Wow, 2020… what a year. In March, the global pandemic became our new reality and a swift economic shutdown happened, posing an unprecedented threat to our national and local housing markets…We were all nervous. But what did we see here in Bellingham? Extraordinary growth in our real estate market. I’ll share some updated stats here and try to make some sense of it.
Median Home Prices Are Up…Again
In August of 2019, the median price of single-family homes in Bellingham was $465,000. In August of 2020, the median price was up to $565,000 — almost 22 percent higher.
The increase is largely driven by low inventory and record-low mortgage rates.
If we look at the inventory of single-family homes in Bellingham, we currently have about 37 percent less inventory than one year ago (and I thought last year was challenging!). In August of last year, we had 1.9 months of inventory but by August of 2020 we dropped to 1.2 months. For perspective, 5-6 months of inventory indicates a “balanced market,” not favoring either buyers or sellers.
Adding to this, interest rates have never been lower. I’ve had buyers locking in rates for 30-year mortgages in the mid-2 percents. This is a perfect storm for a heated real estate market.
People are Moving out of Cities
We’re also noticing that the rate of people moving to Bellingham from cities (Seattle, primarily) has increased. Telecommuting is now commonplace, after all. I’ve had people from Seattle call me to tell me how excited they are that they can now work from home indefinitely, and can finally afford to buy a home.
A quick reminder that the median price of residential real estate in King County is in the mid 700’s—but in Whatcom County, we currently hover in the mid 400’s—nearly 40 percent less. People across the nation are taking advantage of the shift in workplace norms and are moving out of cities to suburbs for a better quality of life. Bellingham is feeling this trend.
(Editorializing: we are absolutely NOT a “suburb” or a typical Seattle commuter neighborhood, but instead, a community of independently-minded people who appreciate nature, balance, quirk, and/or personal space.)
In addition, as homes have become our office, our gym, our everything, others have started looking for a second home in which to quarantine. Beach houses, cabins in the woods, vacant land; all of these properties have become more desirable in 2020.
The uptick in the second home market can be seen across the country; real estate markets like Tahoe, Monterey County, The Hampton's, Aspen, Fairfield County Connecticut, The Jersey Shore, Upstate New York and Palm Springs have all seen unprecedented growth this year.
Finally, and most heartbreakingly, west coast climate change refugees are migrating north, and in my opinion, will continue to do so every year from here on out. Seven to eight months of rain sounds pretty good to a lot of people right now. We are going to continue to see growth as a result of this reality as well.
The High End Market in Bellingham
One of the most interesting trends of all…Bellingham’s high end market has also been dramatically affected this year. This graph above shows the number of closed sales for $1mil+ homes for sale in Bellingham in the last year. Look at what has happened in the last few months! It’s been common to have between 2-7 $1mil+ sales in Bellingham per month. But in August, we closed 15. Average days on market for $1mil+ homes has also decreased by 30 percent in the last year. And, anecdotally, we’re seeing multiple offers on ~$1.5 mil properties quite regularly at this very moment in time.
Only time will tell how exactly this strange year will affect the economic picture of the coming years — but I’m still feeling positive about the growth potential of our local real estate market, and more importantly — very, very lucky to live here.
