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Interest Rates Falling & Inventory Rising
As we celebrate the start of autumn, the season of change, the leaves on the trees are not the only things that are falling. Interest rates have gradually fallen throughout the year. Just 11 months ago, rates were almost 2 points higher; in the frothy spring market, they were nearly 1.5 points higher. During this same time, the median price in Whatcom County and Skagit County grew. In Whatcom County, the median price was recorded at $670,000 this August, which is up 8%, and at $599,000 in Skagit County, which is up 2% year-over-year from August 2023.
Another trend that we are witnessing is a rise in available inventory for sale. August recorded the highest level of available homes for sale since the fall of 2022, two years ago. There were 639 available homes for sale in Whatcom County in August 2024 compared to 279 in January 2024 and 336 in Skagit County in August 2024 compared to 144 in January 2024.
The combination of lower borrowing costs and more selection should be a welcome change for buyers. When the inventory was much tighter in the first half of 2024 and interest rates were higher, prices were increasing at a rapid rate. We are starting to see new buyers enter the market and some who have sidelined themselves return. This indicates that prices will remain stable as we finish out 2024.
Currently, buyers have more selection and the opportunity to grab a lower monthly payment. As you can see from the chart below, buyers have a significant opportunity to afford a higher price point at a lower rate or stay at the same price point and have a lower monthly payment. The reduction in rate over the last year is reducing monthly payments and creating great long-term savings over the life of the loan. The rule of thumb for affordability is a 1-point shift in rate affects a buyer’s buying power by 10%. For example, a home priced at $800,000 with a 7% interest rate will have a similar monthly payment as a home at $880,000 with a 6% rate.
The hesitation I am seeing in the marketplace is a desire for rates to come down even further. The good news is that they are predicted to continue this gradual decline. Where I am concerned is a decrease in selection. If we look at seasonality, it is common for inventory to be low in the first half of the year, especially in Q1 (see the Whatcom & Skagit graphs above). If rates continue their slide and fewer new listings come to market, buyers will find themselves duking it out in 2025. Right now, while there are multiple offers on some properties, there are more properties that are being negotiated into contracts with one buyer.
This has created a more nimble market, particularly for buyers who also have to sell their homes to reposition their equity into a downpayment. While tight inventory provides great leverage for a seller, many sellers are also buyers. Analyzing the market conditions to align the environmental influences to create the best possible outcome for your goals is paramount, and it will not be the same for everyone. Depending on my client’s goals, timing can vary.
Oh, and another sentiment I often hear is, “Will rates under 5% ever be back?” That is rather unlikely and will go down as a historic time in our economy. With that said, if you are in your “forever home” and you captured a historically low rate, kudos to you! Truly, so awesome! If you are not in the home that is right for you, now may be the time to curate a plan to get you into your next home. If homes were selling at a rapid rate and prices were appreciating this last spring with 10% less buyer power, I imagine next spring will be much of the same, if not more.
One final item to note is the election. History shows that post-election year markets are brisk with sales and experience price growth and rate decreases. I am paying attention to key indicators such as inflation figures, unemployment measurements, the gap between the 10-year treasury yield and mortgage rates, and our local market conditions in order to provide my clients with the most accurate and up-to-date information to empower strong decisions.
Are you curious how all of this affects you? Real estate is the number one tool for building wealth, and you also get to live there. I think that is pretty important, and I love nothing more than providing valuable insights, having strategic conversations, and helping people align their homes with their lives. Home is where the heart is and also where your nest egg has the most reliable long-term growth. Please reach out if you’d like to dig into the details and apply them to your housing and investment goals.
October Home Maintenance Tips
Here are a few tips to help protect your home from the elements and keep it cozy as the PNW transitions into the wet fall and winter months.
Check Outdoor Lights: With shorter days, good lighting becomes essential. Test your outdoor lights, replace any burnt-out bulbs, and consider adding extra lighting to walkways for safety during wet, dark evenings.
Install A Rain Barrel: Take advantage of the abundant rainfall in the PNW by installing a rain barrel. This eco-friendly solution allows you to collect rainwater from your gutters for use in your garden or landscaping.
Clean & Reverse Ceiling Fans: In cooler months, ceiling fans should rotate clockwise at a low speed to push warm air down from the ceiling. This can help you stay comfortable and reduce heating costs, especially if you rely on wood or space heating.
October Real Local Feature
HAVEN & MAY
At Haven + May, we specialize in home fragrance, decor, and gifts. You will find a carefully curated collection of goods, many of which are handmade, locally sourced, and support other small businesses.
Address: 6900 Hannegan Road, Suite 104 | Lynden, WA 98264
Instagram: @shophavenandmay Facebook: www.facebook.com/havenandmaycandleco/
Website: www.havenandmay.com
Email: info@havenandmay.com
Country Home – Bellingham, WA
Reservations & Information
3 Beds | 2 Bath | Sleeps 6
Kick back & relax in this calm, stylish space w/ seasonal mountain views & peaceful pond. Situated on 5 private acres just 15 min from Bellingham and 45 minutes to Mt. Baker. Take in amazing sunrises, sit around a crackling outside fire, enjoy dinner on the back deck & watching ducks in the pond. When the fruit on the property is ripe for picking enjoy apples, blackberries, plums, kiwi berries & sneak over to the 40 acre raspberry farm next door for fresh raspberries for breakfast!
NAR Settlement: The Latest Update
Here is a quick update on a topic I have been keeping you up-to-date on all year. On August 17, 2024, the NAR Settlement requirements were enacted. This required significant changes to real estate practices across the country. This made big news and stirred headlines. The good news is in WA state we made the majority of these changes back on January 1, 2024, when the law surrounding buyer agency was changed.
Since January 1, 2024, we have been required to obtain Buyer Brokerage Services Agreements (BBSAs) with buyers we are providing real estate brokerage services. These agreements can be exclusive or non-exclusive, must establish clear buyer brokerage compensation parameters, have a defined agreement term, and call out whether dual agency is allowed. I have embraced these changes and have brought value to my clients through this modernized process.
Our local MLS, the NWMLS, chose to opt out of the NAR settlement in May 2024. They felt confident that the risk for exposure was low due to advancements they have been making since 2019 to elevate transparency around brokerage compensation. Their proactive consumer-focused approach along with the new WA state law have had our state ahead of the curve.
The majority of the required practice changes required by the settlement were already in place in WA state as of January 1, 2024. Due to their choice to opt out, the NWMLS will not have to comply with the requirement to not publish a seller’s offer of compensation to a buyer’s brokerage. This is confusing to all parties of a transaction and the opposite of transparency. I am proud to run my business as a member of the progressive NWMLS and under the new law established by our state on January 1, 2024.
On August 15th, 2024, the NWMLS made some slight updates to some of their forms to coincide with the final settlement details. Most notably, buyer brokerage compensation was made more clear in the Purchase and Sale Agreement. It can be connected to what the seller is offering in their listing, what is agreed upon in the BBSA, or both. Sellers can choose to offer buyer brokerage compensation, choose not to, or request to negotiate it as a term in a buyer’s offer. Depending on how the established BBSA aligns with the Purchase and Sale Agreement, the buyer brokerage compensation will be paid by the seller, buyer, or a combination of both.
If you have any questions about the settlement and all of the changes we have navigated since 2019 until now, please reach out. I am committed to providing valuable services and clear communication to the buyers and sellers I serve. I understand that purchasing and selling real estate is one of the largest financial decisions a person ever makes and it is often related to big life changes. Navigating such importance takes great skill and care and I am committed to obtaining the best results for my clients while creating an enjoyable experience along the way.
Land Donation For Bellingham Parks
Carol and David Robinson have donated 7.5 acres of undeveloped land to Bellingham, adding permanent open space to two parks. The donation, valued at $680,000, includes a 1.2-acre wetland parcel near Connelly Creek Nature Area and a 6.3-acre conifer-forested hillside near Arroyo Park. Both properties, originally zoned for single-family homes, will now be permanently reserved for parks and open space. The city’s Parks and Recreation Director, Nicole Oliver, praised the Robinsons’ generosity and emphasized the importance of preserving natural areas as the city continues to develop.
September Real Local Feature
ALOHA BOARDS BY KYLEE
Aloha Boards by Kylee specializes in charcuterie & grazing arrangements that are almost too pretty to eat. Since 2022, Kylee has brought locally curated grazing boards and tables to events all over Whatcom & Skagit County.
If you’d ever attended one of our client events you’ve likely gotten a chance to experience Aloha Boards!
Email: alohaboardsbykylee@gmail.com
Phone Number: 360-878-6494
Instagram: @aloha.boardsbykylee
SEASHELL COTTAGE – Blaine, WA
Reservations & Information
4 Beds | 2.5 Bath | Sleeps 9
As you enter Seashell Cottage, you’ll find a cozy living area with wood siding, skylights, and a stone fireplace that creates a warm ambiance. The natural wood shiplap ceilings and a large flatscreen TV above the fireplace provide a perfect setting for intimate gatherings or relaxed evenings in. The home’s large windows flood the spaces with abundant natural light, enhancing the airy charm.
The primary bedroom serves as a private sanctuary, featuring a king bed, ample storage, a workstation, and an attached ensuite bathroom. The ensuite bathroom is equipped with a soothing soaker tub, a double sink vanity with ample storage, and a separate glass-enclosed shower, all bathed in natural light.
The heart of the home is the fully stocked kitchen. With an island, updated appliances, and plenty of workspace, it’s perfect for preparing gourmet meals. The bar seating at the island promotes a convivial atmosphere for lively mealtime discussions. The dining room, with its French doors leading to the patio, ensures a seamless indoor-outdoor living experience.
Step outside to the sunny patio, which not only boasts a relaxing hot tub for unwinding after a day of exploration, but also offers stunning views of the Pacific Ocean. The fully fenced yard makes it an ideal destination for those traveling with their furry friends.
Additional amenities include large guest bedrooms with a shared guest bath, a half bath, and a spacious laundry room with a washer/dryer and storage. A desk and high-speed Wi-Fi are available for those combining work and play.
Head upstairs to the game room for fun-filled activities, all while soaking in the beautiful bay views. And when you’re ready to venture out, nearby beaches and restaurants are ready for exploration.
Every detail at Seashell Cottage by Gather has been thoughtfully considered to provide you with a delightful and memorable stay. Welcome home to your perfect coastal retreat in Blaine, WA.
September Home Maintenance Tips
Fall is the perfect time to get your home in top shape for the colder months! From lawn care to fireplace safety and pipe protection, a little preparation now will ensure your home stays cozy and secure all season long.
Prepare the Lawn for Winter: Early fall is the ideal time to fertilize and reseed your lawn. Aerate the soil to promote healthy root growth, and apply a fall fertilizer to help your grass store nutrients for the winter. This will give your lawn a head start when spring arrives.
Inspect and Clean the Chimney: If you have a fireplace, now is the time to schedule a chimney inspection and cleaning. Removing creosote buildup and checking for any blockages will reduce the risk of chimney fires and ensure your fireplace is safe to use during the colder months.
Check and Insulate Exposed Pipes: As temperatures start to drop, it’s a good idea to inspect any exposed pipes, particularly in unheated areas like basements, crawl spaces, or garages. Add insulation to prevent freezing and potential burst pipes during the winter months.
Election Year Market Trends – A Look Back To Look Forward
As we approach November and the Presidential election nears, it would be good to look back on how election years have historically affected the real estate market. There is certainly a lot going on and this stimulation can cause pause. Buying and selling real estate is a big life event and the election is a big national event. Some buyers and sellers will delay their moves until after they know how the election is going to pan out. Sometimes this delay is caused by pure distraction and sometimes there is a level of uncertainty that is created until a decision is made.
Here is some interesting data that illustrates the trends of consumer behavior surrounding a Presidential election. Interest rates, the rate of home sales, and price growth are all analyzed below. Looking back to look forward provides some concrete evidence of how a Presidential election can affect the performance of the housing market.
First, interest rates! We have recently experienced a nice drop in rates. Rates have been extremely volatile over the last two years. Last October, rates peaked at almost 8%, came down to 6.75% in January 2024, went back up to 7.4% in April 2024, and have recently dropped to the lowest level we have seen since April 2023 and are hovering around 6.5%. This is largely due to inflation finally settling and a recent jobs report showing increased unemployment. This trend is predicted to continue as the Fed considers a rate cut in September with the plan of easing rates as we finish 2024 and head into 2025.
The chart below shows what rates have done over the last eleven election cycles and it certainly looks like the current trend with rates follows historical norms. This is an opportunity for buyers to jump into the market as this reduction in rate is accompanied by an increase in inventory. With lending costs lower and more selection buyers could even find themselves in a position to negotiate a further reduction in rate to help with the overall affordability of a purchase.
The market is very much driven by what a buyer’s monthly payment would be. Lending costs are a huge factor that will play into consumer confidence and the amount of sales happening. Further, we expect more home sellers to come to market as rates ease as they will be more inclined to give up their low rate to move to a home that is a better fit for their lifestyle.
The chart below shows the increase in home sales in nine out of the eleven past election cycles. In fact, the first year after an election is historically robust with activity. If history repeats itself in 2025, buyers who are ready may want to consider making a move now. With the dip in rate, increased selection, and some buyers sidelined it could be a great time to make a purchase with a little less competition.
Even better news is that historically prices increase after an election year. In seven out of the last eight post-election years, prices increased. The only year they did not, was 2008 which was in the hollows of the Great Recession. Of course, we will not be able to measure this until a year from now and this will be something that I will be paying close attention to.
So far, 2024 has been a year of price growth. We experienced huge gains in the first half of the year over 2023. 2024 marks the year of recovering from the 2022 post-pandemic correction and re-gaining price stability. At the end of 2023, it was reported that the average homeowner had at least 62.4% home equity in Whatcom County and 61.6% in Skagit County. We expect the movement of this equity to become more nimble as the cost of borrowing money comes down.
What we have in store over the next three months will be distracting, stimulating, and just a lot. I hope the information above provides some history that helps ground the facts during a time of heightened angst and uncertainty. As always, life dictates changes in real estate needs. If you or someone you know has come up on some life changes that indicate a move would be beneficial, please reach out.
Despite the chaos of the election, you can never plan too early for these big life transitions and there might be some great opportunities amongst the noise. Whether it’s a purchase, a sale, or both, I am equipped to help you assess your goals and help you devise a plan. The best time to make a move is when you’re ready and I’m here to help.
August Real Local Feature
CHOICE CONCRETE
Choice Concrete is a trusted local residential flatwork company based in Whatcom County. We specialize in creating high-quality driveways, patios, walkways, and a variety of other concrete structures that enhance the beauty and functionality of your home. Our team is dedicated to delivering exceptional workmanship and ensuring complete customer satisfaction.
At Choice Concrete, we believe that every project is unique and deserves personalized attention. Whether you have a clear vision or need guidance to bring your ideas to life, we are here to help.
From the initial consultation to the final finishing touches, our goal is to make your experience smooth and enjoyable. Choose Choice Concrete to transform your outdoor spaces with quality and care you can count on.
Email: Choiceconcrete@live.com
Phone Number: 360-441-2749
Instagram: @choice_concrete
LAKESIDE BUNGALOW – Bellingham, WA
Reservations & Information
3 Beds | 2 Bath | Sleeps 8
Charming lakeside bungalow, your perfect getaway! Nestled on the serene shores of Lake Samish, our charming bungalow offers breathtaking views of sparkling lake and majestic mountain.
Wake up to nature’s sounds and enjoy your morning coffee on the spacious deck. Inside, you’ll find a cozy, well-decorated interior with all modern amenities. Whether relaxing by the fireplace, enjoying water activities, or exploring nearby trails, our bungalow is the ideal retreat.Your peaceful escape begins here!
Maximizing Your Property’s Potential – What You Need To Know About Middle Housing
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