Real estate sales statistics in Whatcom County have provided an excellent example of why one must look into the numbers to see what is actually happening in a market.  Let's use Bellingham as an example.  6% fewer homes sold in 2006 than in 2005.  At the end of the year the number of homes with sales pending was down 5% and the number of homes for sale was up 35%.  Those numbers are straightforward - now we get to the interesting one. 

Despite these indicators of decreased demand, the average price of a Bellingham home that sold in 2006 was up 12% over 2005.  Anyone who has been watching the sales of homes in Bellingham over the past year knows that this makes no sense.  But numbers don't lie, so what is happening out there?

If we break the numbers down, the answer becomes clear:  more homes are selling in higher price ranges, fewer homes are selling in lower price ranges, and this is not happening because homes are appreciating into higher price ranges - they aren't.  Average prices for 85% of the homes sold in Bellingham have been stagnant between 2005 and 2006.  On the other hand, the average price for the top 15% has increased substantially - and this is the important part - because substantially more of them have sold.  What price range are we talking about?  Over $500,000.

What does this mean to sellers in 2007?  Get your price right when you first come on the market or you will probably get less in the long run (and it may be a long run).  If your price is right, you can still generate competitive buyers, which will get you more money and get you moved.

What does this mean to buyers in 2007?  Get yourself educated so that you know a good value when you see it and be prepared to move quickly with a strong offer.  In this market everyone is looking for a "good deal", and they are like bees to honey when one shows up.  Don't ignore a property just because it has been on the market for a while - the price may now be realistic.  Don't wait too long to make that decision or someone else will beat you to it.

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