2006 Real Estate Predictions - Updated
Last December we looked at the Whatcom County real estate market and saw rising inventories, strong pending sales and slight declines in interest rates. Looking ahead through our crystal ball we saw a "strong, rising market, particularly in those areas where average prices are currently lower. Price appreciation closer to 15%, most of it coming in the lower ranges. Interest rates rising, but less than in 2005." Well, we can't always be right.
Looking back from the vantage of sales activity in residential and condominiums across the County through the 3rd quarter, we see an increase in inventory of 72%, a decline of pending sales by 15% and increases in both median and average sold prices by 4% and 3% respectively. When we look at the year to year change from October 1 to date, we are seeing an average price increase of 1.6%. Not quite the 15% we expected at the end of 2005, but certainly not a burst bubble.
We're not ready to do an estimate for 2007 as yet - we're feeling a bit of a quickening in the market over the past few weeks and want to see how that develops. However, what we are definitely seeing is that the quickening is directly related to price. We are still selling houses within a week, even though the most current average is 52 days, but it is all about price. The best sell and the rest sit.
One of the indicators we will be watching is the number of vacant homes on the market. Owners of vacant houses usually have some pressure to get them off the market one way or another - they need to either sell them or rent them. At this point 47% of the houses and condos available for sale in Whatcom County are vacant. Many are new construction, but many are not.
So what is our prediction for Whatcom County real estate in 2006? Prices stable, interest rates still very good, inventory stable, pending sales stable but down from last summer. It sounds like a good market for both buyers and sellers: low pressure on the buyer looking for the right home and a guaranteed sale for a seller smart enough to price their home at the level of the market.
If you'd care to look at the "Market Report" section of our web site you can do so by accessing www.JohnsonTeamRealEstate.com scroll down to the bottom of the page. We have several reports that deal with the "State of the Market".
By the way, if you are interested in exchanging links with us, let me know.
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