New homes are so hot in Bellingham, reservations are set before framing is complete
When it comes to new homes in Bellingham, Alex Wynstra knows the demand continues to outpace supply.
Wynstra, whose company is building homes for Caitac in the north Cordata neighborhood, saw another example of it in January. The company officially opened the sales office for a new development phase called North View Homes on Friday, Jan. 21. The phase will have 29 single family homes and 18 duplexes, offering a variety of floor plans and energy-efficient products that include solar panels.
Many of the new homes were already reserved and by Monday, Jan. 24 they had five more offers. Prices for the homes aren’t published, but nearby homes were advertised below $500,000.
Along with some projects in the King Mountain and near Whatcom Falls Park, Caitac’s work is one of the few areas where multiple single family homes are being constructed in Bellingham.
That’s meant the pace of new homes coming on the market in Bellingham is woefully behind demand, ensuring that 2022 will be another year where the sellers have the leverage and the buyers will have to contend with multiple offers and paying above the asking price.
The Northwest Multiple Listing Service estimates that Whatcom County homes went for 103.3% of the listing price in 2021. The median price for a home sold in Bellingham was $630,000 and those homes took an average of just 17 days to sell, according to a year-end report put together by Troy Muljat of Bellingham-based Muljat Group Realtors.
“I don’t see a foreseeable change through at least for the first three quarters (of 2022),” said Darin Stenvers, branch manager at the John L. Scott Bellingham office.
Currently buying a new home in Bellingham is like looking for lost treasure. When Stenvers checks the Northwest Multiple Listing Service for sales of homes that were built in the past year or two in Bellingham, it’s unusual to come up with more than a handful in a city that has around 90,000 people.
Even if interest rates rise, which would price more potential homebuyers out of the market because of higher mortgage payments, Stenvers doesn’t think it will slow demand in the Bellingham market. That’s because many of the final sales are all-cash offers, Stenvers said.
“Since so many can’t buy a home, that means rent will stay high as well,” Stenvers said.
When you add in older homes, the supply remains very low. According to the Northwest Multiple Listing Service, the average inventory level was less than a month across all of Whatcom County in 2021. That means if no homes come on the market for sale, it would take less than a month to exhaust the existing supply.
Across the multiple listing service area, which includes most of Washington state, the last time inventory was above four months was in 2012.
With the expectation that it will be a difficult year for buyers, Stenvers said they’ll need to be cautious when it comes to making offers. If a buyer sees a situation that might have multiple offers, they should still ask for at least a pre-inspection (one made before an offer is made on the house), so that they have an idea of what repairs might be needed.
“Be willing to pay the price you can live with, including what you might have to pay in repairs,” Stenvers said.
Construction activity
While not keeping up with demand, it was a busy year for home construction in Bellingham according to city permit data. Permits issued for single family homes (which includes some townhouses on a single lot) totaled 223 in 2021, the highest single-year total since 2004.
Between 2014 and 2020, permits issued annually ranged from 119 and 219.
While a lack of available lots continues to be a factor for why supply is not keeping up with demand, homebuilders face other challenges. The permitting process and costs in Bellingham draws complaints from developers.
Supply chain issues for home products also remain an issue, with prices going all over the place, Wynstra said. He said they’ve tried to lessen the volatility by pre-ordering many products like lighting and plumbing fixtures.
Lumber in particular continues to be an issue, with prices rising 43% in the past month, Wynstra said. Because of this, the company takes reservations for new homes but are not actually reaching a selling price until after the framing is complete.
When it comes to getting products, Wynstra said they’ve been more successful using smaller, local manufacturers.
“Things made in larger factories seem to have the most trouble — like windows. Windows have been a big problem,” Wynstra said in an email.
This story was originally published January 31, 2022 at 5:00 AM.
