Seasonal Waves of Bellingham Real Estate Inventory & Prices
Everything in the known universe experiences wave patterns. Waves are everywhere.
I love this explanation of why waves exist.
A wave is..."...a way to maximize the efficiency of the energy flowing through the natural world and best utilize the available energy..."A market is no different, be it real estate or otherwise.
Let's re-write that beautiful quote in a real estate context. An Active-inventory wave is...
"...a way to maximize the efficiency of Buyer- and Seller-sentiment through the local market's current season, and best utilize the appetite to transact..."
Here it is in nature:
And here it is in the Bellingham real estate market over 10 years:
Those peaks are the every-single-year summer run-ups in inventory.
The troughs are the every-single-winter dips.
In July 2020, we had 81 Active listings in Bellingham.
In December that same year, we had 28
.In August 2021, we had 69 Active listings in Bellingham.
We shall see what this December brings. Presumably, a new record low (?)
Is it "better" or "worse"
The phone rings. It's the CEO of that company you've always dreamed of working for.
They want you, now!
To land the job, you need to get your things in order, get moved to the corporate campus, and get your house ready and SOLD!
Only thing is, it's mid-October, and there are several weeks (at least) of pack-up and optimization before your house hits the market.
That means you'll be coming on the market in November, and if your house sells reasonably quickly, you'll be closing in December.
Here's the question: Is that...... "good" timing or "bad" timing?
Let's look at and compare some data, and see what story emerges.
Median Days on Market
A logical first data-point is "How long does the median Bellingham single family home stay on the market before selling?
"Let's look at the past 5 years and compare December to July days on market (DOM):
2016
July: 17 DOM
December: 16 DOM
2017
July: 9
December: 9
2018
July: 9
December: 9
2019
July: 10
December: 9
2020
July: 8
December: 7
Other than a larger general pattern of a shorter and shorter number of days on market, let's agree that there is no *meaningful* difference between July and December.
Single-family homes in Bellingham, per the data, sell at the same average speed whether it's mid-summer or mid-winter.
OK.....Next, let's look at the list price to sale price as a percentage. Or, do homes in the summer fetch higher relative prices than their winter counterparts?
Sale Price to List Price %
2016
July: 99.2%
December: 99.0%
2017
July: 101.2%
December: 98.8%
2018
July: 100.5%
December: 98.4%
2019
July: 99.9%
December: 98.4%
2020
July: 100.8%
December: 101.7%
For all but this last year, the summers have had the clear upper hand on fetching a higher relative sale price to list price percentage.
But that's relative to their list price, not purely the "maximum net sale price.
"If we lived in a static market where prices remained level year after year, the seasonally different sale price percentage could matter.
But "static" is not our market.
THIS is our market...
Each and every December's average sale price was higher than the July sale price, irrespective of the exact percentage of list price the homes sold for.
And there is no reason, none that we see yet, to suggest that this December will be any different.
Let's look at one final metric:
Number of Sales as a Percentage of Active Listings
So if in July we have an average of 90 homes Actively listed, and there are 45 sales that month, our number would be 50%.Here is our group of 5 years:
2016
July: 53%
December: 73%
2017
July: 64%
December: 69%
2018
July: 76%
December: 53%
2019
July: 73%
December: 70%
2020
July: 86%
December: 311%
In our five-year sample, July wins twice and December wins thrice -- particularly December 2020.
Sales of the Average number of Active listings were 311% in December, 2020.
How is that possible?
Easy: Sellers were bringing houses on the market, maintaining an average of 28 Actives on any given day, and buyers were scooping them as fast as they appeared.
The market never had time to build up a surplus of inventory. The product hit the shelf, and it got scooped.
By the end of the month, despite the low relative inventory, there had been 87 sales -- or 311% of the average Active count.
It might have been cold, dark, and wet outside... but the market was flat-out COOKIN'!
In summary, then...
Let's agree that, while there are minor winter/summer fluctuations in the data we've explored, the larger, upward market trend has clearly transcended the seasonal blips.
Therefore...If your life is changing and it's appropriate for you to sell, even as we enter fall and then winter......I say to thee:
SURF'S UP!!!
Advice for Buyers
We know this to be true:
There is less total Active inventory to look at in the winter months.
Does that mean you should shelve your buying plans until the uptick in Actives occurs?
It depends.
If you love your current living situation and have no sense of urgency or time-related goals...
Or you'd rather wait for drier, warmer weather to move...
Or some other factor that places more value on waiting than on buying now...
Then sure, wait it out.
But if now is the best time -- for your own personal, financial, logistical, goal-related, external, whatever reasons -- then by all means, proceed with your search.
And do it the same way you would any time of year:
Be prepared
Be pre-approved or have proof of funds if you're cash
Get well-calibrated to what's happening in the market right now
Get clear on your criteria, with the acceptance that...
There is no "perfect" house, so we look for an 85% match
And the other things we explain to our buyer clients about the "2021/2022 How to Be a Successful Buyer HERE & NOW!" process
It IS a process, just like selling is a process. And it works.
Sales happen all twelve months of the year. When it's your time, reach out to us.
(Here's a map of Whatcom County sales limited to just the two slowest months of the year, December 2020 and January 2021. There were 416 sales of single family homes County-wide.)
