Is Whatcom’s red-hot real estate market finally cooling? Here’s what’s happening
With interest rates continuing to rise, the pendulum for Whatcom’s real estate is starting to swing toward buyers after being a seller’s market in recent years.
The April real estate data for Whatcom County show signs that changes are afoot: Home sales were down year-over-year and inventory is up, according to the late totals compiled by the Northwest Multiple Listing Service.
The number of Whatcom County houses and condominiums sold last month by real estate agents totaled 267, down from 305 in April 2021. The number of new listings last month was 473, up from 428 compared to a year ago. The new listings pushed Whatcom’s inventory to over one month. While that is still very low, it’s the first time inventory was not under one month this year. A balanced market typically has around six months of inventory.
“I’m starting to see inventory build nicely around here,” said Darin Stenvers, branch manager at the Bellingham John L. Scott real estate office. “Buyers are starting to see more and better choices.”
While on the surface that’s welcome news for buyers, being able to afford the purchase has become much more difficult the past few months. The average 30-year interest rate hit 5.27% this week; at the end of 2021 it was at 3.11%. That jump in interest payments means less buying power, making it more difficult to afford current asking prices. This could lead to a drop in asking prices for houses later this year, Stenvers said in a telephone interview.
When Whatcom’s real estate market was really hot, interest rate changes didn’t have as much impact because more than half of the sales were all-cash offers. Stenvers noted that in the past week, all-cash sales were a little over one-third of overall sales.
At some point the number of cash buyers is reduced because higher interest rates make it more difficult for them to sell their current home and move here, he said.
It’s possible that prices are already starting to flatten out. The median price for houses and condos sold in April was $585,000, a 17% jump compared to a year ago. However, the median price was $619,975 in March, when 30-year interest rates were in the 4% range.
The drop in median price from March to April could be a variety of factors, including fewer higher-end homes selling in April.
There are other signs that rising prices haven’t quite ended. King County made headlines for hitting nearly $1 million in median price sales last month and double-digit increases are still common throughout Western Washington.
“Even with rising mortgage rates, inflation and high gas prices, the housing market remains strong with prices continuing to increase,” said Dean Rebhuhn, owner of Village Homes and Properties in Woodinville, in a news release accompanying the Northwest Multiple Listing Service data. “Inventory is improving in most counties giving buyers more choices and making sellers a little more flexible.”
Stenvers agreed about the flexibility, saying potential buyers are able to make traditional requests like contingency offers and home inspections without worrying as much about missing out.
“Sellers are now working harder to make a house market-ready,” Stenvers said, adding that they realize the market may slow even further if interest rates continue to rise.
