At Brandon Nelson Partners we track current Active, and current Pending inventory, and we review them at least once a week as a way of staying on top of market conditions.
As of this writing, January 11, 2020 there are 102 Active listings of single family homes (NWMLS areas 860 & 865, not including condos), and there are 82 Pending listings.
We would say, then, that the pending percentage is 41%.
It is widely known and widely discussed that there is a housing shortage here in Bellingham, WA. (To be clear, there’s a crisis-level housing shortage and an affordability issue in most markets around the US. Just Google “US housing shortage“).
Let’s look at some more numbers and infographics from the NWMLS. First, I’ve shared this image before, but it’s worth repeating. This shows the trend of “Active” listings over the past 10 years in the Bellingham area.
The obvious trend is the diminishing supply, less and less each year, with inventory (predictably) extra-lean in the winter months.
I’m going to show the same graph again, but with another layer added, and that is the number of actual sales. Here’s that infographic:
What’s the significance? The number of sales (reflected in the blue area at the bottom of the graphic) is relatively flat — meaning, almost the same year over year. The approximate number of sales year over year doesn’t change much. But look at the number of sales as a percentage of available inventory.
The choices those buyers have has diminished radically. And when demand increases or stays the same but supply drops and drops and drops… what happens?
Prices go up.
In the year ending on January 1, 2015, the average price for a 3-bedroom, 2-bath, 2000 square foot house in Bellingham was $355,429.
By January 1, 2020, the same house sold for an average of $551,690
That’s a 55% increase over 5 years.
What could possibly cause prices to increase that much in just 5 years. It’s a combination of two things:
The City of Bellingham’s “Housing Stats” web page puts the City’s 2019 population as just over 90,000. Check out this population growth graph:
With the average Bellingham household containing approximately 2.5 people per unit, there is a need for 560-ish new housing units every year to keep up with current growth.
As of this writing, the demand is expected to continue at its high rate, and although builders are doing what they can to keep up, our housing shortage is predicted to continue for the foreseeable future.