Whatcom real estate market ‘slowing down,’ but what does that mean if recession hits?

See the homes you can buy for $300,000 to $400,000 in Bellingham

The median home sales price in Whatcom County increased 12% from $344,000 in 2017 to $382,800 in 2018. Here’s what you can buy for $300,000 to $400,000 in Bellingham in June 2019.
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The median home sales price in Whatcom County increased 12% from $344,000 in 2017 to $382,800 in 2018. Here’s what you can buy for $300,000 to $400,000 in Bellingham in June 2019.

With the peak home-buying season winding down, it appears Whatcom County are having a more typical, steady period in 2019.

From April through July, Whatcom County real estate agents sold 1,425 houses or condominiums, according to data from the Northwest Multiple Listing Service. That’s a 2.4% increase compared to the same period in 2018.

While August also tends to be a busy month real estate activity tends to start winding down as schools start the fall session.

“It’s slowing down, but now we are showing signs of more typical market,” Troy Muljat of The Muljat Group told The Bellingham Herald, adding that home sales and prices went up incrementally at a steady rate prior to the real estate bubble that started around 2007.

Some of the issues that led to skyrocketing home prices are still in place, however.

Inventory remains very low — inventory in Bellingham is at 1.7 months this month, while it is at 2.8 months in Whatcom County, said Darin Stenvers, branch manager at the John L. Scott office in Bellingham.

That means in Bellingham if no new homes came on the market, the city would run out in less than two months. For a balanced market between buyers and sellers, six months of inventory is typical.

The trend Stenvers said he noticed this summer was more people looking for newly built homes. That led to more people looking at communities like Ferndale and Lynden, where more home construction activity is taking place, he said.

The types of homes available also remains an issue.

Muljat noted that on Aug. 16 in Bellingham 29 homes were for sale for more than $1 million, while only 44 were available for less than $400,000. That’s actually an improvement compared to late last summer, when the number of homes available in those two price categories was about equal.

What a recession might mean for local real estate

Recent speculation of a global or U.S. recession might make some wonder what that would mean for the local real estate market. After all, home construction and selling were hit hard in the last recession, as foreclosures spiked and troubled financial institutions curtailed lending.

Muljat said the current local real market is in a different situation compared to 2007-08.

New regulations have meant home owners/buyers are not as overextended compared to 12 years ago. Buyers are putting larger down payments on a house purchase, making them less likely to be underwater on their mortgage if home values decline.

“If there is a recession, I would expect it to a slowdown rather than a crash,” Muljat said, referring to real estate market.

Heading into fall, both Stenvers and Muljat expect the current steady cycle to continue.

“The way I see things trending, we are moving closer to a more balanced market (between buyers and sellers),” Stenvers told The Herald.

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Dave Gallagher has covered the Whatcom County business community since 1998. Retail, real estate, jobs and port redevelopment are among the topics he covers.