Big jumps in home values continued across Washington state this past spring, with Whatcom County among the areas posting the largest increases in the U.S.
Home appreciation rose 13.1 percent in the second quarter compared to a year ago for the Bellingham metro area, according to a new report from the Federal Housing Finance Agency. That’s the eighth-highest year-over-year increase among the 245 metro areas listed for that time period.
It was the sixth-straight quarter Whatcom County posted double-digit, year-over-year home appreciation increases with this index, which looks at purchased and refinanced mortgages to determine changes in home values.
Several Pacific Northwest metro areas were in the top 10 for year-over-year home appreciation increases. Boise, Idaho, ranked second on the list with a 15.6 percent increase, Tacoma was third at 14.9 percent, Bremerton fourth at 14.4 percent, Seattle sixth at 13.7 percent and Wenatchee ninth at 12.6 percent.
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It’s been a long run of strong demand, something that may continue in the coming months for Whatcom County along with other areas outside of Seattle, said James Young, director of the Washington Center for Real Estate Research for the University of Washington.
Despite some hints that the red-hot Seattle real estate market might be cooling off, it is still a very tight market. Young said retirees in particular are having trouble trading down. They have no problem selling their Seattle house, but can’t find anything to buy, so they continue to look outside of Seattle to places like Skagit and Whatcom counties.
Add that in with the increase in commuters and telecommuters working outside Seattle, and that extra demand will keep pushing up home values in Bellingham, he said.
The Washington Center for Real Estate Research came out with its own second quarter report on Washington real estate, which provides a similar picture about high demand and low inventory in Whatcom County. The center estimates that Whatcom’s housing affordability index was 95.6 last quarter. The affordability index measures the ability of a typically family to make payments on a median-priced home.
What does Whatcom’s latest index number mean? A family earning the median income has 95.6 percent of the income needed to qualify to buy a median-price home with a 20 percent down payment and a 30-year mortgage. King County’s index number is at 66.9, while Skagit is at 103.9.
It’s the first time Whatcom’s index number has dropped below 100 in more than two years, according to the report.
While home appreciation is still rising rapidly in the Pacific Northwest, it is starting to slow down in other parts of the U.S., according to the report. Across the U.S., home values rose 6.5 percent in the past year.
William Doerner, a supervisory economist for the agency, said recent mortgage rate increases could be a factor in the national slowdown.
“Rates are still inexpensive from a historical standpoint, but their bump-up appears to have gently pressed the brakes on house price increases,” Doerner said in a news release accompanying the data.