BELLINGHAM, Wash. — Bellingham’s housing market is going through the roof, driven by a surge in demand for single-family homes.
“A large number of people are trying to buy and rent here,” said RE/MAX real estate agent Todd Peed.
Zillow, an online real estate database company, reports that through April, the median home value in Bellingham was $356,700, nearly double the U.S. median of $196,500. That’s an 11.1 percent rise in one year. The median price in Bellingham is expected to climb to about $371,000 in the coming year, according to Zillow’s most recent figures.
Just five years ago, the median home value in Bellingham was about $250,000.
For Whatcom County as a whole, March home values rose 10.9 percent compared to a year ago, the 14th highest among 382 metro areas, according to a home price index report from the U.S. Federal Housing Finance Agency.
Peed sees this price pressure coming from people fleeing the volatile Seattle market and from Californians in search of a cheaper place to live, but one that mirrors the educational, cultural and recreational opportunities they enjoy in the Golden State. He saw the trend start in the early 2000s, plateau, and begin rising again as lingering effects of the Great Recession eased over the past few years.
“A lot of retirees are moving here, a lot of people’s friends and family, a lot of outdoors enthusiasts,” Peed said.
Adding to the squeeze is a shortage of single-family homes, where there’s only a two-month sales inventory in all of Whatcom County, according to April figures from the Northwest Multiple Listing Service. In a balanced market, there’s a six-month supply of homes for sale.
Middle-income residents like Kali White, who moved to Bellingham in 2015 with her husband from Seattle, fear they’re quickly being priced out of the housing market.
“It feels like when we moved here, there were more options,” said White, whose husband is a postal worker. They have two children, 3 years old and 10 months, and they rent a home in the Sunnyland neighborhood.
“I’m always looking, but the prices are going up so much. I don’t think it’s going to be a possibility,” she said.
White and her husband yearn for a space of their own, where their children can have a yard to play in. They’ve been thinking about a house in the $200,000 range, but White now sees that dream as nearly impossible.
According to Redfin, an online real estate company, it takes a $100,000 annual household income to afford a $350,000 home. U.S. Census figures from 2015, the most recent ones available, put the median family income in Bellingham at $73,501, above the national median of $68,260 and lower than the state median of $76,954.
For a $350,000 home, Zillow calculates a $1,894 monthly payment on a 30-year mortgage at 3.8 percent with 10 percent down.
“I was talking with our owner Frank Muljat the other day and he said, ‘I’ve never seen it like this,'” said Kena Brashear a broker with the Muljat Group. Muljat’s experience in the industry dates to 1967. “We’re in multiple-offer situations. It’s making people get really ready before they buy.”
At Bellingham City Hall, Mayor Kelli Linville is aware of the issue, and officials are moving to avert a crisis in which home prices and rents rise to unsustainable levels and change the city’s character. Linville, a fourth-generation Whatcom County resident, said allowing more single family homes to be built is part of a multipronged effort aimed at retaining the city’s economic diversity and growth without sprawl.
“I had a wonderful experience growing up here, and I want others to have that experience,” Linville said. “There’s a significant number of elected officials in this community who are committed to having options available.”
But even Linville’s son recently had to settle for a home outside Blaine, after looking fruitlessly in Bellingham.
And Bellingham city officials recently had to postpone a town hall meeting on the topic of housing because the planned location wouldn’t hold the number of people who wanted to speak. It hasn’t been rescheduled yet.
“Houses are going so fast,” said Jessica Howard of Bellingham, a widowed single mom. Her 3-year-old son Liam suffers from a seizure disorder and must use a wheelchair.
Howard — a third-generation Bellingham resident — can afford a median-priced home. But she needs a one-story house with doors that accommodate Liam’s wheelchair or ones that can be widened easily. She also needs a flat driveway and a garage to hold the special van for Liam. With those limitations, Howard finds herself competing against retirees for the kind of home she needs.
“I feel like I’m battling older couples,” she said. “It’s making the process so much more difficult.”
For now, she’s living in a one-bedroom apartment and sleeping on the couch because Liam’s hospital bed takes up so much space. She wants to live in Bellingham because of the school district’s excellent reputation for programs aimed at children with disabilities, and because she frequently travels to Seattle for Liam’s doctor visits.
“I’ve been watching the market for two years,” she said. “It’s hard. We’re looking at houses built in the late ’70s. There’s not a lot of money to do much repair.”
Homelessness and housing are among the most important issues Bellingham faces, according to the results of a recently-released survey of residents conducted in 2016 by the Center for Economic and Business Research at Western Washington University.
Linville cited a push for finding housing for the homeless as part of a “strategic approach” to overall housing affordability. In recent months, dozens of apartments have been built for lower-income residents and for WWU students. Some 350 new homes are being built near the new Costco at Bakerview Road and Interstate 5. Permits for 40 “multifamily units” or apartments were issued through April 2017; 232 units in 2016; 424 units in 2015, and 232 units in 2014.
Linville was hoping the additional apartments for student housing would ease the demand for rental homes, and that families would be able to buy single-family homes that once were rentals.
“One of my hopes is that we could be able to convert rental single-family homes back into single-family homes,” Linville said. “Reclaim student housing. That was one of my goals.”
But Linville said rental homes currently remain too lucrative for owners and the city was examining economic incentives and other options. Meanwhile, the city is focusing on “infill” development in existing neighborhoods.
Through April, Bellingham had issued construction permits for 65 single-family dwelling units, a pace on par with 191 homes for all of 2016. In 2015, permits were issued for 126 single-family homes, and 138 in 2014.
Meanwhile, Bellingham continues to grow. Census figures estimate the population at 83,365 in 2014, the most recent figures available. In 2010, the population was 80,964.
Holly Swanson of the Muljat Group said her client Tye McWilliams of Bellingham recently closed a deal for a home after coming up short on bids three previous tries, including one where he was outbid.
Phil and Chelsea Jackson said they feel lucky they were able to buy a home in the Columbia neighborhood before the market caught fire again.
“We looked for a good 4 to 6 months,” Phil Jackson said, whose family moved into their Kulshan Street home in October 2015. “There was more than one taken away because of the ferocity of the market. Within hours, sometimes homes go.”
Their three-bedroom, one bathroom home built in 1912 sold for $273,000, which was the asking price.
“We had a little competition for this house as well,” Phil Jackson said. Jackson, who works for the Whatcom County Parks Department and Chelsea, who works for Bellingham Schools, both wanted to stay in Bellingham because of the climate, recreational opportunities, schools and family ties.
“We’re a young family and we wrote a letter to the seller,” Jackson said in discussing their purchase strategy. “We made an offer of the asking price. But they wanted us to have it.”
Information from: The Bellingham Herald, http://www.bellinghamherald.com