Brokers reported activity at levels we haven’t seen in a while.  Notably, while entry-level home sales have been driving the market, brokers also reported strong activity at the upper end of the price spectrum.

For the first quarter of 2010 Whatcom County also experienced a rise in inventory levels as well as a positive increase in pending and closed sales. However, the median price continued to drop due to the shift of buyers to the more affordable priced homes.  For the quarter prices were down about 8% throughout Whatcom County.

Pending sales of used residential homes were the strongest in Lynden (up 50%) and Blaine/Birch Bay (up 39%). Overall the county was up 13% from the first quarter of 2009. Closed used single family sales were up 27% in the first quarter of 2010 over the the same period in 2009. Ferndale, Blaine/Birch Bay and Lynden respectively increased the most. 68%, 32% and 25% respectively.

Median prices were down 13% in Bellingham, down 3.5% in Ferndale, up 6.5% in Blaine/Birch Bay, down 4.5% in Lynden and down 10% in Sudden Valley.

The surge, in sales, in Whatcom County is thanks to the opportunities that have been afforded to homeowners through the federal tax credit, low interest rates and increased affordability. We have seen a dramatic shift of median prices since 2007. In the first quarter of 2007 58% of the sales were under $300,000 in Whatcom County. In the first quarter of 2010 the percentage was 75. Ferndale had the largest increase from 48% in 2007 to 78% in 2010.

Recent national housing stats show an upward trend in the number of pending home sales (where the contract has been signed but the transaction has not closed). This article from the National Association of Realtors points out that this trend has actually been going on for the past six months.

West up; Northeast and Midwest down
According to the NAR, July pending home sales across the country were 12.7 percent higher than the same period in 2008, and they were also at their highest point since June 2007. Regionally, this trend is being buoyed by pending home sales in the West (up 12.1% from June, and 20% above this time last year), as pending home sale numbers in the Northeast and Midwest saw month-over-month decreases.

Tax credit motivating first-time homebuyers
As the article points out, a significant contributor to this trend is the high number of first-time home buyers who are entering the market to take advantage of the $8,000 tax credit available to them. As this deadline looms, that could have an impact on the high number of pending home sales we’re now seeing.

Future sales indicator
Pending home sales are often used as an indicator of future home sales. While all pending home sales may not close, this index is generally seen as a reliable indicator of housing market activity. More pending home sales means more buyers are in the process of closing on a home, so this is certainly encouraging news.

Inman News, a great resource I use regularly, also reported on this trend. You can read their article here.

Local stats should be in soon. So stay tuned to find out if this trend is occuring here locally as well.

Looking at the most recent local housing numbers, most numbers are moving in the right direction, with Bellingham neighborhoods coming to life and move-up buyers re-entering the market.

Recovering Market
The variable results we saw in July reflect what we’d typically expect from a recovering housing market—a few steps forward for some neighborhoods, a step back for others. Whereas comparisons to a year ago reflect some substantial gains, on a month to month basis, we’re probably going to experience some “spongy” results for a while.

Tax Credit Motivation
First time buyers are motivated by a looming deadline for the federal $8,000 tax credit, which is propelling activity. There seems to be a feeling of urgency to take advantage of this program before it goes away on November 30, 2009.

Pending Home Sales Stable
The Whatcom County housing market continues to show mixed signals, but the most important number, pending home sales, is trending in the right direction.

Pending sales are contracts that are accepted by a seller but have not yet closed. They represent the most current activity and show how active buyers are in the market. Nationally, the Pending Sale Index has increased for five consecutive months. Even though Whatcom County was about even from July 2009 to July 2008, the trend is positive. I expect the Pending Sales Index to continue rising over the next few months.

Inventory Levels Flat
While the local housing inventory levels have ebbed and flowed during the past year, recent numbers are pretty flat from this time last year. Currently, our market is at about 7.8 months of inventory (which is the current amount of inventory divided by the average monthly sales).

Closed Home Sales Down Slightly
Unfortunately, the number of closed home sales in July 2009 was down 3% from a year ago, logging 213 sales versus 220 in July of 2008. After June sales posted only the second consecutive month of year-over-year increase in about two years, it is disappointing to see fewer sales in July.

The difference in the performance of closed and pending sales is due primarily to the fact that many local sales are simply taking longer to close. Short sales, where the net proceeds to the seller will not cover the outstanding debt on the property, are taking 60 to 90 days to close, as the buyer and seller must wait for the bank to approve the sale.