Market Update: Seller Concessions Are Now the Norm

Interest rates are more than double what they were a year ago and many buyers are paralyzed.

But did you know? Right now almost every new contract coming across our desk includes "seller concessions"— meaning, sellers are contributing cash out of their proceeds to help the buyers with their closing costs, which can include, buying the rate down.

Sometimes the "buy downs" are fixed, and sometimes they're graduated Temporary Buy Downs. Here's how the Temporary Buy Down works:

My buyer client purchases a $750,000 home. Their loan is $562,000. Let's say I am able to help said buyer get $30,000 in seller concessions. Buyer uses these funds for a Temporary Buy Down. The note rate is 6.5% but with this buy down...

- 1st year rate = 3.5% (a savings of over $1000 per month on their mortgage)
- 2nd year = 4.5%
- 3rd year = 5.5%
- 4th year it would go to the note rate—at which point we all hope rates are lower again and buyer can refinance (don't expect 3% though!).

If this buyer refinances before all of the $30,000 Temp Buy Down funds are used, the leftover funds will go towards the payoff of their loan.

So all of this is to say, there are options if you want to make a move. In addition, escalations are rare, inspection contingencies are common, and offers contingent on the sale of your current home are plausible... It's not all bad out there!

Market Update (January Stats)

Here are the January market stats/recap for Whatcom County. I personally feel that these stats are most meaningful with some context and anecdotes, and I prefer big picture so....

Finger on the pulse, I'm feeling like we are still in a fairly similar market as we were last year at this time. Inventory is still low. There's still more buyers than sellers. There's still a lot of people moving to the area, and we're still not building that many houses up here because - well, it's still hard to build houses here.🌲

Interestingly, days on market has creeped up. But I think that's to be expected during the holiday/snow season and I don't think it signifies a market slow down. I got into a multiple offer situation just this week (and won). It's still an intense market for buyers.🔥

So where do we go from here? It feels like we're going nowhere but up. Sure, a recession will hit, but the question is, what impact will it have? Based on what’s happened in past recessions, a recent report by First American argues that the next recession is unlikely to prompt a major downturn in housing. Here's the important part: The growth in home prices seen during the current economic expansion hasn't been fueled by increased access to mortgage credit. It's more about supply and demand. The supply of homes available for sale is very low, pushing prices upward. People who have owned in the last few years now have more equity. Even if their home value drops during a recession, it's less likely that they'll be under water and have to bail, creating that influx of inventory that we saw during the last recession.

Furthermore, Whatcom County's job market is less likely to be impacted than other markets. Think PeaceHealth, WWU, the refineries. We have stable, pseudo-governmental employers, and a lot of tough and innovative small businesses to round it out. We tend to ride the economic waves fairly well here. 

If you've made it to the end of this, congratulations. (Nerd alert!) In conclusion, we’ve added 36 listings since this infographic was created (503 active listings at this very moment in time), so spring is coming! ☀️

Summer of 2019 Recap + Market Update

Just a quick check-in after a busy summer (phew!) with an update on some of my favorite projects this summer.

I had the opportunity to help two families move away for better jobs, one family move here for a better job, two sets of first-time home buyers, one couple purchasing their first home together, one couple that’s new to Washington, and one new investor. I love helping people make transitions in their lives!

Sold / Summer 2019

The market continued to be strong in summer of 2019. Residential real estate in Bellingham hovered around approximately 1.6 months of inventory all summer — which is still considered a seller’s market. (A balanced market is considered 6 months of inventory.) Five out of 8 of the above properties were multiple offer situations. Successful buyers, especially in the Bellingham area, acted swiftly and strategically.

In August, the median sales price of all residential in Bellingham was $419,000. If we look at single-family homes only (remove the condo and vacant land market) that number jumps to $470,000. (In January the median price of residential real estate was $405,000, so we have had steady appreciation throughout 2019.)

Average days on market in Bellingham hasn’t peaked above 32 days all year. As one might imagine, properties under $400,000 had even lower average days on market, between 25 and 27. Anecdotally however, many listings pended within one week.

I’m currently feeling a bit of a slowdown, but it’s hard to say how much is seasonal and how much is a true softening of the market. Unemployment is historically low. Interest rates are still low, and based on how many out-of-state buyers have been calling me, I feel like Bellingham is officially on the map as a super desirable place to live.