Whatcom County

Who is coming to Bellingham, and why?
A look inside the numbers

Real-estate agent Mike Parcher said he has mixed feelings about the red-hot real-estate market and rapid influx of new residents; while it is affording him a growing business, he worries it could also alter the quality of life that makes the area special.

   Throughout history, people have moved into a community because there are jobs and opportunities available for them. In Whatcom County, however, jobs may not be the main motivation for its newcomers.
   In fact, many are bringing their jobs with them.
   “Most of the people I’m seeing that are buying real estate in Whatcom County are those who are either planning to telecommute, have a business elsewhere that they can check in on every day, or are retiring 10 years early and can choose where they want to live,” said Mike Kent, a real estate agent at Windermere. “This phenomenon is creating some interesting changes in this community.”
   Kent said most of these first changes he has noticed have been beneficial.
“What I’ve seen from the people who have moved here recently is they are providing a huge resource for volunteerism,” Kent said. “They have the time and the energy to devote toward charities and the community. Many of them have come from communities that have seen the quality of life go down because of a lack of planning for growth, and they don’t want to see that mistake made here.”
This type of in-migration is also bringing a substantial amount of wealth to the area, said Mark Costello of Costello Design.
   “The people I see moving here are paying cash to have me build homes for them,” Costello said. “They have expendable income and many of them are generous people who want to play an active role in this community.”
   However, the influx of people entering the market has also started creating some problems. With so many people selling their homes for substantial profits in other parts of the country and purchasing real estate in Whatcom County, the real estate market has seen huge increases in the price of a home.
   According to statistics compiled by Coldwell Banker Miller-Arnason, the average price for a new single family home in the first quarter of 2005 was $300,813, up from $247,943 for the same quarter in 2004. The average price for a used home in Bellingham was $262,820, up from $214,511 for the same quarter in 2004.
   That’s great for those residents who already own a home and are ready to sell, but it is putting first-time homebuyers in a bind.
   “First-time homebuyers are being priced out of the market, and I see panic on the faces of people who are attempting to get a loan,” said Graham Youtsey, a residential-loan officer for Washington Mutual. “They are realizing that if they don’t get in now, they may have missed their chance to own a home. I have people who walk into this office with $20,000 saved for a down payment. A few years ago that would have paid for 20 percent of the home price. But today that may not be enough to pay for 5 percent, which jeopardizes their ability to qualify for the loan.”
   Youtsey said he is starting to see it become more difficult for middle-class residents to afford a home.
   “There are married couples who are both teachers having a tough time being able to afford a home,” Youtsey said. “Lending institutions have become more flexible with packages where people have to put less down, but they still will have high monthly payments. What I’m seeing more often is other family members helping out, such as parents who had already paid off their home, refinancing to help with their children’s downpayment.”
   Gragg Miller, a broker at Coldwell Banker Miller-Arnason, is also concerned about the impact the rising prices are having on the community.
   “I’m concerned about my kids, who will be entering the market,” Miller said. “And I don’t see it changing soon, even if interest rates were to rise. People aren’t moving here because of interest rates. The real estate market will cool off here when people stop moving to Whatcom County.”

Where are they coming from?
   It doesn’t come as a surprise to many that people have been moving to the area. In numbers recently released by the Washington State office of Financial Management, Bellingham grew by 1,240 residents in just one year, to 72,320. Whatcom County’s population rose to 180,800 as of April 1, up from 127,780 in 1990.
   Based on interviews with real estate agents, homebuilders and home lenders, as well as a check of real estate sales in the past six months, the most popular out-of-town new resident is from the Seattle area. Outside the state, California tops the list, followed far behind by states in the Southwest and Midwest.
   “At least 50 or 60 percent of the people we see from out of state are from California, but we see nearly all states represented,” said Miller. “They don’t seem to be buying homes to turn them around for a profit, either. These are people who intend to stay here a while.”
   Among buyers outside Whatcom County, Californians have been the biggest buyer of high-end homes (more than $500,000) and residential land in the past eight months, closing 22 sales. That’s followed by buyers from Seattle (10 properties), British Columbia (four properties) and Texas (three properties). These numbers don’t include the sales to people who recently moved here and have Bellingham addresses.
   Mike Parcher, a real estate agent for Prudential Kelstrup Realtors, said the one commonality he’s seen with the people that have moved to Whatcom County in the past year is they all have some sort of contact here, whether it’s a family member or friend.
   “I think many of them came up here on vacation to visit the friend or relative, and discovered what a great place this is,” said Parcher, who was born and raised in Whatcom County. “There is always some sort of connection to this area for the people I’ve seen moving here.”
   Kent, who focuses his work in the Birch Bay and Blaine areas, said around 60 percent of the buyers he sees are from California. He said the majority of those newcomers have two reasons for coming from California: The quality of life is better here, and they think the California real estate market has peaked, so they are selling now.
   Another interesting trend is what is happening to local residents who have sold their homes; according to agents, many of the sellers are not leaving the area.
Peter Roberts, an agent for John L. Scott who focuses much of his work in the Columbia neighborhood, said most of the sellers he’s seen are moving into the county.
   “They are selling their home in town and buying acreage in the county, which is exactly something the County Council has been trying to prevent,” Roberts said. “I’ve even heard of one person who sold their house at a premium and is now in a rental while trying to figure out what to do next.”
   Kent said many of the sellers he’s worked with out in the county intend to move into Bellingham to be closer to medical facilities and other services.
   “The sellers I’ve seen are generally people who are getting older and don’t want to deal with something like a large yard; many of them are moving into condominiums,” Kent said. “I’ve also seen sellers who have to move because of job transfers, especially people who work at the border. What I don’t see is people selling their home and leaving the area because they are fed up and want to live somewhere else.”

What about a job?
   The one commonality among the people who have been moving to the area in the past six months is they tend to bring their job with them; among the few exceptions are those who are moving to the area because they accepted a job related to Homeland Security and the border, which has beefed up operations. Parcher said one client he recently helped find a home for is typical of the other clients he’s worked with in the past six months.
  “She is a regional manager for a company, and her only requirement for work is that she lives somewhere west of Montana, so she chose to move to Whatcom County,” Parcher said.
   Kent agreed people are moving here as a lifestyle choice, saying many of his clients are people who have a job that allows them to choose where they want to live.
   “All these people need is high speed Internet access,” Kent said.
Even those who have retired early have a tough time staying retired, Kent said.
   “I see many of those who retired 10 years early who jump right back in by starting their own business,” Kent said. “They retire, move up here, climb Mt. Baker a few times and visit the islands, then start thinking about what to do next.”
   The idea that people are moving to Whatcom County for its quality of life and not for job opportunities is a dramatic one. The area was dominated by resource manufacturing, such as fishing and logging.
   While there are still the oil refineries and the aluminum smelter in the county, the new manufacturers are typically small companies that focus on precision products, said Fred Wagner, an architect and partner at Grinstad & Wagner Architects. He’s noticed the change in his business; he designs many more warehouses than he did in the 1980s, when the manufacturing industry was much stronger in Whatcom County.
   “This kind of change is something we can’t have much control over, because it’s happening on a national level,” said Wagner. “Manufacturing jobs across the United States are moving overseas, and are being replaced by more service-oriented jobs.”
   There has been a wide variety of new, small companies opening in Bellingham, and this is reflected in the business license applications for the past six months.
Discounting the change of address/ownership applications, the most common new business startup is under miscellaneous retail stores, followed by restaurants, massage and other health-related businesses, business consultants, homebuilders, real estate offices and computer-related companies.
The vast majority of these new businesses have been small, with one or two employees, said Ken Oplinger, president of the Bellingham/Whatcom Chamber of Commerce.
   “Bellingham has always had a very strong core of small businesses that drive this economy, and we’re still seeing that today,” Oplinger said. “The vast majority of people that walk in here with questions are people just starting a small business.”

So what does this mean?
   The migration of people into Bellingham in recent years has not gone unnoticed. There have been spirited debates on growth from a variety of topics, whether it’s about Chuckanut Ridge, sprawl, urban villages or traffic.
   “Yes, it’s more congested, and there aren’t many signs it’s going to slow down, especially as national homebuilders begin entering the market,” Miller said. “More people are wondering where we are going as a community.”
   For Parcher, it does leave him torn. This rise in population has been a boon to the real estate industry, but it leaves him wondering what will happen next.
   “The growth has been great for business, but is secondary to quality of life for me,” Parcher said. “The past two years have been the biggest change Bellingham has seen in my lifetime, second to Bellis Fair being built. I’m still big on this area, though, and I’m optimistic the community can handle the changes and retain the things that make it so attractive.”



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