Paul's Bellingham Blog

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

Is there jobs to support home values in Bellingham?

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With home prices increasing at double digit rates over the last 2 years, and rents increasing at similar rates, I often get asked questions about where the money is coming from to support these price increases. Questions like:

Where are all these people coming from that can afford Bellingham’s prices?

And are rents and home values over-inflated?

After all, it’s well known that Bellingham does not have an Amazon or Microsoft like Seattle does to boost the economy. But as a Realtor, meeting and talking to buyers every day, you do get a better feel for where the money is coming from. And the money is here!

First, we have to look at the fact that there is a local economy that has been improving.

Second, while Bellingham does not have as many large corporations, it is home to many affluent small business owners, who operate business’s that serve customers nationally and internationally. And with many large tech companies in Seattle allowing more and more employers to work from home, Bellingham has seen a sharp increase in the number of professionals relocating to Bellingham-tele-commuting to their Seattle jobs. Indeed, there is more and more Microsoft and Amazon employees relocating to Bellingham.

Third,  Bellingham continues to be a sought after location for retirees, and this is in fact a huge segment of the upper end Real Estate Market. Retirees are coming from everywhere from the East Coast to California, with huge equity from their home sales elsewhere.

Last but not least, our neighbors from Canada still play a role. Despite the exchange rate hurting the Canadian dollar, Canadians still buy and rent in our market, and contribute to the local economy.

Bellingham does have some big employers with relatively high paying jobs. Namely St. Joseph’s Hospital, WWU, BP Cherry Point Refinery, Zodiac Interiors, Intalco, The Family Care Network, Alpha Technology’s and the Anvil Corporation.

But the local job market has not played the biggest role. It is indeed the tele-commuters and the retirees relocating to Bellingham that have been the biggest factors in the rise in demand in Bellingham.

And then we can’t forget about the supply issue. Bellingham has very little new construction happening, relative to the growth. And new construction was almost non-existent from 2009-2012.

So the demand is coming from a diverse populous, and yet the supply is not even close to catching up.

And while the demand for housing in Bellingham has made it less affordable. It has helped many local industries. The Real Estate industry (there is now over 1,000 Real Estate agents in Whatcom County), the financial sector is growing, & Bellingham has seen a huge rebound in construction jobs.

I would love to see an increase in the area of in-fill and affordable housing in Bellingham. And some of that is happening near and around downtown. But we can also consider that Bellingham is surrounded by Ferndale, Sudden Valley, Blaine, Everson, Lynden…communities that are more affordable, and still boasts good schools, some great neighborhoods, and relatively short commutes into Bellingham.

So this is a diverse economy, and the housing market is indeed strong and stable. It will be interesting to see if prices continue to increase in the spring of 2019. My best guess is that they will.

The Eleanor Apartments on N. Forest st in downtown Bellingham. This is an 80 unit apartment complex just completed to provide affordable senior housing. Another similar project is happening nearby, as the city has worked to provide incentives to developers to provide affordable housing downtown. 

New Census and Home Value information for Bellingham

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The population continues to grow in Bellingham, now 83,365 at end of 2015, up 3% from 80,867 in 2010.
That is within the city limits, but the population is an estimated 104,356 when including everyone who lives within the Bellingham address, which includes the community of Sudden Valley and the surrounding unincorporated areas of Bellingham.
And no surprise, with the population growth, lower unemployment rate (now 6.8%), andlack of new construction in Bellingham since 2010.. home values are increasing. Home values are up 7% year over year right now as of April 2016. With less then 3 months of inventory in Bellingham (meaning if nothing new came on the market, all homes would be sold within 3 months at current sales pace), that points to prices continuing to rise at a modest rate for the next year.

Market Update: Looking back at 2011 and What’s Ahead in 2012

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In looking at all of the numbers from 2012, their is many positive signs. Year over year, sales were up slightly, yet inventory has come down note-ably in all areas and price ranges in Whatcom County.

The most recent snapshot of Whatcom County home sales is December (see chart below). 144 homes closed in December of 2010, and exactly 144 homes also sold in December of 2011. Pretty amazing how that number is exactly the same. But the good news was that inventory dropped from 1,287 homes available in 2010, to 1,150 in 2011.  And pending home sales (homes under contract) rose slightly from 97 at the end of 2010, to 102 at the end of 2011. That is the good news..

The sobering numbers are found looking at home prices. The average dollar per sq foot a home was selling for in December of 2010 was $157, compared to $134 at the end of 2011, and the medium home price dropped from $252,000 to $229,000.

So values have still been dropping substantially over the last year in Whatcom County, but the numbers vary depending on the city and price range within the County you are in.

Bellingham home values were down less then 4% in 2011, compared to most areas of the county experiencing between 5 and 7% drops in home value. Sudden Valley took the biggest hit, with home values dropping by 8% in 2011.

So home values have continued to slowly decline, but all signs point to that trend slowing down and values leveling out. This is especially true in Bellingham, and in the lower end of the market (under $300,000).

So what’s the take away?

For sellers who are serious about pricing there home right, there is less competition, and homes are selling faster.  And with prices leveling out in most areas of the market, you can price your home right and have a good chance of selling and getting a reasonable offer. The other good news is the average home is selling closer to asking price right now then it was a year ago. Buyers are paying an average of 96% of list price compared to an average of 94% of list price in 2010. More and more of the really good deals are seeing multiple offers again as well!

For buyers, interest rates are back down at all-time lows (around 4.0% for 30 year lock) and there is opportunities every day in this market.  So it will continue to be an excellent time to buy in 2012.