After the arctic weather Whatcom
County experienced in December, it was not surprising that January 2009
residential sales were down from
January 2008 real estate sales numbers. The number of homes sold in Bellingham
dropped 38%, while Whatcom County residential sales were down just 33%,
since Sudden Valley and Lynden actually posted small increases. Average
sales prices of Bellingham homes dropped 38% from January of 2008, although
the median sales price was nearly identical to a year ago. Whatcom County
as a whole was a bit more consistent with last year, as the average sales
price dropped 13% and the median fell 7%.
The smaller the sample (number of homes sold), the less meaningful
a % change is. What can be meaningful, however, is the trend shown
by the monthly numbers.
This chart shows the number of residential real estate sales in Bellingham
by month over the past two years, together with the average and median sales
prices (shown in $1000’s of dollars) in each of those months.
Charts are wonderful because they provide a clear picture of what has happened
in a market, which can give us some clues as to what may happen in the future.
Let's look at what is important in this one.
- Note the shape of the Residential
Units Sold line from January of 2007 through to January of 2008. There
was a distinct rise beginning in March 2008 that topped out in August
and dropped
off sharply in September, ending the year at approximately the same
level where it started. This is a fairly typical seasonal sales curve.
In 2008,
however,
the upward curve was relatively shallow, actually peaked in June, and
ended the year lower than it began. The trend appears to be flat, with
nothing
to suggest that we are going to see a spike anytime soon.
- When looking at the Average & Median Sold Price lines, it immediately
becomes obvious that average prices have remained relatively level throughout
the past
2 years – until October of 2008. In October, average prices didn't pop
back up as they had been doing, and it looks as though the Average Price
Line
has found a new level.
- On the other hand, look at what happened to the Median
Price
Line in October of 2008 and January of 2009. It was almost the same as
the average. What caused the two lines to converge It is actually a
continuation
of a gradual
trend that began in December of 2007. More of the homes that sold were
in the lower price ranges. As the number of sales decline, the presence
or absence
of
just a few upper end sales has a pronounced impact on the average sale
price, but a minimal impact on the median. Foreclosures and short
sales may continue
to pull the median and average prices down as the year progresses.
The primary impact of these types of sales will be in the price ranges
where they are
most prevalent, which at this point still seems to be in the lower
end.
What
does this mean for buyers and sellers For a seller, this is a good
time to get your house on the market. Even with the shallow sales curve
we had in 2008, sales began to increase in February. For a buyer,
this is also
the time
of year when inventory starts to increase, which means you should have
more choices over the next few months than you have had.
Regardless of whether you are buying or selling, it is critical
that you get to know your segment of the market very well. Sellers need
to
price in the
market or expect to still be showing their home in the fall, when sales
begin to decline. Buyers need to be able to recognize good value
when they see
it or risk losing the house they want to someone else. For each of
us, this can be
the best of times or the worst of times – it all depends on what we
make of it.
Below are some additional charts and graphs to aid you in better understanding
the Bellingham and Whatcom County Real Estate Market. If you have any
questions please don't hesitate to let us know, we would be happy to
help.
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