The real estate market in 2009 strengthened as the year progressed, ending the year with dramatically higher sales numbers in some areas and categories when compared with 2008. Falling inventory numbers and strong pending sales were the precursors to more sales and relatively stable prices in the county as a whole during the last quarter. At least a portion of this strength can be attributed to the rising number of distressed properties – short sales and bank owned properties (REOs). While homes under $300,000 still constitute over half the market in Bellingham, their overall share of the market dropped in December as a different price point gained new life. Let’s look at some details:
December residential units sold increased by almost 47 % in Bellingham and 41% in Whatcom County as a whole over December of 2008.

4th quarter sales increased by 57% in Bellingham and 50% in Whatcom County as a whole.

Average sale prices for homes sold in Bellingham during December were equivalent to last year, while the median was up 4.5%. In Whatcom County as a whole, average prices were down 5% and the median dropped 3% during the same period.

4th quarter average prices in Bellingham were up almost 7% compared to 4th quarter of 2008, while the median dropped 2.5% (indicative of the high percentage of sales in that under $300,000 range, but the addition of a few more upper end sales). In Whatcom County, the average was down 1.3% and the median down 4.5%.

The chart below shows unit sales, average sale prices and median sale prices over the past 3 years in Whatcom County as a whole.

As mentioned above, short sales and REOs are making themselves felt, and indications are that they are going to have more impact in 2010. The longer employment numbers stay low, the more people are vulnerable to losing or being forced to sell their homes – and that translates into more short sales and REOs on the market. Look at these numbers:
 At the end of 2009, 8.8% of the homes for sale in Bellingham were either a short sale or an REO.
 At the same time, 54.6% of the homes under contract in Bellingham were a short sale or an REO – up from 30.6% at the end of October.
 For the 8 months during which data was reported, 11.7% of the homes sold in Bellingham were a short sale or an REO.
Short sales and REOs tend to be more aggressively priced than the typical residential listing. As long as they continue to constitute a sizable percentage of the market, there will probably be downward pressure on prices.

The table below shows a major shift in the Bellingham residential market from recent months. While the number of homes sold priced below $300,000 was up in December, it was the $300,000 to $500,000 range that contributed the most to the overall increase in sales. Demand for homes in the lower ranges remains strong – as of December 4th, there was just a 3 month supply of homes available for sale in Bellingham priced below $250,000. The really interesting number, however is that there was just a 4 month supply between $250,000 and $500,000. Over $500,000 there was an 11 month supply, based on the number of total sales over the prior 6 months. A buyer said to me last week as we looked at a home priced at $197,000 that had an accepted contract in 5 days, “Homes in this price range are no lower than they were at the top of the bubble!” That is not necessarily the case, but it certainly is true that continued low inventory could help to counteract the effect of the distressed properties – look at the average price change in the ranges from $300,000 to $750,000 in the table below.

For a prediction of what 2010 will bring to Bellingham and Whatcom County Real Estate and a complete list of local real estate statistic visit the Market News Section of The Johnson Team Real Estate website. For specific real estate questions call (360) 303-2734 we’d be happy to help!