Bellingham Real Estate Market Update: March 2025 Prices, Trends, and New Housing Laws
This weather, though!
I'll take all the sun, for sure, but the cold.... BRRRR!!!!!
Are you ready for some warmth?
I'm kinda ready... I'm just sayin'.
The market, though... it didn't get the "cool down" memo.
It's been bustling busy, despite the lean lean inventory.
I'm just one of almost 1400 agents in Whatcom County, and I've got 3 listings coming on the market in the next 24 hours...
Plus five more that I am actively working on -- and we're not even half-way through Q1.
It's gonna be a fun year, it seems.
In this post I'm going to share the outcome of the little fixer-upper Bungalow sale I wrote about last week.
I'll give a quick "affordability" update for the Bellingham market.
And I'll touch on the slowly-growing-more-public-awareness laws that *hope to* change affordability and ownership throughout WA State.
Let's unwrap a few layers of fleece and down, and warm up with some hot updates.
40 Showings, 10 Offers
There were several financed offers, and the rest were cash.
It is difficult for any seller of a house that is not currently habitable -- no heat, decades of untouched wear and tear, basically in need of a full gut job -- to consider accepting a financed offer when there are cash offers on the table.
Why?
Because lenders have conditions, loans require appraisals, there are gatekeepers that can -- and often do -- hit the brakes in the 11th hour and bring everything to a grinding halt.
With a cash buyer, you have none of that.
No appraisal required, no underwriting department, no specific buyer credit score, debt-to-income limits, or fragile job situation to worry about.
Loans on fixer uppers travel a narrow, windy path.
And cash skips the whole trail, the whole cast of characters, and goes directly to closing.
The sellers of this house, the estate administrators, who are elderly and wanted nothing to do with any repairs or other hassles in order to get it sold, saw great value in the ease and very fast closing that a solid cash offer presented.
And one offer in particular ticked some boxes that none of the others did.
The winning offer paid $417,050 on our list price of $350K.
They were prepared to close in as little as 4 days... though we pushed it out to 7.
I do not know if they will live in the house after remodeling it, but my understanding is that they do plan to explore adding a second unit to the back of the property.
I got a lot of replies to the previous newsletter, sharing great hope that an owner-occupant -- even a first-time buyer -- would be the winning bidder.
I totally agree with that sentiment, as it has become nearly impossible for a growing number of would-be homeowners, even couples with dual incomes, to land -- and afford -- a house in Bellingham.
Below is a graph of Bellingham prices over the past 5 years.
The dip near the right was the more-than-doubling of interest rates to over 7% that led to the lowest number of sales the US has seen since 1995.
(That's also what led to the closure of BNP Realtors, incidentally.)
But Bellingham wouldn't linger in that dipped state for long.
On the far right, the line is essentially at the highest point in MLS and market history.
Bellingham's average price over the previous 6 months, for a 3 bedroom, 2 bath home of just over 2000 square feet...
Is now $872,791.
The median home is 1857 square feet and sold for a median price of $750,000.
Interest rates, at the time of this writing, are just above 7% again.
On a $750K purchase with a 20% down payment, $5K in property taxes and $1500 in hazard insurance, the monthly payment is north of $4500, or $54,000/year before utilities, maintenance, or $7/dozen eggs.
How does this play out?
The recent, tragic fires in southern California will result in more residents looking at our much cooler, currently safer climate as a place to live.
The fires will also cause another uptick in the cost of living, as insurance companies adjust across their entire customer base to cover the losses.
Cost of living ticks up another notch, and our already 56% tenant-occupied city takes another step towards difficulty of achieving home ownership -- the most common and net-effective form of wealth creation in the world.
And that situation is what House Bills 1110 and 1337 aim to address.
I've written briefly about them in a previous newsletter or two, but it seems time to do a deeper dive.
These "Middle housing" laws will create more density in the city, but they will (hopefully) create a new type of inventory -- a more affordable type.
1110 eliminates single family zoning inside the city limits and urban growth areas of Bellingham.
Not only does it allow up to 4, or even as many as 6 units on qualified lots, that can condomimiumized and sold to separate owners.
1337 allows up to two Accessory Dwelling Units in addition to a main house, that can also be sold as separately-owned units.
If these new units are able to be built affordably enough, to then be sold at an affordable-to-get-in-the-ownership-game price, they *should* create more and more home ownership, and more wealth-building potential for people currently unable to get on that escalator in Bellingham.
The latest report on the disparity between net worth of renters versus homeowners, puts those figures as follows:
Renters: $10,400
Homeowners: $400,000
An interesting future
Tomorrow I am listing two different Bellingham Core Neighborhood properties with prices of $520K and $795K, or thereabouts.
(Watch my Instagram feed for videos of both.)
The smaller one has room for one additional unit, if the new owner chooses to use it that way.
The larger one has room for up to 5 additional units, and since it is so close to a WTA bus stop, there would be no parking requirement for any of those units.
Or... the new owners leave them with their sizable yards and enjoy them that way.
Either way, times are about to get way, way more interesting as we see how the market -- and how society -- approaches these new laws and the potential they put on the table.
As I wrote, I'll share more about the nuances of the new laws in a near-future newsletter.
Meanwhile, enjoy the sunshine, stay warm, and I'll see you in two weeks.
