The low number of homes on the market is leading to fewer sales and driving up home prices in Whatcom County
Local home sales in the first quarter dropped 1.3 percent compared to a year ago, according the latest report from Lylene Johnson of The Muljat Group, using data from the Northwest Washington Multiple Listing Service.
The drop was more dramatic in Lynden, which sold 38 homes, a 43.3 percent decline year over year. Bellingham’s home sales totaled 195 for the first quarter, down 3.9 percent.
The low inventory is especially apparent in Bellingham. According to Johnson, the number of Bellingham homes listed for sale totaled 213 in mid-March, down 16 percent from the same period in 2015. It’s particularly a problem for homes priced under $300,000, typically the first-time homebuyer price range. In mid-March there were 25 homes listed for sale under $300,000, down from 44 during the same period in 2015.
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The number of interested buyers doesn’t appear to be dropping, either. Johnson said she’s had a couple of buyers who were outbid on homes, so they are holding back on selling their homes until they are sure they can find something.
“The lack of inventory has created a circle which perpetuates itself: Sellers don’t want to sell unless they are sure they have a place to move, so potential listings aren’t coming on the market because the owners can’t find a house they want to buy,” Johnson said.
With plenty of buyers and low inventory, home prices are rising. The median price for homes sold in Bellingham hit $350,000 in the first quarter, up 12.9 percent compared to a year earlier. In all of Whatcom County the median price was $295,500, up 9.3 percent.
The rise in prices is also a factor in why there are so few homes in Bellingham for sale for under $300,000. Some homes that might have sold for less than $300,000 a year ago are now above that mark, Johnson said.
We’re experiencing gridlock in the Puget Sound housing market
J. Lennox Scott, CEO of John L. Scott Real Estate
As more people are being priced out of the Bellingham market, they are turning to other areas for deals. With a median price of $241,000, home sales in Sudden Valley totaled 191 in the first quarter, up 19.4 percent compared to a year earlier.
Home sales in the Mount Baker area totaled 61 in the first quarter, up 74.3 percent. It had a median sales price of $199,900.
Tight inventory appears to be a theme across Washington. In a separate report focusing on March sales, the Northwest Multiple Listing Service noted that the 23 Washington counties it serves have 1.79 months of inventory, meaning that if no new listings were put on the market, it would take less than two months before all the available homes were sold. Industry experts generally consider six months of inventory to be a balanced market between buyers and sellers.
“We’re experiencing gridlock in the Puget Sound housing market,” said J. Lennox Scott, CEO of John L. Scott Real Estate, in a news release accompanying the report.
Johnson expects it to be a seller’s market this spring and summer, with more sales taking place in the higher price ranges. In Bellingham, nearly half of the home sales during the first quarter were in the $300,000 to $500,000 price range.
New home construction is happening, particularly in Ferndale, but not enough to offset the current demand.
“I don’t see anything on the horizon that would cause a jump in inventory,” Johnson said of the coming months.