While the home market is hot throughout Bellingham, it’s the older, more established neighborhoods that are seeing the biggest boost in home appreciation.
The Columbia, Lettered Streets and Cornwall neighborhoods in central Bellingham had the highest jumps in home appreciation compared to a year earlier, according to a report done by Zillow, an online real estate database company. Columbia’s median home value was estimated to be $324,400 in July, a 14.6 percent increase, while that estimate for the Lettered Streets rose 14.4 percent to $303,300. Cornwall Park had a 13.4 percent increase to $343,500.
The Bellingham neighborhoods with the highest and lowest median home values were at the bottom of the year-to-year growth list. The Edgemoor neighborhood home values rose 4.3 percent to $671,900, while the Meridian neighborhood rose 4.7 percent to $221,400.
11.3percentage rise in Bellingham home values in the past year, according to Zillow.
Areas like Columbia are extremely popular right now because of a mix of factors that give them a good neighborhood feel, said Lylene Johnson of The Muljat Group. Those neighborhoods also are close to many different services, including businesses and a hospital.
Home values in Bellingham are climbing at a faster rate than in much of the nation. According to the Zillow report, home values are up 11.3 percent in the past year, while the national rate was 5 percent. A newly released report from the Federal Housing Finance Agency, using different criteria, estimates that Whatcom County homes appreciated 7.3 percent in the second quarter, ranking 57th highest out of 259 metro areas.
One factor in the rise in home values is the lack of inventory. According to the Northwest Multiple Listing Service, Whatcom County’s available housing inventory was at 2.79 months in July, meaning that if no other homes or condominiums came on the market, the current inventory would last less than 3 months. A balanced real estate market typically has around 6 months of inventory.
The lack of inventory means this double-digit rise in home values is being driven by fundamentals rather than a speculative bubble, said Svenja Gudell, chief economist at Zillow. She noted that an 11.3 percent increase in home values is unsustainable, but in this situation a slowdown in appreciation is usually a steady one rather than an abrupt drop.
Johnson said she noticed Whatcom County home sales stuttered a little bit in July, with low inventory possibly a factor. While she is waiting for more months of data before calling it a trend, Johnson suspects that late summer/early fall may have slightly slower sales compared to the surge seen a year earlier.
When it comes to Bellingham home rentals, Zillow shows some surprising trends. Overall in Bellingham, rent actually fell 0.3 percent in July compared to a year ago, with the median rent settling at $1,434 a month. The median rent price takes in all possible residential property, such as apartments, houses and co-ops.
Gudell said rental markets typically go through a period of rising rents, then flatten out as more units are built. That seems to be taking place in Bellingham, which has been adding hundreds of apartments units in recent years.
Topping the list for rental rate increases is Samish Hill, which is on the east side of Interstate 5 near Lake Padden. Rents in that neighborhood rose 8.4 percent to a median amount of $2,104. Samish is one of two Bellingham neighborhoods with a median rent topping $2,000 a month; the other is Edgemoor, which rose 1 percent to $2,462 a month.
Gudell expects the rise in home values to slow down in the second half of 2016 into early 2017. The recent sharp increases in value might create a situation where some buyers are priced out of the market and will stick to renting until the market corrects itself.
“Right now it is a good seller, bad buyer market,” Gudell said.
Median home values