Foreclosures Homes Driving Down Home Prices in Bellingham

The average and median home prices in Bellingham, the largest city in Washington State’s Whatcom County, are being pulled down by the bargain prices of foreclosures homes in the area, just like in many other parts of the country.

Based on county real estate sales data, home prices in the Bellingham area declined by nearly 6 percent in May on a year-over-year comparison.

In the second quarter of this year, the median home price declined by 5.4 percent while the average home price dropped by 11.3 percent, compared to average and median prices in the second quarter of 2008.

The number of foreclosures homes has been rising in recent months, on a year-over-year basis, as banks have been pursuing foreclosures to completion. In May, Whatcom County had one foreclosure notice for every 759 housing units, almost reaching Washington State’s foreclosure rate.

Although foreclosures decreased compared to the previous month of April, May had the biggest number of foreclosures, with 114 housing units becoming foreclosures homes during the month of May.

The county’s jobless rate also rose to 8.4 percent in May, compared to the adjusted 8.3 percent jobless rate in April. Each of these rates is nearly double the jobless rate in May 2008, which was only 4.5 percent.

In Bellingham, home sales increased as foreclosures homes prices made other homes more affordable. The June home sales were the highest home sales on a year-over-year basis since February 2008.

Housing analysts in Bellingham said that the pace of home sales was different in each home price range. If one looks at the current home inventory, one can determine which price range has been selling fast and which has been taking time to sell.

As of June 30, homes priced below $300,000 had over 5 months worth of supply, a decrease from the April supply of 7.2 months and the January supply of 9.7 months.

Meanwhile, homes priced from $300,000 to $500,000 had eight months worth of supply, a decrease from the January supply of 30.2 months.

Homes priced above $500,000 had over 24 months worth of supply, again a drop from the January supply of 63.5 months.
The home supply data indicates that sales for homes priced above $300,000 soared since January while sales for homes below $300,000 increased slightly.

Additionally, price reductions were sharper in homes priced higher than $750,000 while homes priced below $300,000 are nearer the original asking price. But in both price ranges, foreclosures homes pulled down the prices.

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