With home sales on the rise and new inventory not keeping up, the seller appears to be gaining the upper hand in Whatcom County real estate this summer.
By the end of June the amount of home inventory available locally was down to 5.3 months, according to a new real estate report from Coldwell Banker Bain. That's the lowest level since 2005, according to the report.
Typically six months of inventory is considered a balanced market between buyers and sellers; lower than six months gives more leverage to sellers, while more inventory tends to help buyers.
The inventory is particularly low for homes under $300,000, said Gragg Miller, broker at Coldwell Banker Bain's Bellingham office. He estimates the inventory is in the two-month level for homes in that price range in Bellingham and 3.8 months for Whatcom County.
"For buyers in that price range, we tell them to be prepared because a quality house in that range moves fast," said Miller, noting that it helps if those buyers are pre-approved and understand there probably will be multiple offers.
The low inventory is a trend taking place across the state, especially in the Seattle area, said Glenn Crellin, associate director at the Runstad Center for Real Estate Studies at the University of Washington. He noted that while sales are up, it's the lack of homes coming up for sale that's been a bigger factor.
"Building permits (to construct new homes) are increasing, but it takes a while before those homes are ready," said Crellin, adding that he expects inventory to remain low in the second half of 2013.
Through the first six months of 2013, a total of 1,067 Whatcom County homes sold, a 15 percent increase compared to the same period in 2012, according to the report.
While up significantly compared to recent years, the 2013 sales are still well off the pace of the real estate bubble that took place before the recession. The peak year was 2004, when 4,454 Whatcom County homes were sold for the entire year.
The low inventory also has meant that local homes coming on the market aren't staying unsold for long. According to the Coldwell Banker report, the average number of days between when a property was first listed and when an offer was accepted was 77 days in June. That's the lowest total since 2005.
The tight market also has impacted prices. For the past 12 months, the median price of homes sold locally was $251,000, a 5.6 percent increase compared to the previous 12 months.
The median price remains well below the real estate bubble period: In 2007, the median price for homes sold was $290,725, according to the Whatcom County Real Estate Research Report.
The rise in the median price could help distressed homeowners who couldn't sell their homes because they were underwater, owing more on a mortgage than the home was worth. Crellin said it should help those get closer to the break-even point if they choose to sell. Other distressed property, including foreclosed homes, should continue to come on the market if prices continue to increase.