We’re living in interesting real estate times here in Bellingham. You have probably heard that it’s a “seller’s market.” Today I want to dive into that a bit with a few interesting facts.
Median sales price
In December 2016, the median sales price of single family homes in Bellingham was $355k. One year ago that number was $319k. Here’s what’s amazing. Just four years ago that number was $260k. If you’ve been in your home for a few years and are looking to size up, the chances are pretty good that you have some equity and can make it work. Right now you can get top dollar for your home.
Days on market
Right now the median days on the market is just 16 days. And it’s not uncommon for a home to go pending in less than one week. One year ago the median days on the market was 23. Right now, sellers have to deal with fewer showings and less people going through their home. Another reason why it's a seller's market.
Why is this happening? There’s a number of factors, but for starters, we have 50 percent less inventory on the market than we did this time three years ago. Last month, there were 258 homes for sale in Bellingham. Three years ago, we had 567 homes on the market.
Why do we have less inventory?
Obviously, a driving force is that there are more people that want to live here than there are places to live.
We moved from Seattle to Bellingham three years ago because at that time, Seattle was just starting to get too difficult (crazy traffic, fights for childcare spots, etc) for our young family. And that trend has continued. So guess what? We weren't the only ones leaving!
Recent open houses have also proven this theory. About 8 out of 10 people attending my recent open houses have been Seattleites trying to move up here.
Not to mention that our quaint city gets listed on best places to retire lists all the time – and retirees are moving here in droves. The last two people I took out on home tours were retirees from California, a state that's too expensive for a lot of folks to not work in!
Why aren't builders building more houses?
A few weeks ago, I heard someone new to Whatcom County (from Southern California) make the comment, “But there’s so much land and space here! This area is just ripe for the development of new homes!” This might be a common misperception, especially from people who come from more densely populated areas, but it’s actually not as easy and buying a lot and building a house anymore.
Yes, we do have some pockets of land left, but they aren’t planned or easily accessible for development. The city has regulations that guide how and where development may occur. The city has annexed everything from the Urban Growth Area (UGA) that is developable, and if it hasn’t already been built out, it’s either zoned industrial or classified as a wetland. There’s simply no wide open developable areas left that are planned for growth.
That leaves infill as our primary option for accommodating the people moving here—and neighborhoods are resisting it. A lot of people don’t want the character of their neighborhood to change. So the city is stuck between a rock and a hard place – and housing prices keep going up.
Move to the country?
Many families are moving out to Ferndale and Lynden where you can get more house for your money. There’s more new construction happening in Ferndale, and it’s only 10-15 minute drive, so that will continue to be an option for some.
Building options out in the county, in general, aren’t plentiful, however. A recent state Supreme Court decision recently made it almost impossible to build a home using a well, which most land in the county is reliant on. The county isn't even currently taking building permits for homes that rely on groundwater withdrawal. And no one knows when that will change. So, building a home in the county is, for all intents and purposes, on hold.
What does the future hold?
Do I think it will change? If we could make perfect predictions about real estate, we’d all be millionaires. Markets rise and fall, economies go through good times and bad. We won’t be on a fast, upward trend forever. Expect interest rates to inch up towards 5 percent this year, which could affect home prices a little. But the population growth of Western Washington is an underlying driving force, creating an interesting market to navigate—and an especially advantageous opportunity for those who want to sell.