Bellingham’s home prices are expected to rise in 2018, but not at the sizzling rate seen last year.
That’s the forecast from Zillow, a real estate database company that released a report on the hottest housing markets across the U.S.
High-tech communities dominated the list, led by San Jose with a predicted 8.9 percent increase in 2018. Seattle was third on the list, with a predicted 5.4 percent increase.
Zillow’s economists are predicting Bellingham homes will appreciate about 3.1 percent this year. They also said the hottest neighborhoods, in terms of home appreciation, will be Lettered Streets (up 4 percent in the next 12 months), York (up 3.8 percent) and Columbia (up 3.7 percent).
Zillow senior economist Aaron Terrazas said they expect to see interest rates rise this year, particularly as the new federal tax reform legislation kicks in.
$350,600 Estimated median value of homes in Whatcom County, according to Zillow
“That (interest rate increase) will eat into buyer affordability – particularly at the top end of the market and particularly in a market like Bellingham, which hasn’t seen the wage growth in larger markets like Seattle,” Terrazas said. “More inventory should also be coming online as builders expand production, especially in the more affordable segment.”
Terrazas acknowledged that when Seattle’s market is hot, it has an impact in communities like Bellingham as more people who work in the Seattle area look up here to buy a house and commute or telecommute. While Seattle is third on the hot market list, he expects Seattle market to also slow because of rising interest rates.
Zillow estimates Whatcom County home values appreciated 10.3 percent, pushing the median value to $350,600. Among homes sold last year, the median price was $344,000 in Whatcom County, up 9.2 percent compared to 2016, according to a report earlier this year by Troy Muljat of Mujat Group Realtors.