Whatcom County can be broken into different areas, all of which are listed in the lefthand column of the chart below. Each area has its own market characteristic based on amount of inventory, how many of those homes are selling, at what price, and how fast.
How many homes are selling and how fast is what we’re looking at when we talk about “Abosorption Rates” — which are measured in months. Simply stated, if we have 100 houses for sale and 10 are selling per month, we’ve got an Absorption Rate of 10 months — that is, it would take 10 months for the rest of the inventory to be “absorbed” if no other homes came on the market.
As a general rule, markets with a greater-than 6-month absorption rate are considered “Buyer’s Markets” and a less-than 6-month inventory is a “Seller’s Market.”
Based on this chart, we have ALL Buyer’s Markets in these greater Whatcom County areas. Within each given area there will be “Seller’s Markets” on a micro-market level. For example, in Bellingham, the core neighborhoods like Columbia, Lettered Streets and Sunnyland are all, statistically, Seller’s Markets. The Lettered Streets currently has an Absorption Rate of 4 months, so it’s a Seller’s Market.
How might one use this data? One way would be for all the aspiring spec house builders to look hard at these numbers before buying lots in a given area. Do you really want to add MORE inventory to an area that already has a 32-month supply of houses? If so, you better know that area’s micro-markets very, VERY well… and zero in there.
Here’s the chart, as of the first week of October ’09. NOTE that the # of Solds for any given area is for the last 6 months.
These numbers were taken directly from the NW Multiple Listing Service. Deemed reliable but not guaranteed!
