After the first half saw sales and prices stabilize, and in some cases actually rise a bit over 2010, July was a mixed story. The number of homes sold in Bellingham was down 19% and Ferndale was down 30%. On the other hand, every other area except Nooksack Valley was up substantially, from 47% in Birch Bay/Blaine and 67% in Sudden Valley to 100% in Lynden. Average and median prices, on the other hand, were down everywhere but Sudden Valley, where the average was up by 38% and the median by 33%.
From June to July, sales were down almost across the board. Lynden was up by 1 sale and the Mt. Baker area doubled, but all other areas dropped, with Whatcom County as a whole down 15% in unit sales from June. Prices were down across the board, except for the median in Bellingham, which actually increased 13.5% (more about that later)! Whatcom County as a whole posted declines in the average prices of 7% and in the median of 2%.
So in Bellingham, how can unit sales fall, average prices fall and median prices rise by 13.5%? The table below explains. If there are 11 sales, the median is the price of the 6th sale…half are above it and half are below it. As you can see in the table, the biggest unit drop was in the lowest price range, so the median moved up. Relatively speaking, the upper price ranges (particularly from $300,000 to $500,000) lost fewer sales.
July 2010 Price Ranges in $1000s
Total Sales Volume
Total Units Sold
Average Sales Price
% of Market
Changes in July Year to Year Distribution of Residential Sales in Bellingham
<300
$9,341,050
38
$245,817
52.1%
300 to <500
$8,375,250
22
$380,693
30.1%
>500
$6,261,500
10
$626,150
13.7%
>750
$3,299,900
3
$1,099,967
4.1%
July 2011 Price Ranges in $1000s
Total Sales Volume
Total Units Sold
Average Sales Price
% of Market
Unit Change
Average Price Change
<300
$7,190,500
31
$231,952
52.5%
-18.4%
-5.6%
300 to <500
$7,918,500
20
$395,925
33.9%
-9.1%
4.0%
>500
$3,422,600
6
$570,433
10.2%
-40.0%
-8.9%
>750
$2,130,000
2
$1,065,000
3.4%
-33.3%
-3.2%
So why are July numbers so much softer than June? It could be concern over the debt crisis outcome that was recently “settled”. If that is the case, the malaise could hold on for a while since the settlement left many questions unanswered and also pointed up how difficult it is for the federal governing bodies to reach agreement. That does not bode well for resolution of future issues. It could simply reflect uncertainty on the part of borrowers who are following the national economic and employment figures.
Leading indicators of inventory levels and pending sales are still good…inventory is lower than in just 1 of the past 5 years. Pending sales are up 11% over last year, although I do have a concern with the validity of that number. Consistently, short sales have been running 25% to 30% of pending sales…but in July they were only 3.6% of closed sales. In short, they constitute a bulge in the pending sales which tends to just sit there, rather than roll through.
The end of the first half is always an interesting time to look at the sales numbers. We are midway through 2011…what has it brought us, and what may that indicate for our future? As is usual, some areas are up and some are down, but overall we are doing pretty good. The number of sales in the first half of the year were down across the board from last year, but last year we had the homebuyer tax credits during the first half. Average and median prices, on the other hand, were close to last year or up a bit, except in the Sudden Valley and Mt Baker areas, where they have continued to slide. Numbers from Bellingham and the entire county for the past three years are shown in the table below.
YTD
6/30/2009
% Change
Yr to Yr
YTD
6/30/2010
% Change
Yr to Yr
YTD
6/30/2011
% Change
Yr to Yr
Bellingham
Units Sold
393
-16.2%
385
-2.0%
372
-3.4%
Avg List
$340,815
-9.7%
$332,548
-2.4%
$334,131
0.5%
Avg Sold
$326,740
-11.0%
$320,778
-1.8%
$319,178
-0.5%
Median Sold
$290,627
-5.6%
$269,000
-7.4%
$270,000
0.4%
CDOM
132
-1.5%
99
-25.0%
124
25.3%
% of List
96%
96%
96%
Total Whatcom County
Units Sold
837
-18.2%
969
15.8%
823
-15.1%
Avg List
$303,605
-8.7%
$289,109
-4.8%
$290,744
0.6%
Avg Sold
$290,737
-9.9%
$278,515
-4.2%
$277,537
-0.4%
Median Sold
$265,000
-5.4%
$245,000
-7.5%
$250,000
2.0%
CDOM
150
4.2%
123
-18.05
157
27.6%
% of List
96%
96%
95%
A comparison of June 2010 to June of this year is even better, with number of sales even closer to last year – in fact, by the time late reports have straggled in, most areas could match or beat last years numbers.
Distressed property (short sale and bank owned) numbers have stayed pretty consistent over the past year. At the end of June, 10.6% of the Bellingham homes for sale were distressed. 38.6% of the pending sales were distressed, and 16.2% of the sales closed in June were distressed. They don’t seem to be having a big impact on overall sale prices.
Inventory levels in Bellingham are down 12% from last year at this time and pending sales are up by 2%.
Frankly, it looks as though the market is pretty stable. Unless there is some major change in the national economic picture, it seems that it might stay that way for a while.
Some things I am noticing:
Appraisals are more of a problem…either with appraisers not coming up with the value or with underwriters not accepting the appraised value without more comparables. In a market like Whatcom County, where we have multiple small, unique markets, there aren’t always a lot of comparable sales, and that can be a real problem.
There are more multiple offers…sometimes on distressed properties, but often on ordinary sales of desirable homes at good value. As was true in the hot market, not all of these offers last very long….as a seller, it makes sense to look hard at the buyer’s ability and reason for buying before choosing the offer to accept. Some buyers jump in too quickly in the heat of moment, then get cold feet and back away when they have time to think.
Until just a few years ago the term “Short Sale” was virtually unknown. But, in today’s real estate markets short sales are a reality and something that many buyers and sellers have lots of questions about. Below is a question someone had about closing on a short sale that might help you learn more about how they differ from a standard real estate transaction.
Question: I am interested in buying a short sale property, but I have heard it can take a long time for such a sale to close. How fast can it happen if I pay cash?
Answer: You have heard correctly – it can take months for a short sale to close, and in some cases they go to foreclosure first. The way you pay for a short sale property has nothing to do with the amount of time the sale will take. In general, the smaller the lender and the more local the lender, the faster the transaction will close. The larger the lender, the longer the process may be.
Briefly, let’s define what a short sale is and look at what has to happen for a short sale to close. A short sale means that the seller is asking the lender to release the lien on the property for less money than the Buyer owes. Let’s look at a simple process…
Buyer makes an offer to Seller. Seller accepts, subject to approval from the lender AND Seller’s approval of lender’s proposal.
Agreement goes to lender, who reviews it and decides what terms they will accept. In a small, local bank or credit union, one person usually reviews the file, submits it to a committee, they make a decision and send it back. In a large lender, it goes through layers of review before a decision is made…and there are many files going through that review process.
Lender’s decision may be “no” or may be “yes” with conditions. Seller reviews the lender’s response to see if they will accept the conditions. It is not unusual for a lender to agree to release the lien but not release the Seller from the obligation to pay what is owed. Note that a lender doesn’t have to specify they will not release the Seller from responsibility under the note…they simply don’t say they will. Release of the lien does not change the terms of the note. This is a primary reason why some Sellers do not give their final approval to the sale, preferring to go through the foreclosure process or declare bankruptcy.
If the lender agrees to the terms of the agreement between the Buyer and Seller and the Seller agrees to the lender terms, the transaction can proceed to close. The speed with which it can close at this point depends on whether the buyer has already gone through the inspection and financing processes.
Closing times for standard sales with financing are typically 30 to 45 days. If the sale is cash, I have seen them close in days. To learn more about short sales in Bellingham and around Whatcom County visit The Johnson Team Real Estate’s short sale information and property search page.
Tired of sorting through all the articles on the Bellingham and Whatcom County Real Estate Market? Are you looking for the numbers that tell the story? Below you will find the Bellingham and Whatcom County Real Estate breakdown by numbers in terms of sales prices, number of homes sold and days on the market.
Whatcom County – Median sales price, $247,710, up 2.3 percent; average sales price, $269,391, down 1.5 percent; total homes sold, 322, down 21.1 percent; average days on the market, 165, up 18.7 percent.
Bellingham – Median sales price, $275,000, up 8.7 percent; average sales price, $308,375, up 3.5 percent; total homes sold, 153, up 2.7 percent; average days on the market, 132, up 25.7 percent.
Blaine/Birch Bay – Median sales price, $214,750, down 3.4 percent; average sales price, $251,143, down 12.8 percent; total homes sold, 44, down 29 percent; average days on the market, 211, up 1.9 percent.
Ferndale – Median sales price, $236,000, down 3 percent; average sales price, $252,116, down 5.9 percent; total homes sold, 44, down 33.3 percent; average days on the market, 201, 53.4 percent.
Lynden – Median sales price, $279,000, up 3.4 percent; average sales price, $297,741, up 2.6 percent; total homes sold, 27, down 37.2 percent; average days on the market, 201, up 31.4 percent.
Mount Baker – Median sales price, $59,250, down 63 percent; average sales price, $119,486, down 23.6 percent; total homes sold, 20, down 31 percent; average days on the market, 196, up 19.5 percent.
Nooksack Valley – Median sales price, $242,000, down 1.2 percent; average sales price, $227,900, down 7.7 percent; total homes sold, 11, down 35.3 percent; average days on the market, 178, up 29.9 percent.
Sudden Valley – Median sales price, $176,000, down 23.8 percent; average sales price, $194,778, down 21.4 percent; total homes sold, 18, down 33.3 percent; average days on the market, 173, up 74.7 percent.
To learn more on the Real Estate Market in Bellingham and Whatcom Count visit The Johnson Team’s Real Estate Market Update Page.
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.
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