Paul's Bellingham Blog

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

1st Quarter of 2012 in Review. Is Market Rebounding?

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Reviewing the numbers for Bellingham Real Estate along with all of Whatcom County, the numbers are essentially all positive. Home sales are up, and inventory is down. This is the exact formula needed to provide a more ideal level of supply and demand, and in turn, finally stop the slide in home values. Market values in our area have been dropping for 4 years, but it has been at such a slow and steady pace, it’s been difficult to pin down when we were going to “hit the bottom”. Finall, in more and more segments of the market, the numbers are showing values stabilizing.

See this chart below for Whatcom County over the last 15 months.

Notice the January/Ferbuary/March numbers compared from 2011 to 2012. Closed sales and pending sales up (in February and March), and homes available For Sale are way below last year..

Another way to look at the same numbers and figure out what direction the market is heading is to look at the absorption rate.. This is a basic formula where you take how many houses for sale today, and divide that number by how many sold last month. An example: 200 homes for sale divided by 20 homes sold would be a 10 month supply.

You can see that supply of housing dropped substantially to under 7 months by the end of March. A 4 to 8 month supply of housing is considered a solid Real Estate Market. Under 4 months and prices are usually going up. Above 8 and prices are usually coming down.

If the current trend continues in the 2nd quarter, home values will continue to stabilize and may start to actually–dare I say “appreciate” in some of the lower priced/high demand sections of the market.

The first signs of our local market bouncing back a bit has indeed arrived, but much of the pace of the recovery will depend on the foreclosures and short sales. The amount of foreclosures coming on the market has dropped off substantially in the last 3 to 4 months. The smart money is on watching the numbers on the pace of foreclosures coming on the market this spring and summer. If they continue to just trickle on at a slower pace, that is good news for home values. If there is a back-log of foreclosures that are still coming in  mass waves, that will slow down this recovery.

In my next blog I will be exploring if there is a “shadow inventory” of bank repo’s that are yet to hit the market.

November Home Sales Update for Whatcom County

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Pending home sales were up slightly this November, compared to November of 2010, which is encouraging news. We’re also seeing a reduction in homes for sale, which is typical for this time of year.

The trend I’m noticing that is most encouraging, is the last 4 months have shown a steady pace of sales. Usually sales spike up in the late summer, and then drop down in November, but that is not the case this year.

Bellingham and Whatcom County home values are down slightly since the tax credit expired in April, and buyers have taken note-jumping on the many good deals that have been hitting on the market.  And so there is a lot of activity happening considering the time of year. I am getting lots of calls, and more and more buyers are entering the market, believing that we must be at (or close enough) to the “bottom” to start getting serious about investing in Real Estate again.

So with home prices down, and rates still in the mid 4’s, homes in Whatcom County are absolutely at there most affordable level in many years.  Factoring in the affordability, along with the recent sales trend, the local Real Estate market is poised to have a slightly improved winter compared to last year.

Zero Down Loan Program Coming Back

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It was just announced that the USDA Zero Down loan program is coming back! This program is funded through the Rural Housing Administration, and allows buyer under a certain income limit to buy Zero Down, outside of city limits. In Whatcom County, all areas are included outside of the city limits of Bellingham. A couple of homes that I have listed that would qualify for the USDA program include 2565 Finkbonner Rd in Bellingham for $209,900, and 5144 Marshall Hill Rd in Deming, for $204,000.

This loan program also has no monthly mortgage insurance, so monthly payments can be extremely affordable (especially with today’s rates)!

Since the tax credit expired, there has definitely been a shortage of First Time Home Buyers entering the Real Estate market this summer. This should certainly help bring more first timers back into the market, which can have a trickle up effect on home sales and home prices. For more information, contact me here.

Sale Pendings Down, Inventory up in May

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Pending homes sales were way down in Bellingham in May, year over year, and down from April.

This was not a surprise, since many buyers pushed up there purchase a month early in order to qualify for the $8,000 tax credit deadline (of the end of April).

The amount of homes for sale in Bellingham WA, also increased, which is typical for this time of year, but still an increase year over year.

What does this all mean? It means we are in the middle of a mini dip in home sales in Bellingham and Whatcom County, which is a natural effect after just ending a $8,000 tax credit incentive. Expect home sales to improve as we get into the summer, as weather improves and families try to make the ideal move while the kids are out of school.

Bellingham and Whatcom County foreclosure rate less than 1/3rd National Average

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Whatcom County residents in some stage of foreclosure was 0.86% in April. That’s below Washington’s rate of 1.3%, and well below the U.S. rate of 3.2%. So Washington Real Estate, and Whatcom County specifically, is looking a lot more stable than the national average.

A main reason Bellingham amd Whatcom County homes have a much lower foreclosure rate, is because in our area, we did not have nearly as many fancy subprime loans that became really popular in states like Nevada and California. Also, values have not dropped as much as they have in many areas of the country… So many homeowners who have been unable to make there payments have been able to sell and still get out with a little bit of equity, or through a shortsale.