I’m continually asked what direction real estate is headed in 2020, and never before has it been clearer to predict.
The factors that most affect real estate trends up or down are always going to be supply and demand, interest rates, employment and affordability. In the past, the general Blaine market, which we in real estate call “area 880” (comprised of Birch Bay, Semiahmoo and Blaine), has had shifts of one or more of those factors each year.
This year, all the influences of a strong sellers’ market are in play. Inventory is at record-low levels; Birch Bay Village, for example, which usually has 30 to 35 homes available, has had less than 10 for more than a year. On average nationally, 10 percent of homeowners are moving in any given year, and we are experiencing far less than that throughout all of Whatcom County. We have inadequate new construction supply to meet current demand, resulting in many houses being bought and sold before they even get listed.
Meanwhile, interest rates have dropped to historically low levels, and the feds are hesitant to raise rates in order to ensure the economy stays strong. Employment prospects in 2020 look bright for our community as new and expanding downtown Blaine businesses emerge and the former Blaine airport site is poised for expansion of companies and jobs.
The one factor which is of concern is affordability for those who have yet to purchase a home or are searching for a place to rent. Young home-seekers are struggling to save up for a down payment fast enough to keep up with rising prices. This becomes especially challenging as builders focus on more expensive homes to justify a return on ever-increasing land costs, and buyers for these higher-priced homes are plentiful as they move from areas where prices are much higher such as Seattle and California.
The wild card for Blaine real estate which has largely been forgotten is the Canadian dollar. Whatcom County, including Blaine, has weaned itself from economic dependence on the loonie with the exception of, say, gasoline, cheese and dairy products. Less than 10 percent of real estate purchasers are coming out of the Lower Mainland today compared to as high as 70 percent when our currencies were at par.
The lowest point for the loonie occurred on January 21, 2002, sinking to 0.62 cents U.S., and its highest point occurred on November 2, 2007 when it reached $1.07 U.S. This is important to note, as it took just over five years for this huge swing to occur. It could happen again, which would add even more pressure on our already soaring real estate values.
As I was writing this article, I actually received a phone call from a purchaser planning to move to Blaine from Texas, and she said, “In watching the market over the past year, is no one leaving Blaine?” That is not only true but a compliment to our area, as far more folks are wanting to call Blaine home than wanting to leave.
Over the past 20 years, I’ve met many who have forgone transfers, promotions, sunshine and even Starbucks to remain here. Now that we have our Starbucks, we will continue to become even more desirable with people paying ever-higher prices to have the 98230 zip code in their return address.
Mike Kent is a realtor with Windermere Real Estate. Every Saturday at 10 a.m., he hosts the weekly “Radio Real Estate” program on 790 KGMI.