The steady drumbeat in local real estate recently is that inventory is tight and home prices keep rising. It appears some buyers have had enough.
While inventory remains tight, sales are solid and home prices continue to rise, price reductions are also increasing along with homes being pulled off the market. Between June 13-20, 52 price reductions were made on homes for sale across Whatcom County, including 23 price reductions in Bellingham, said Darin Stenvers, branch manager at John L. Scott's Bellingham office, adding that this is up from earlier this year.
Another telling statistic: Of the homes that have come on the market within the last 30 days, 46 Whatcom County homes have been pulled off the market, including 10 in Bellingham. Newly listed homes get taken off the market for a variety of reasons, including being priced too high and not getting offers. It could also happen when a contingent offer on another house didn't work out. Changes in interest rates can also be a factor, Stenvers said.
The result is a gap that's being created during the peak period of the home-buying season. Stenvers said that homes buyers believe are "properly priced" are getting multiple offers while ones that are viewed as overpriced are sitting with no offers.
"I think some buyers are getting tired of being beat up by this market," Stenvers said. "More are now waiting to find the right home at the right price."
Troy Muljat of Muljat Group Realtors agreed there is a split happening in the market, and not just because some sellers are asking too much for a house. The rise in interest rates earlier this year has reduced the purchasing power of buyers who are taking out mortgages.
"What prices are and what people can afford — that gap is widening," Muljat said.
This split could lead to changes in the market, possibly inching closer to a more balanced market, Stenvers said. Inventory in recent months for Bellingham has been in the two-month range, creating a strong seller's market. Typically a balanced real estate market has six months of inventory, meaning that if no new homes come on the market it would take six months to exhaust existing inventory.
That low inventory really shows up during the peak of the Whatcom real estate season, which is in June. According to numbers from the Northwest Multiple Listing Service, earlier this week there were 25 single-family homes (not including mobile homes) for sale for less than $400,000 in Bellingham. At the same time there were 27 single-family homes for sale for more than $1 million in Bellingham.
"That's very low inventory, even during this busy time of year," Stenvers said.
Inventory for single-family homes under $400,000 tends to be low during this time of year as people are completing purchases in time to move before summer is over and school starts. Still, having more million-dollar homes available is unusual.
So when will Bellingham start seeing higher levels in inventory? If interest rates continue to rise, and current housing projects are completed, it may be some time next year, Muljat said.