Business - Business News

POSTED: Sunday, Nov. 02, 2008

Reflecting on Whatcom County real estate

In the real estate industry, it's that time of year to reflect about what happened during the home-buying season.

November and December are typically very slow months for real estate, so those in the industry are now looking ahead to 2009, which is filled with uncertainty, much like the overall national economy. The first step is crunching the numbers, and while we already know the basics for the first three quarters - local home sales down about 25 percent, with median prices down about 5 percent - there were other studies released last week that might give some clues about where things stand going into next year:

- People are still overvaluing their own home. Zillow.com, an online real estate database company, released a survey that found 49 percent of homeowners believe their home has increased in value or stayed the same in the past year, while in reality 74 percent of homes have lost value year-over-year. This is down from the second quarter, when 62 percent of homeowners believed their home value increased or stayed the same. The survey was done in the first week in October, during one of the worst weeks in stock market history.

"After one of the most turbulent quarters in history for the U.S. economy and housing market, you'd expect the reality of dropping home values to start sinking in," said Stan Humphries, Zillow vice president of data and analytics in a press release about the survey. "We are seeing some movement toward more accurate perceptions of home value declines, but there's still a significant gap between reality and perception. There's clearly still some denial."

- On the state and local front, some interesting numbers are coming in from First American CoreLogic, which crunches data on 3,050 counties in the U.S. Using its own Home Price Index, which tracks price trends for repeat sales, the company reported that home prices in the Bellingham area fell by 1.5 percent in September, compared to the same month a year ago. The small drop for the month makes some sense, because September 2007 is considered the time when the credit crunch really starting impacting the Pacific Northwest.

The company also looked at foreclosure rates, basing it on active mortgage loans rather than the total number of households in a given area, which many other studies use. In September, 1.9 percent of mortgage loans were delinquent by 90 days or more, compared to 1.1 percent for the same period last year. On the company's National Core Mortgage Risk Map, it gives Whatcom County a moderate risk classification, the second lowest rank on its chart.

CoreLogic also ranked the percent of homeowners with negative equity, owing more than the house is worth, by state. Nevada had the highest percentage of homeowners dealing with this problem, with around 52 percent either in or near negative equity. About 11 percent of Washington homeowners were dealing with negative equity, ranking 37th out of 43 states, with seven states not reporting data.

There will be plenty more real estate numbers being reported in coming weeks. So far, this area continues to be hit by the real estate slowdown, but not as badly as many other parts of the country. Whether this continues in 2009 will be something to ponder in the coming winter months.