homes of 1500 square feet. Even allowing for a bit of variation (1.75 as well as 2 bathrooms, 1450-1550 square feet of floor space), only 20 of the 518 homes sold in Whatcom County through the MLS during the first quarter of this year fit that criteria.  That is less than 4% of the homes sold. Common sense would seem to dictate that trying to generalize results based on a sample of that size is ludicrous.

I am just finishing up April’s statistics and will post them later today. We also keep an archive of our reports on our website. Feel free to read them and draw your own conclusions.