What is the housing market forecast for Bellingham in 2023?

     As we step into 2023, it's essential to understand the predicted trends and projections for the housing market in Bellingham, Washington. Bellingham, known for its captivating natural surroundings and vibrant city life, offers a unique living experience that continues to attract residents and homebuyers alike.

Aldo, from the LeVain real estate team with Windermere, shares valuable insights from renowned economists like Windermere's Matthew Gardner, as well as Fannie Mae, Freddie Mac, Wells Fargo, and Chase Bank. 

1. Moderate Decline in Home Prices:

Experts forecast a minor decline of around 1% in home prices for Whatcom County. However, it's important to note that Bellingham and Whatcom County experienced remarkable appreciation over the past two years, with a staggering 30% increase. Thus, a 1% decrease represents a relatively small correction in the market. Homeowners who purchased their properties several years ago are unlikely to be significantly affected. However, those who bought homes in the last 6 to 9 months and plan to sell in 2023 may experience some impact.

2. Shifting Mortgage Rates:

Mortgage rates have been a hot topic in recent years, and Matthew Gardner, an esteemed economist, predicts a decline in interest rates starting in late fall. By September, rates may fall to the high fives, potentially reaching around 5.85% to 5.99%. Looking ahead to spring 2024, rates are expected to approach 5%. With interest rates gradually decreasing, potential homebuyers may have the opportunity to secure lower rates or buy down their interest rate to around 5%. This shift presents a favorable situation for prospective buyers.

3. Limited Inventory:

Bellingham continues to face a challenging housing market due to limited inventory. Currently, the region has around two months of inventory compared to the previous year's one month. While there is a slight increase in available homes, it is still insufficient to balance the demand and supply equation. Many homeowners who refinanced their homes over the past couple of years at historically low rates, around 2.5% to 3%, are now reluctant to sell unless necessary. This trend has resulted in some becoming accidental landlords, renting out their properties instead of selling. Consequently, the inventory shortage is likely to persist throughout 2023 and even into 2024.

The Opportunity for Homebuyers:

Despite the challenges posed by rising interest rates and limited inventory, 2023 presents a unique opportunity for prospective homebuyers. With interest rates projected to decrease in the coming months, buying a home this year could prove advantageous. As interest rates decline, home prices are expected to rise again. Bidding wars have already been observed in Bellingham, with offers exceeding asking prices by $20,000 to $40,000 even at the current interest rates of 6% to 6.5%. Imagine the potential when interest rates drop to 5% or even lower. By purchasing a home in 2023, buyers can benefit from future appreciation while taking advantage of lower interest rates through refinancing.

      As we navigate the Bellingham housing market in 2023, it's crucial to consider the forecasted trends. A moderate decline in home prices, shifting mortgage rates, and limited inventory shape the landscape for both buyers and sellers. If you have the opportunity to buy a home in Bellingham this year, it may be wise. As for sellers it is still a market in favor, but when you bought and the other many home factors can effect your total gain. 

We help both buyers and sellers, all with different types of situations and their own real estate goals - Reach out to us if thinking of moving to the area! We are happy & ready to help!