Sales of homes over $1 million skyrocket in 2021 across Whatcom County
What was once the slowest segment of Whatcom County’s housing market is now one of the hotter ones, which could prompt some to reconsider what a high-end home is these days.
Local sales of houses or condominiums for more than $1 million have taken off this year. According to Whatcom County property data provided by the treasurer’s office, 265 residential properties have sold for more than $1 million between October 2020 through September 2021. That’s a 145% increase compared to the same period in 2019-2020. That list could include residential sales beyond a standard house or condominium sale, such as a multi-parcel transaction, said Treasurer Steve Oliver in an email.
Braden Gustafson, a senior appraiser at Gustafson & Associates, ran a search through the Northwest Multiple Listing Service, focusing more narrowly on single houses and condominiums units sold by real estate agents. He came up with 212 sales of more than $1 million, a 158% increase over the same time period.
Digging deeper, Gustafson found that 3% of homes sold in Whatcom County last year were over $1 million. So far this year, that has more than doubled to 6.5% in Whatcom County and 10% in Bellingham.
“A home selling for over $1 million is not notable anymore,” Gustafson said in an email.
Record for highest-priced home
This year also set a new record for the highest priced home sale in Whatcom County. A property in the Edgemoor neighborhood recently sold for $7.31 million, more than double the previous record of $3.3 million that was set in the same neighborhood 13 years ago, Gustafson said.
The record-setting property is on Bayside Road. According to a Real Estate Excise Tax Affidavit filed with the county, the seller was Jim Swift, known locally for operating several businesses in the area, including Rocket Donuts and Fat Pie Pizza, before moving out of the area. The buyer is less clear, with a newly-formed trust listed and a Seattle-area attorney named the trustee.
The property, which has a 2,100-square-foot detached dwelling to go with the nearly 6,000-square-foot house, has sweeping views of Bellingham Bay.
Gustafson, who was not involved in the sale of the property, wasn’t surprised by the sale price, given the location and the quality of the home. What did surprise him is that it took 13 years for Bellingham to set a new record for highest-priced home sale. In the past decade, the highest sales price for a Bellingham home each year was in the $1.95 million to $2.7 million range.
“I think it is primarily due to very few top-tier homes coming available in Bellingham the past five years,” Gustafson said.
Several factors fueling sales
Several factors are in play for the big jump in home sales topping $1 million. One is that there are simply more properties available, not just from new construction but from the sharp rise in prices in the past few years.
A 25% year-over-year jump in sale prices is not unheard of in some price levels these days, so a house that was in the $800,000 range a year ago could now be in the $1 million club. The market is making it happen even quicker in some cases: A home near Broadway Park was listed this summer for $995,000, but the final sales price in October was $1.217 million.
Other factors include low-interest rates making financing in this price range possible for more people to go along with the overall tight inventory. There’s also the trend of people moving to Bellingham from more expensive areas such as Seattle now that remote work has become more common during the COVID-19 pandemic.
What this does to the market
With more homes migrating over the $1 million price point, homes in other price levels are also moving up the ladder. That’s further reducing the already low inventory for the $300,000 home because it’s now a $400,000 home.
“Starter homes no longer exist in Whatcom County,” said Dean Fearing, executive director for the Kulshan Community Land Trust, in an email. He noted that families now need to earn more than 130% of the area’s median income to afford an average-priced home. “This means a lot more people are renting than buying, which further compounds affordability as rents increase.”
It also means companies that are looking to relocate to Whatcom County may ponder whether its workers can afford to live here. Don Goldberg, director of economic development for the Port of Bellingham, said in a November 2020 interview with The Herald that available housing is one of the first questions asked by company officials, and that news is discouraging. That hasn’t changed, given the continued low inventory and the rise in sales prices.
At Kulshan CLT, which holds land in trust for permanently affordable homeownership, Fearing said they are working to expand capacity to help more buyers. The organization has 60 homes in the pipeline and is working on three other projects that could add another 150 homes. Kulshan currently has 138 homes in trust and has helped 215 families buy homes when resales are included.
The expansion of capacity is needed because the land trust is seeing its waiting list grow. Fearing said historically the waitlist is around 40 families, but in the past two years, it has consistently had more than 60 families on the list.
When adding people to the waiting list, Fearing said he’s hearing a familiar story about the situation more potential homebuyers find themselves.
“We often hear from home buyers that they cannot save for a down payment as fast as home prices are increasing. When buyers do find a home for sale in their price range they are often outbid by a cash buyer,” Fearing said.
This story was originally published November 1, 2021 at 5:00 AM.
