Paul's Bellingham Blog

My thoughts on Bellingham, the Real Estate market, and more

An Incredible Look at Bellingham and Whatcom County

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This video has some incredible shots of Bellingham, Bellingham Bay and Mt Baker. Amazing!

USDA (Zero Down Loan) Changes are delayed!

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The USDA Rural Development program, which is designed to make rural housing more affordable, offers one of the only loans available today that is Zero Down. A rate today with USDA is zero down with about a 3.0% rate locked for 30 years! So really a program that makes buying cheaper then rent in most cases right now.

Currently the only area excluded from the map is the city of Bellingham, and in Skagit County, the city of Mount Vernon. The map is changing, and the city limits of Ferndale, Lynden, Burlington, and Anacortes will soon be excluded as well when they create the new map. The GOOD news is that they just delayed this change from October 1st, to March 27th, 2013! This gives zero down home buyers plenty of time to find to find a home if they want to take advantage of the USDA loan product while it is still available in these Skagit and Whatcom County cities.

If you have questions about this, feel free to give me a call at 360-920-5901, or contact me here.

Bellingham makes list of 10 “happiest cities” in the west.

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Sunset magazine has listed Bellingham among it’s 10 “happiest cities” for 2011 on the west coast. This is the towns they consider to the best places to live (and find happiness). Other cities listed included Salt Lake City, Portland, and Salt Spring Island, B.C.

Bellingham made the list with it’s 65 miles of interurban trail, and proximity to mountains and the sea.

Every year Bellingham is listed in multiple publications in a top 5 or top 10 list. The lists have included “best places to live” “best places to retire”, best small cities to do business”, “cleanest air” and the trend continues with “the happiest”.

It comes to no surprise for those of us that live here..I have honestly never heard anyone say they did NOT love living here!

I think it also bodes well for the Real Estate market when these articles pop up. The positive publicity year after year must make some (small) impact on the popularity of Bellingham as a relocation destination.

Bellingham Washington 2010 Overview

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December statistics are out, and they are mixed, but definitely positive over all. Pending sales were up 28% in Bellingham in December of 2010, compared to December 2009 (50 pending sales compared to 38 a year ago).

You can see from the chart above, (following the red line of pending home sales) the winter of 2009, through 2010 was a very up and down period. To make sense of the chart above, the $8,000 tax credit was set to expire in October of 2009 (see the bump in pending sales in October). Then it was extended, so we saw another boom in sales in April of 2010 at the deadline of the new extension. Sales jumped to there highest level in a few years, and prices actually spiked up temporarily in the lower end of the market. Then this summer and fall, the market endured a predictable hangover after the tax credit expired. Home prices slid down in pretty much every market segment in the county and through out Northwest Washington.

But looking at the year over all, home values dropped less than 4% in most price ranges, and in most areas of Whatcom County. 

Looking at the chart below, you can see the average sales price of Bellingham homes has been going back and forth between $260,000 and $300,000 for over a year.  The one consistent trend you can find here, is sellers have been getting more “real” about home pricing, and there has been a steady drop in the average list price of homes.

Buyers have been responding, and definitely jumping all over good deals–especially in the most sought after locations in Bellingham. You can see the gap between the average sales price and the average list price has been closing in. This is definitely a positive indicator.

Bellingham also enters 2011 with less than 7 months worth of inventory, which is a very ideal number that showed balance in the market. But reviewing all of these statistics, the  key trends are: 1) Prices remain soft and have decline slightly in 2010. 2) Inventory has been shrinking this winter. 3) Bellingham pending home sales were up in the last month, and last quarter of 2010.

Whatcom County  however, is still showing higher inventory levels (around 9 months supply) so this suggests prices are still coming down in many areas of the county…but very slowly.

Looking to 2011, it’s hard to foresee any dramatic up or down swings like 2010. 2011 seems on course for a slow but steady stabilization in home prices and home sales. Inventory will hopefully continue to slowly decline from the levels of 2009 and 2010.

For those wondering if there will be a “double dip”, I don’t see it. Interest rates should remain low, and values have dropped enough over the last 3 years to where most buyers realize it’s a good time to buy. Our local economy has a lower unemployment rate (8%) than the state and national average, and continue to see many relocating to our community, as well as many Canadian’s investing as well.

But until we get better economic news nationally, AND more of a slowdown in the foreclosure rate, prices could remain soft in 2011, especially in the county. 

For buyers, there will continue to be incredible opportunities. And for sellers, it is an ideal time to move-up—since home prices have taken a bigger hit in the upper end. You can take the loss on your home sale, but more than make up for it with your purchase.  

For everyone else. A nice stat came out on Realtor.org last month- More than 90% of HomeOwners still don’t regret buying the home they currently own. That includes many people who are currently upside down and have no equity right now. I think that says a lot of things–but most note-ably–that most believe that over time, the market will rebound. We may indeed be in for a very slow rebound, but clearly most still have faith in homeownership and the long term future of the Real Estate market.

For more information or any questions, feel free to contact me here.

How is the market doing?

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I get asked all of the time how the market is doing, and the short answer is, pretty good. Pending Sales in October were way up year-over-year, and inventory is shrinking a bit as well. house-hands-home_~k0972267

The reason the market should continue to recover in the short term, is because of the $8,000 tax credit being extended for first time buyers, and the $6,500 tax credit for the move-up buyers who’ve owned their home for 5+ years. We saw a last-minute peak in sales in October when the last credit was set to expire, so expect the same jump in sales in April when this next credit is set to expire.  Interest rates being extremely low is also helping (under 5% as of today!).

The reason the market should continue to stay stable in the long term (next few years), is prices have come down across the board to make home ownership affordable again. If you have money to put down, it just makes more financial sense to buy then to rent.

The last two years, their was many people ready to jump back into the market, but sellers had for the most part not accepted the new market conditions, and their was a period of time where too many homes were overpriced, and so therefore buyers were not buying. 

Buyers are generally only buying homes that are affordable for them, show good value, and make sense. Which is the way it should be of course. Now, sellers are also conscious of the new market condition, and in general are pricing their homes accordingly (the ones who are motivated to sell are).  Investors are no longer buying property speculating that the value is going to jump up. Instead, investors are buying up deeply discounted foreclosures, and properties that cash flow. Unlike a year ago, their is an inventory of properties that fit this criteria for the average buyer, and the investor.

The next question is, when will property values start increasing again? I don’t see that happening much next year, because so many foreclosures are still coming on the market.

Once the foreclosure rate slows down, and the economy shows more signs of recovering, I then expect home values to start increasing again… but this probably will take into 2011 before we see it. Once values start to appreciate, it should be a slow appreciation. My best guess is an even 2010, then 2 to 5% value increases in 2011, 2012.

The one exception is if you have a home in Bellingham priced under $300,000 in a desirable neighborhood. The value should already be increasing from it’s low in the spring of 2009. The low supply and high demand for these type of homes makes them first to appreciate.

Bellingham pending sales jump dramatically in October

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Many. many people jumped off the fence, trying to purchase before the tax credit was set to expire at the end of November. Sales are obviously not going to sustain at this level going in to the winter, but 118 homes in Bham going under contract in October was still really impressive. Fortunately, the tax credit was extended, so we should have year-over-year increase in sales for the next 5 months in to next spring.

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