How's the Bellingham Real Estate Market in Summer 2023?
Certainly for the past 3 or 4 years EVERYONE has known the answer to this most frequently asked question
Q: How’s the market?
A: Gangbusters! (If you’re a seller.)
From June of 2018 to June of 2022, the median price of a Bellingham 3-bed 2-bath home rose from $435,000 to $710,000 or just over +63%.Then, in response to the effects of <3% mortgage interest rates, the US supply of cash increasing by >40%, and the prices of EVERYTHING going straight skyward, the Fed jacked the interest rates, more than doubling them.
The interest rate graph over 10 years looks like this:
The monthly payment on a $700K loan had been as low as $2821 (when rates hit 2.65%).
A buyer with annual income of about $68,000 could qualify for that loan.
Suddenly, rates topped 7% and that same loan amount had monthly payments of $4,700.
A buyer’s income to qualify for that loan amount shot up to $112,800 in a few short months.
Did it have the desired effect on the market?
Sort of.
There are several year-over-year metrics that can illustrate the overall market condition:
Inventory of Active listings
Proportion of listings that are pending (under contract with buyers)
Median price of closed sales
Median time on market
Let’s look at that data:
Actives & Pendings are “as of today” and on this date one year ago.
Median price and DOM are for Solds over the previous 6 months and the same 6-month period ending one year ago.
From the above information, what we have found most homeowners are curious to know is, “Has my house lost value?”
Per this data, and per our experience at BNP as we approach roughly our 50th transaction of the year, and despite interest rates and monthly payments almost doubling, we find that the buyer pool is very earnest and strong.
Across all Bellingham single-family sales in the past 60 days, we see an average sale price of just-over-100% of list price, indicating multiple offers and escalation on the average.
Of all current Pending sales, 34 (over half of the total of 62) went under contract in a single-digit number of days.
So.....?
In advising sellers, while buyer interest is solid, we do not necessarily expect a “5-day auction” or promise multiple offers and runaway escalation like during Covid.
We point out that the market, while it decidedly has not crashed, has essentially been flat since last year.
In advising buyers, we are very much suggesting they be prepared to battle for the good listings that are properly priced.
Wanting a Core Neighborhood creampuff and saying, "I'm not going to pursue a house that has other offers," is likely going to result in a pretty long buying journey.
