Tom DeRose
Coldwell Banker Miller-Arnason
Tom DeRose :: Wireless: 360-220-9355 :: Email: tderose@coldwellbankerma.com
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Supply of Inventory of Homes for Sale
Posted on August 11, 2010
Another indicator of the condition of the housing market is supply of inventory, measured in months. The indicator is based on the number of homes selling at the present time, and the number of homes for sale at the present time. For example, if 10 homes were sold in July, and there are 100 homes for sale, there would be 10 months of inventory--it would take 10 months to sell the current inventory at the current rate of sale.
Six months of inventory is considered neutral. When there are more than 6 months of inventory, the market is considered to be a buyer's market. When there are less than 6 months of inventory, the market is considered to be a seller's market. In a buyer's market, prices tend to be decreasing. In a seller's market, prices tend to be increasing.
Notice in the graph below that we are close to 14 months of inventory in Whatcom County. Definitely a buyer's market with prices falling. Also notice the cyclical nature of inventory--inventory is lowest in the winter and highest in the summer. Also notice that we are trending up and have been since 2007.
Post a Comment : Author: Tom DeRose
Percent of Original List Price Received at Sale
Posted on August 11, 2010
The percentage that the sale price is of the original list price is another indicator of the health of the housing market. (Here's an example: A house that is listed at $100,000 and sells for $90,000, has a list price to sale price percentage of 90%) Notice in the graph below that the list price/sale price percentage has been continuously trending down since 2007.
This decrease in list price/sale price percentage is another indicator that we are in a buyer's market. Buyers have so many homes to choose from, and they are concerned that the price they pay today for a home will be more than its worth in 6 months, so they sucessfully negotiate the sale price down. Many sellers are happy to get an offer, so they tend to accept lower offers. Also, many sellers are concerned that if they don't sell their home now, it may in fact be worth less in 6 months.
Notice that the list price/sale price percentage in July 2010 was down sharply to 90%. Also notice that the percentage was increasing throughout 2010 up to July. This is likely due to the Federal tax credit--buyers were eager to buy a home and take advantage of the credit, so there was less negotiation going on. In fact, in Whatcom county, there was a shortage of homes listed at around $200,000 or less. So buyers were happy to find a home they could buy, and less likely to pause to negitiate.
Post a Comment : Author: Tom DeRose
Signs Indicate Tough Times Ahead in Real Estate (and the economy in general)
Posted on August 11, 2010
There is a lot of data in this graph of home sales, new listings, and pending sales in Whatcom County, and therefore difficult to read. However, the data is import in that it shows where we are headed in real estate sales.
For this discussion, I'll focus on homes sales in July of 2007, 2008, 2009, and 2010 (the gray line in the graph). 290 homes sold in July 2007. 230 homes sold In July, 2008. Sals In July, 2009 also were 230. But in July of 2010, home sales were 130. So while sales held from 2008 to 2009, there has been a 43% decrease in July of 2010 Furthermore, home sales are trending down in 2010, while they were holding stable in 2009, and trending up in 2008.
Post a Comment : Author: Tom DeRose
Prices Homes List for and Sell for
Posted on July 21, 2010
The data displayed in the table show home sales for the last 6 months in a part of Bellingham along Chuckanut Drive. These 6 homes are all of the homes that sold in this area of town for between $300,000 and $600,000.
What is particularly striking is that many of these homes sold for from $100,000 to $200,000 less than their original list price. Also, most of the homes were on the market for a half year to more than 2 years. These drastic reductions in price, and the length of time it takes to sell a home, is common with higher priced homes ($500,000 and above) in Whatcom County. This segment of the market has been particularly hard hit in the past 2 years.
It should be pointed out that in nearly all of these home sales, the list price was gradually reduced until it was at or near a fair market price. In general, buyers didn't make offers that were $100,000 less than current list price.
| Original list price | Sale price | Days on market |
| $449,000 | $350,000 | 330 |
| $599,000 | $355,000 | 200+ |
| $595,000 | $390,000 | 145 |
| $520,000 | $432,000 | 726 |
| $464,000 | $390,000 | 153 |
| $539,000 | $500,000 | 50 |
Post a Comment : Author: Tom DeRose
Home Buyers in Whatcom County--Who Are They
Posted on July 21, 2010
Here's a brief analysis of people buying homes and selling homes in Whatcom County in the first 6 months of 2010. The data shows the percentages of buyers and selles who bought or sold to move into a larger home, move into a smaller home, for investment, etc.
| First-time home buyers | 20% |
| Selling and moving up to a larger home | 10% |
| "Empty nesters"-- selling a larger home in which they raised their family and buying a smaller home | 10% |
| Relocating into or out of the area | 10% |
| Buying for investment | 10% |
The remaining 40% of buyers and sellers are doing so for various other reasons. The large number of first time home buyers is likely due to the first time buyers tax credit that in April. Many homes were purchased in the last few weeks of April so buyers could take advantage of this $8000 credit.
Post a Comment : Author: Tom DeRose
Buying or Selling a Condo in Bellingham
Posted on June 19, 2010
This is a great time to buy a condo in Bellingham. If you have to sell a condo in Bellingham, brace yourself.
The graph below shows the list price and the sale price of all condos for sale in Bellingham in the past 14 months. Notice that in most months, the sale price is considerably below the list price. There are some months when the sale price is above the list price. That's because the data includes all condos for sale, and all condos sold. If expensive condos sell, and there have been a number of million dollar sales, the data reflect those high-end sales.
Notice also that the list price of condos continues to go down: from a median price of around $250,000 14 months ago, to a median list price of around $220,000 last month. That's about a 12% reduction in price--consistent with the decrease we have experienced in all home sales in Bellingham.
But the situation is even worse than this graph indicates. The list prices used to create this graph are actually the last list price before the condo sold. Many condos go through a series of price reductions until they get to a price at which they get offers. For example, a condo that recently sold was listed for 880 days, the original list price was $950,000, and it sold for $660,000. Not all condos are reduced this drastically before they sell, but many are.
If you want to buy a condo, step up. If you are selling, brace yourself.
Post a Comment : Author: Tom DeRose
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