It was a record year for home prices in Whatcom County, but the rapid rise in 2017 may start slowing down in 2018.
The median price for all homes sold in Whatcom County last year was $344,000, up 9.2 percent compared to 2016, according to a report put together by Troy Muljat, managing broker of Muljat Group Realtors.
Muljat based the report on data from the Northwest Washington Multiple Listing Service. Home prices rose even though the number of homes sold in Whatcom County was down 3.4 percent because of tight inventory.
The rise in home prices was even stronger in Bellingham – the median price for homes sold was $398,000, a 9.6 percent increase. Sudden Valley had the biggest jump, rising 13.3 percent to $299,000, followed by Lynden, which rose 12.5 percent to $350,000.
Muljat doesn’t expect those price jumps to happen in 2018, despite inventory remaining low.
“Currently, the rate of increase for the single-family housing market is unsustainable,” Muljat said in a news release accompanying the data. “We do see the market increasing in 2018, but stabilizing over the coming years.”
In a phone interview Muljat said that Whatcom County has had a strong comeback from the real estate bubble burst about 10 years ago. While momentum could slow on its own, the expected rise in long-term interest rates will also do it.
“Is this the year that interest rates finally increase?” Muljat said. “If so, that will be a headwind for the real estate market.”
With significant home construction projects happening in several areas, including in north Bellingham, inventory levels should rise and help ease an overheated market, Muljat said.
The housing market was particularly active in Lynden, which had 22.7 percent increase in homes sales to go along with the double-digit rise in median home sale prices.
Muljat said that a flurry of home construction up there was an attractive option for those in the market for a new home.
The rental housing market is expected to remain tight even with a flurry of apartment projects planned or underway, said Muljat, who is also co-owner of Landmark Real Estate Management. He noted that Bellingham rental vacancy rate remains at under 1 percent.
“We’ve had pent-up demand for too long,” Muljat said, noting that there wasn’t much apartment construction in the area from 2005 on through the recession. He said adding about 1,000 units in Bellingham would help ease the low vacancy crunch.