By Mike Kent
I often get asked how long this housing shortage will last and how high prices can go. The short answer is: so long as there are more buyers than homes, the shortage will continue; so long as there is more demand than supply, prices will keep rising, likely to levels we’ve never experienced.
We’re currently experiencing the highest average prices ever seen in Blaine and Birch Bay. Communities like Birch Bay Village, which historically would have 35 to 40 homes available at any given time, are down to fewer than a dozen. The same trend holds true in Sealinks, Point Whitehorn, the Salishan neighborhood and, yes, even Semiahmoo, where prices were once considered lofty in comparison to Bellingham. Now they’re seen as a bargain.
Many buyers who are losing faith that they will find the right house at the right price are turning to the option of building, only to learn there are few lots to choose from and building costs have followed the market rise
Spending $200 per square foot is common, while just a few years ago breaking $100 per square foot seemed newsworthy. You would think that the weakness of the Canadian dollar would free up inventory as Canadians cash in on the strong greenback, but that hasn’t occurred.
Most who want to keep a vacation home know that swapping for one in Canada commands crazy prices.
We continue to see approximately 15 percent of buyers coming from Vancouver.
An increasing number of domestic buyers are purchasing in Blaine and Birch Bay after they’ve given up on finding a home in Bellingham. Many have opted to trade a longer commute for better selection at prices that typically fall 30 percent below Bellingham prices. Plus, early retirees are now showing up after cashing in on the skyrocketing home prices in Seattle, where the median home price just broke $700,000.
But let me get back to the original question: how long will this housing shortage last and how high can prices go?
Expect shortages to continue through at least 2018 with some easing in late 2017 as builders scramble to get permits while land developers dust off dormant projects knowing there are ready buyers waiting for their product.
Don’t count on the shift to a buyer’s market anytime soon. People moving to the area outpace permit applications with a few exceptions. While prices rose approximately 7 percent countywide last year, expect a 10 to 12 percent rise in 2017.
Finally, if you’re considering selling in order to downsize or move up, make sure you’ll be able to find a home to go to. This is one of the key reasons we have low inventory, as sellers are holding back without a place to go.
If you need to sell, now is an excellent time. If you don’t have a need to sell now, it’s an even better time to wait and watch your investment grow.
For first-time home buyers, listen carefully to your lender’s advice in getting financially prepared to make an offer and be ready to act when your realtor spots that new listing that meets your criteria.
Yes, you can still buy a home for little to nothing down but your expectations may have to change as prices soar. Last year’s $250,000 home is becoming extinct and the ones available will likely need some TLC.
It’s a great opportunity for young buyers to start a nest egg with some sweat equity.