This recent article from the Bellingham Herald shares how the local market, particularly Bellingham, is edging toward a neutral market. You can click the image below to read the entire article.

While Bellingham has been moving toward a neutral market, Gragg Miller points out in this article that some Whatcom County communities are doing the opposite. Some areas, including Lynden, the Mount Baker area, Ferndale and others are moving more toward a buyer’s market, thanks to a surge in housing inventory.

From this April 19 article:

“Some of these areas are having more difficulty absorbing this new inventory,” Miller said. “Places like Ferndale and Blaine are seeing greater increases in housing units sold, but it’s not enough to keep up with the number of homes coming on the market.”

Overall the demand ratio in Whatcom County was 6.9 to 1 for March. A ratio of 7 to 1 is considered a buyer’s market, while a ratio of 5 to 1 is considered a neutral market. Lynden and the Mount Baker areas had a demand ratio of 10 to 1 or higher, followed by Ferndale (9.1 to 1), Blaine/Birch Bay (8.1 to 1), Nooksack (7.5 to 1), Sudden Valley (6.2 to 1) and Bellingham (5.3 to 1).

Read more here.

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.

From “Best Place to Retire” to “Top 10 Adventure Towns,” you can read about many of the honors Bellingham has received over the years from the likes of National Geographic, CNN, Outside Magazine, Forbes and others by clicking on the image below:

In its annual statistical summary,  the Whatcom County real estate market reported 3,775 sales for a total value of $995,134,398. There were 2229  residential sales totaling $668,812,479, plus 414 condominium sales totaling $78,500,000.

 2009 sales ( units) continued their downward trend. All sales throughout Whatcom County were down about 10%.

 The residential resale market was the only category up by 1%. New construction sales decreased by 33%, condominiums were down 26% and land sales down 18%. These are unit sales.

 The median price declined about 6.5%( $258,000) for a residential resale home in Whatcom County. New construction prices were down about 12% ($263,000) and the median price of a condominium was unchanged at $191,000.

 Among other highlights in the annual CBMA summary:

 1.     Residential and Condominium listings decreased 8%.

2.     The highest residential sale was $2,500,000 in Point Roberts.

3.     The highest condominium sale was $740,000 in Bellingham.

4.     There were a total of 17 residential sales above $1,000,000.

5.     Nearly 75% of all residential sales were below $350,000.

 Residential sales:  Units compared to 2008

 Bellingham down 9%, median price $289,000

Ferndale down 10%, median price $260,000.

Blaine/Birch Bay up 1%, $224,000.

Sudden Valley down 3%, $231,500.

Lynden down 1%, $269,000.

Mt Baker/Deming down 14%, $135,000.

Everson/Nooksack up 17%, $215,000

Local real estate numbers are now in for August. Here are a handful of stats and my analysis for the Whatcom County housing market in the month of August, which I’ve paired with month-to-month and year-to-year comparisons.

Active Listings, Pending Sales and Closed Sales
We’re seeing less listings on the market than we have in years past. Current local active residential listings are down by about 11% from the same period one year ago.

I recently commented on the trend of rising pending home sales on the national level, and we’re noticing that same trend here at home as well. Local pending sales numbers are up 14% for the month, and they are up 8% for the year over the same period last year.

However, not all of those pending sales are turning into closed sales. Closed sales are down 10% for the month and down 15% for the year, which may be attributed to a growing number of transactions missing their closing date deadline (I’ll talk about this more later).

The graph below shows the trends in the number of Whatcom County homes for sale, the number that have sold, and the number that are pending, from June 2008 to August 2009.

Median, Average Home Prices Down

Whatcom County’s year-to-date median home price has fallen 5.3% from last year. It now stands at $265,000, compared to $280,000 this time last year.

The average price of homes for sale in Whatcom County has also dropped from this time last year (down 2.5%), from $448,000 to $433,000. As you’ll notice, the average home price is significantly higher than the median home price, as average prices are skewed upward by the higher priced homes on the market.

The following graph shows the discrepancy between the average price of homes for sale and the average price of homes sold in Whatcom County, for the past 14 months.

Condos
Condominium pending sales continue a downward trend both for the month (down 23%) and the year (down 35%). Closed condo transactions also remain slower: down 50% for the month of August and down 50% year to date.

Local Price Reductions = Rising Affordability Levels
Fortunately for buyers, price reductions have put local housing affordability levels at their highest levels in decades. Add attractive interest rates and an $8,000 tax credit for first time home buyers, and what we get is a situation that is enticing buyers back into the market (as seen in the rising number of pending home sales, both on the national and local levels).

Common Transaction Delays and Disruptions

On the downside, many local transactions are missing their closing date. Last minute demands from lenders are common and final underwriting reviews are causing delays. Inexperienced appraisers are gumming up the works as well. For those of you who are planning to take advantage of the $8,000 first time homebuyer credit, plan ahead and allow for delays.

The Road Back to a Balanced Market
Our market will need a string of months of positive sales growth if we are to get back to a truly balanced market. That is because inventory levels still place us squarely in a buyer’s market, with a 10.1-month supply of homes for sale (meaning it would take about 10 months for our current inventory levels to sell, were no new listings to be introduced to the market).

Prices will continue to correct down until we are back in a balanced market, which is characterized by a four to six-month supply of homes. Fortunately, we have already seen evidence of local prices stabilizing in the last few months. And, with the amount of activity we’ve seen in the last three months, we may have reason to believe that a balanced market is not too far away.

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.