By Ryan Wynne
Don Elliott recently took over as president of the Whatcom County Association of Realtors, but his story doesn’t begin there. He marched with Martin Luther King, Jr. in Alabama, was a commercial fisherman in Bellingham and later became a personal cook in Las Vegas. Don Elliott’s story is interesting to say the least.
It was 1973 when Elliott began working as a commercial fisherman in Bellingham, a job he stuck with until moving to Florida in 1992. That’s when he got into the restaurant industry armed with a love for cooking. That love took him and his wife to restaurants all over the country before they settled in Las Vegas where Elliott worked as a personal chef.
“We call it a 12-year road trip,” Elliott said. “We had a lot of fun.”
But unlike many things that happen in Vegas, Elliott did not stay there. They learned that their daughter, who lived in Everson, was pregnant.
“My wife and I decided that we wanted to get in on the grandkids,” Elliott said.
Elliott’s move to Whatcom County in 2005 brought him closer to a new grandchild and into a new career. He became a real estate agent and did well from the get-go.
In his first year with John L. Scott Real Estate, Elliott was voted rookie of the year and he didn’t stop there. At the beginning of 2010, a time when home sales were slow at best, Elliott assumed the Whatcom County Association of Realtors presidency.
This is an interesting time for real estate companies. Home sales are down, way down. The $8,000 tax credit, which breathed some life back into the market, just expired. Interest rates are at near-historic lows, but they are expected to go back up soon. Needless to say, Elliott has his work cut out for him.
The Bellingham Business Journal recently had an opportunity to sit down with Elliott to find out what the Whatcom County real estate market is doing and where it’s going.
The Bellingham Business Journal: What do you like best about your new position?
Don Elliott: It’s fun. I’m a political junky and the association is involved with state and local politics. I also like sharing information with the association. Not to mention, I’ve never been president of anything in my life and I kind of like it.
BBJ: How are the association’s membership numbers?
DE: There are about 630 members, which is 15 percent fewer than the same month last year. The market has been tough. The economy has not been great.
BBJ: How did the $8,000 tax credit for first-time home buyers affect the market, and what happens now that it has expired?
DE: When the first tax credit expired last November, there was a real lull in sales, but the most recent tax credit brought sales back up. That credit, which ended April 30, caused a flurry in the office the week before it expired.
It doesn’t look like the credit will be renewed and sales will likely slow down. The credit brought a lot of people into the market who may have been waiting until later in the year to buy. Now those people have bought and we will likely see a dip in sales for a while, but sales will probably come up a bit soon. Until then, there will probably be an increase in home inventory.
BBJ: Is this a buyer’s market?
DE: It’s mostly a buyer’s market at the moment, except in the lower price range. Much of the inventory in that range was bought up by first-time home buyers who took advantage of the tax credit.
When there is an average of three to four months worth of inventory, the market favors sellers, but we are seeing closer to 9 months worth of inventory and I think sellers will end up holding that inventory for a while.
Countywide in April 2010, single-family homes sat on the market for an average of 93 days before selling. For the same time frame in Bellingham, the numbers look slightly better for sellers. This April it took an average of 84 days to sell single-family homes in Bellingham. The number of days houses sat on the market was brought down slightly by the tax credit, but sellers are holding their homes for a long time.
One reason for the large inventory, and thus the long sell-time, has to do with foreclosures. By foreclosing on homes, banks have brought a significant number of homes back into the market.
BBJ: How has the large inventory affected sale prices?
DE: Foreclosures tend to be a reduced price because banks want them to move, and banks still have a lot of inventory. Foreclosures bring down the overall price of homes on the market because appraisers look at comparable sales when assigning values to homes. Large inventories also tend to bring down the amount houses actually end up selling for. We were pretty overpriced and now those prices are coming back down.
This April in Whatcom County, the average price seller’s listed single-family homes for was $397,000, but the average sold price was much lower at $267,000. Average sold prices in Bellingham were slightly higher at $304,000, but sellers in Bellingham also saw significant reductions between sold prices and their listed prices, which averaged $478,000.
BBJ: Will low interest rates stick?
DE: Interest rates were hovering at 5.25 percent at the beginning of May, which is historically very low, but they are expected to go back up.
With interest rates as low as they are, buyers have more purchasing power. Even without the tax credit, low interest rates makes this an excellent time to buy.
BBJ: Overall, how does the housing market look this coming year?
DE: I think this year is still going to be a good time for people to buy. Prices have been pushed down by foreclosures and interest rates are still low.
The tax credit is gone, but people are still coming forward to buy homes. For many buyers, there’s a perception that recovery is just around the corner, many of whom have been waiting for the market to bottom out. For those buyers, this probably looks like an attractive time to buy.
But it’s complicated without my crystal ball, so we will have to wait to find out.