Fed rate increase and the Bellingham housing market

For nearly a decade, we've had extremely low interest rates, but the tides may be changing.

The Federal Reserve’s monetary policy committee raised interest rates by a quarter of a percentage point at its March 15 meeting. If the economy keeps growing as expected, then we should expect additional increases over the next two years.

The Federal Reserve rate impacts other loan rates including mortgages. So what will the impact be on mortgage rates? And what about the housing market?

We've been anticipating these rate hikes so this increase has already been built in to current mortgage rates. That said, we do anticipate a slow rise in mortgage rates this year, somewhere between 4.5 and 5 percent by the end of 2017.

What does that mean for an average buyer/home purchase? If you are buying a house with a $300,000 mortgage, a 1 percent difference from 4 percent to 5 percent means your monthly mortgage payments will go up from $1,432 to $1,610, which means you will be paying $178 more a month on a 30-year mortgage. 

Locally, because of the high demand for housing, I don't expect any huge changes to home prices in Bellingham or Whatcom County. Higher mortgage rates may have some downward impact on that demand, but the population growth here is another driving force – and I don't see that changing anytime soon.

Plus, housing remains very affordable by historic standards. No one has a crystal ball, but if I had to make an educated guess, I would anticipate another healthy real estate year despite an environment of increasing mortgage rates.

Worth noting, this week I learned about some interesting temporary buydown programs offered locally. This type of program allows people get into the market a little easier with a lower initial monthly mortgage payment in exchange for an upfront fee. Some of the fees are even paid by the lender, or can be negotiated to be paid by the seller. Just another reminder that if you're house shopping, it's important to also mortgage shop (less fun, I know!) and check out what products are available at any given time.

Future waterfront development in Bellingham

One of the things that really excites me about Bellingham is the downtown waterfront transformation that's underway.

Bellingham's roots are in the timber/logging industry, as well as fisheries and coal. The massive impact of the Georgia-Pacific pulp and tissue mill on our city's waterfront is undeniable. Records from the Georgia-Pacific Corporation (formerly the Puget Sound Pulp and Timber company) date back to 1892. It was here in the very beginning.

(Photo credit: Galen Biery Photographs, Center for Pacific Northwest Studies, WWU)

G-P has since left, but the mill's legacy impacts our waterfront even today. A massive effort to clean up environmental contamination has been underway since the late 90's. Development has, for all intents and purposes, been on hold until the state deems each area safe for human health. We're getting closer to tangible progress, evidenced by the capping and flattening of the west part of the G-P cleanup site last summer, and the historic Granary building renovation that's currently underway.

In 2015, I helped plan an event to celebrate progress on the waterfront.

The city of Bellingham and Port of Bellingham have been busy conspiring with architects, developers and even artists to reenvision this entire waterfront area. Efforts to incorporate some of the industrial history led to a recent solicitation of bids to transform the "Acid Ball," a spherical structure that used acid to break wood down into pulp, into an artistic relic for the downtown waterfront. A proposal out of Seattle's Mutuus Studio won. Their renderings of the artifact installation in the new Whatcom Waterway park, scheduled to open in 2017, make me excited.

Rendering of the "Acid Ball" and the soon-to-open Whatcom Waterway park on the Bellingham waterfront. (Photo credit: Mutuus Studios)

Why am I excited? For starters, the city's vision for more public access on the waterfront, and a better connection between the waterfront and the downtown core, will likely bring vibrancy to downtown Bellingham. Second, a focused effort around economic development and a seemingly clear strategy to attract solid industries is promising. Over the years, the energy in Bellingham's downtown core has ebbed and flowed — but the future looks bright.

WHAT DOES THAT MEAN FOR REAL ESTATE?

My opinion that Bellingham is just being discovered — and that population growth and therefore rising home prices will only continue. We live in a beautiful town with access to the San Juan Islands, Mt. Baker, Vancouver B.C., and countless parks and trail systems. With a strengthened economy and downtown core, we are perfectly poised for more growth. So brace yourselves Bellinghamsters, we might not be the "city of subdued excitement" for much longer.

A closer look at this "seller's market" in Bellingham

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.

Inventory issues

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.

12 home decluttering resources in Bellingham and Whatcom County

Every January 1, I have an incredible urge to simplify and declutter my home. Here’s the problem. I just bought our kids 5 million new toys, with increasingly smaller parts. I literally spent the majority of winter break picking up teeny tiny toy parts only to find them scattered about five minutes later. It's crazy-making!

But it’s not just my kids' fault. I am going to admit a secret. I'm not a natural organizer of my space. I blame it on working so much. I blame it on being a creative person. I blame it on having more important things to do. Here are my internal struggles, brought to you via the inside of my brain.  

• “This could come in handy later.”
• “Remember when….?” (this object came into my life in a very enjoyable moment in time.)
• “Where should this go?”
• "Whose is this?!?"
• “If I leave this here, I'll remember.”
• “What the hell do I do with THIS? I'll figure it out later.”
• “I bet I could get $40 on eBay for this. I’ll just put it here until I have time to post it.” 
• “I need to get to Target to buy more bins.”  MORE BINS!!!! 

It’s 2017 and I’m resolving to conquer these useless internal thoughts. I want my sanity back. And that requires less stuff.

Our family of four spends 99 percent of our time on the 1700 sq ft main floor of our house. We should be able to manage in this amount of space. But our stuff keeps growing in numbers. The sheer volume stresses me out!

So, I’m resolving to be ruthless in my decluttering. Bye-bye vintage dessert dishes that I’ll actually never use because - just admit it - I don’t make beautiful homemade desserts. See ya later tiny college t-shirts that remind me of my hipper days but actually don’t fit on my mom-bod. Nice to know you lotions and potions that carry the promise to make me more beautiful but don’t actually inspire me to use with any consistency.

If you’re in the same boat, here are twelve local decluttering resources that you might find helpful in your purge and re-organization.

donate HOUSEHOLD, CLOTHING, FURNITURE items

• Goodwill – 1115 E Sunset Dr. , Bellingham, WA 98226
• YWCA Bellingham - especially likes professional women’s clothing, twin or full-sized blankets, quilts and comforters, pillows, kitchen towels, silverware, dishes, and small refrigerators. 1026 N. Forest St. Bellingham.
• Wise Buys Thrift Store, run by Lydia’s Place, a homeless center for women and children. Takes gently used clothes and household items. 1224 North State St., Bellingham.
• Arc of Washington State – will pick up clothing, bedding, books, camping equipment, and more. Pick up!
• Lynden Christian Second Chance Thrift Store

dispose of old ELECTRONics

• Safe & Easy Recycling. 3863 Hannegan Road, Suite 110, Bellingham.

recycle CRAFT MATERIALS

• Whatcom Children’s Museum. Finally, I know where to bring our surplus art supplies! 227 Prospect, Bellingham.

donate old BUILDING MATERIALs

• RE-Store -  accepts a wide variety of building supplies, business furniture, home decor, yard and garden items, architectural salvage, and occasionally unique antiques. 2309 Meridian St., Bellingham.

get rid of STUFF NO ONE WANTS

• Recycling and Disposal Services (aka the dump)

call a PROFESSIONAL HOME ORGANIZER

• Organized at Last - Julie Clarke
• Home Shui - Crystal Clear
• Harmony Matters - Jessie Larsen

Happy client, happy holidays

Turns out, it's just about the best feeling in the world to get a text from a first-time home buyer client who recently moved in, who has holiday decor photos to share. Warm fuzzies all over the place. So cute! 

I hope everyone had a happy holidays. We had a great, quiet time at home. Santa was busy, the kids made out like bandits, and the parents are secretly glad the season is coming to an end. 

Be safe out there tonight.  And cheers to a new year!

A look at November home sales in Bellingham

You might think that 3rd quarter is a tough time to list a home. Yes, the holidays can present a logistical challenge (although there's hardly a time when a home looks more charming and appealing, am I right?). However, current market data paints a pretty appealing picture for listing. 

A quick look at market data shows:

• A 20 percent decline in inventory of single family homes since last month.
• A 30 percent decline in homes on the market since November of last year.
• A 15 percent increase in homes closed since last November.
• Homes have been on the market for an average of 39 days, almost 50 percent fewer days than the same time last year!
• Homes have sold for, on average, 97 percent of list price.

With little inventory on the market, and plenty of demand, it's definitely a sellers market.

5 reasons to move to Bellingham, WA

In 2013, after living in Seattle for 10 years, my husband and I decided to move 85 miles north to Bellingham, WA. We loved Seattle with every ounce of our youth, but once our kids came along, our priorities changed and we looked for something that might make the day-to-day a little easier. Here’s the top five reasons why we moved to Bellingham.

No. 1. More affordable housing. 

In January 2016, the median sales price of a single family home in Bellingham was $339k. In that same month, the median sales price in the Ballard/Greenlake/Greenwood neighborhoods (where we lived) of Seattle was $650K — 92 percent higher. Wow. 

As an expanding family, the opportunity to get more square footage for our money was really appealing. We were lucky and landed a home with a view of Bellingham Bay.

No. 2. Less traffic. 

In our younger, childless days, it wasn’t as big of a deal to endure a 45-minute to an hour commute to and from work. But after kids, we found ourselves counting the minutes spent in the car every day—and wishing we were home already to snuggle our kiddos and prepare a nice meal. And every day, my agitated self sat in that line of cars fighting to get home, and I would multiply our weekly commute by our nanny’s hourly wage. I started feeling like there had to be a better way.

In Bellingham, it seems like you can get anywhere in about 5-15 minutes. The easy commute to and from work might be my number one favorite thing about living here. We’ve happily adjusted to a new normal. 

No. 3. Quality schools

Since moving here, I’ve become a huge fan of the Bellingham Public School District. There are many quality public schools, and many active and engaged parents. Our kids go to Lowell Elementary, which is a charming utopian elementary school in a gorgeous 1908 building. So far we’ve enjoyed an active PTA, a smart, engaged principal, and kind, energized, teachers. On my daughter's first day of kindergarten, I realized she had a view of the bay. It doesn’t really get better than that.

No. 4. Great community - Down-to-earth people.

There’s just something about the people that live here. Some of the nicest, most genuine people I’ve ever met live in Bellingham. I think a lot of people have chosen to live in this quaint community for the wonderful work-life balance, and so a grounded, down-to-earth community has been formed. There are many smart, resourceful, entrepreneurial types in Bellingham and Whatcom County. The proximity to the water and mountains draw an active, outdoorsy crowd. The college keeps the community fresh, and intellectually stimulating. 

No. 5. More accessible summer activities.

Want to go a beach? Choose between Boulevard Park, Larrabee Beach, or Bloedel-Donovan, just to name a few. And don’t worry about parking because chances are, a spot will be waiting for you! 

Want to go for a hike or nature walk? There’s the Interurban Trail, Lake Padden Park, Whatcom Falls Park, or the Chuckanut Ridge Trail. There’s so many beautiful accessible options!

On hot summer nights, you’ll find adventurous teens jumping off of Taylor Dock, or folks getting ice cream at Mallard Ice Cream. There’s so many things to do—and it won’t take two days of planning and a half a day worth of traffic to get there.

a good choice.

Three years in, we feel good about our decision to move to Bellingham. Don't get me wrong, at times, we definitely miss the energy of a larger urban area. But Bellingham is a beautiful, relaxed and wonderfully charming place to live.