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Whatcom County continues its double-digit increases in home appreciation despite a slowdown in the Seattle market.
Home values in this area rose 10% in the first quarter of 2019 compared to a year ago, according to the latest national report from the Federal Housing Finance Agency. That ranked Whatcom County 16th highest among 241 U.S. metro areas. Skagit County ranked 11th among those metro areas, with homes appreciating 10.5%.
This continues a year-over-year Whatcom trend of appreciation between 9-13% in recent quarters. This index looks at purchased and refinanced mortgages to determine changes in home values.
Homes in the Seattle metro area appreciated 4.9% in the past year, according to the report. Home values in Whatcom and Skagit counties could continue growing faster than Seattle for several reasons, said James Young, director of the Washington Center for Real Estate Research at the University of Washington.
One reason is that older households in Seattle who wish to cash out equity and retire have no alternative but to move outside the metro area, Young said in an email. This movement will continue all along the Interstate 5 corridor as well as the Spokane and the Tri-City areas. This will keep Whatcom inventory low as Seattle buyers make all-cash offers, he said.
Rising home appreciation has also meant more affordability issues. According to a report released May 23 by the Washington Center for Real Estate Research, Whatcom’s housing affordability index was 98.1. The report defines its affordability index as measuring the ability of a middle-income family to carry the mortgage payments on a median price home. Anything below 100 means it is less affordable for a typical middle-income family.
Whatcom County’s affordability index has remained below 100 for four straight quarters. Other counties with an affordability index below 100 in the first quarter include San Juan (56.7), King (75.8) and Snohomish (96.1).
Across the U.S., home appreciation is slowing. According to the federal report, home values rose 5.1 percent in the past year.
“House prices have risen consistently over the past 31 quarters,” said William Doerner, supervisory economist for the agency, in a news release. “Although price growth is still positive, the upward pace is softening across the country, especially among states with the largest supplies of housing.”