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Whatcom County Real Estate Market Remains Steady in 2026

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Whatcom County’s market for single family homes in the first quarter has remained very steady compared to 2025. Inventory is up by a welcome 7.2%, but the number of closed sales year to date is almost identical. Not surprisingly, as supply has increased slightly, the average number of days on market has increased from 52 to 62 days. However, the median sales price is almost the same as at this point last year, up a tiny 0.6% to $629,000. So far every indicator is pointing towards a repeat of last year.

The condo market is another story. The number of closed sales year to date is down by 22.5%, and the median sales price is down 8.5% to $375,000. Keep in mind that this is a much smaller sample size than compared to the number of houses, so these statistics are more prone to fluctuation. Certain areas and price ranges are doing better than others, but overall condo showings have been slow and many sellers are concerned.

So should you sell now, or wait until later in the year? If we really are on track to repeat last year, or even the last two years, then my advice is to sell as soon as possible. There are many ready and able buyers on the hunt right now, but no guarantee that will last. The second half of 2024 was very quiet as we went through the election process, and then many buyers held their collective breath after Trump was elected. After inauguration in January the market began to quickly heat up and had a strong start, but the market slowed as we got into summer, and then went really cold through the end of the year. Here we are starting off strong again in 2026, but there are so many uncertainties in the economy that things could change overnight. I strongly expect that the second half of this year will be slow again, this time as buyers wait for the results of the midterm elections. There’s a good chance that the market will once again spring to life in early 2027, but all bets are off if we have entered a recession or depression. Waiting too long to sell could be a grave mistake. Give me a call if you would like to discuss your particular situation. I’m always happy to help you cut through the fog and see if the timing is in your favor.

Whatcom County Real Estate Market Remained Steady in 2025

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Whatcom County’s real estate market remained very steady in 2025. As compared to the end of the year in 2024, residential sale prices (not including condominiums or manufactured homes in parks) decreased county-wide by 1.6% to a median sales price of $625,000, and Bellingham’s median price dropped by 1% to $755,000. Remarkably, Whatcom County overall saw exactly one more closed sale in 2025 (2432 sales) vs 2024 (2431 sales). That’s close! Median days on market were 18, up only slightly from 15 in 2024. The smaller areas showed larger price variations, but their smaller sample sizes make them more susceptible to statistical fluctuations. The results for our different areas are summarized below:

Area                              Median Price

Whatcom County          $625,000 (-1.6%)

Bellingham                    $755,000 (-1.0%)

Sudden Valley               $610,000 (+6.1%)

Ferndale                        $650,000 (+2.4%)

Blaine / Birch Bay         $579,925 (-6.2%)

Lynden                          $634,500 (-6.0%)

Those results are about as close to a repeat year as we ever see, and are indicative of a market that’s much more balanced between buyers and sellers as we have seen in quite a few years. Will 2026 continue the trend of level supply and demand? It’s impossible to predict accurately, but forecasts point towards a little more appreciation than last year. Mortgage rates are predicted to fall, which would definitely increase demand, pushing prices higher. Supply will likely remain stagnant, with homeowners who locked in previously at record low interest rates reluctant to sell unless they are compelled to leave the area. I doubt that we will see the huge price increases from a few years back, but we should see prices slowly climb.

So should you buy or sell this year? There’s no one easy answer for each person, and it’s important to remember that the overall market is actually made up of smaller markets defined by price and location. There are also monthly fluctuations that can be larger than the median yearly change. Demand has increased in the last few weeks, and I have seen quite a few homes that were on the market for a long time go under pending contracts. The inventory level is always lower in the winter, so for now we have a little bit of a seller’s market. That could change quickly as more houses come on the market in the spring, especially if we get some unwelcome national financial news. Give me a call if you would like to discuss your particular situation. I’m always happy to help you cut through the fog and see if the timing is in your favor.

August Market Review

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The market remains very similar to the results of the first quarter analysis I sent in my last newsletter. Looking at year to date closed residential sales, Whatcom County prices are down slightly from the same period in 2024, and the number of closed sales is slightly up. The changes in the different areas are more significant. Ferndale is up by the most in price increase and number of sales, while Lynden has taken the biggest hit. The results are summarized below:

Area                               Median Price              Closed Sales

Whatcom County          $629,000 (-1.7%)        1,403 (+1.7%)

Bellingham                    $755,000 (-3.2%)           452 (+3.2%)

Sudden Valley               $602,500 (+2.1%)            86 (-5.5%)

Ferndale                        $651,500 (+4.1%)         218 (+17.2%)

Blaine / Birch Bay         $584,259 (-2.6%)           205 (+1.5%)

Lynden                          $644,500 (-4.5%)            94 (-31.9%)

With overall supply and demand being so consistent, I don’t expect much of a change in the coming months unless something changes nationally. Mortgage interest rates have shown a slight decrease so far in 2025, but are still slightly higher than they were in August last year. Economic uncertainties are likely to remain. Many homeowners are still trapped in the “golden handcuffs” of the historically low interest rates they locked into a few years ago, and are unwilling to move and take on a higher rate.

One wild card is President Trump’s proposal last month to end capital gains taxes on home sales. Under current law, owners selling a primary residence face capital gains taxes once profits exceed $250,000 for single filers or $500,000 for married couples filing jointly. Those thresholds were not indexed for inflation and are the same as when they came into effect into 1997, so many more home sellers are subject to taxes given the huge increase in property values since the inception of that rule. Eliminating this tax could encourage a lot of sellers to make a move, dramatically increasing supply and creating a profound change in the market. It is unsure if or when this proposal will face the test of congress. Increasing the thresholds instead of eliminating the tax entirely may be the more likely outcome. Give me a call if you are wondering how this could impact you. I am always happy to chat.

2025 First Quarter Market Review

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Faced with uncertainties over tariffs, recession fears, high consumer prices, and stubborn interest rates, Whatcom County’s real estate market is starting to show some cracks. Comparing closed residential sales (not including condominiums or manufactured homes in parks) for the first four months of 2025 to the same period in 2024, the number of closed sales remained mostly steady, but the median sales price countywide fell by 3.1% to $625,000. Ferndale and Sudden Valley showed some improvement, but the usually strong Bellingham market showed the biggest decline. The results are summarized below:

Area                              Median Price              Closed Sales

Whatcom County          $625,000 (-3.1%)        444 (-0.2%)

Bellingham                    $730,000 (-6.4%)        135 (+5.4%)

Sudden Valley               $590,000 (+6.1%)         32 (+33.3%)

Ferndale                        $634,000 (+2.3%)        76 (+22.5%)

Blaine / Birch Bay         $639,500 (-0.6%)          60 (-15%)

Lynden                          $653,000 (-3.2%)          27 (-55%)

Keep in mind that it’s still early in the year and some of the sample sizes are too small to show dependable trends (especially in the number of sales), but it will be interesting to see how the market fairs over the coming months. Another area of uncertainty is the impeding water rights adjudication for homes served by wells, which I discussed in a previous newsletter. Comparing the same periods, homes on wells decreased by 3.8% to a median price of $760,000. The number of homes sold increased by 48% to 43. This is also a small sample so it’s too early to say for sure what impact the adjudication process will have on prices, but I will be sure to watch this and report as more information comes in. The adjudication documents were mailed out to homeowners mid-March, so this very lengthy legal process has officially begun.

2024 Year in Review

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Despite dual headwinds of stubborn mortgage rates and election uncertainty, the real estate market in Whatcom County remained strong in 2024. Residential sales (not including condominiums or manufactured homes in parks) increased county-wide by 7.6% to a median sales price of $635,000, and Bellingham’s median price jumped by 8.8% to $775,000. All areas saw an increase in sales price, while the number of closed sales remained very similar to 2023. The results are summarized below:

Area                               Median Price              Closed Sales          Days on Market

Whatcom County          $635,000 (+7.6%)        2,278 (+1.6%)          15 (+0.0%)

Bellingham                    $775,000 (+8.8%)           693 (+2.26%)          7 (-12.5%)

Sudden Valley               $573,000 (+1.6%)         135 (+2.3%)           10 (+11.1%)

Ferndale                        $637,450 (+6.3%)          344 (+3.3%)           16 (-5.9%)

Blaine / Birch Bay         $618,000 (+11.4%)         355 (+0.3%)           21 (+5.0%)

Lynden                          $685,000 (+6.8%)          200 (-2.0%)            21 (-4.5%)

Buyers who had been waiting for falling prices or rates were disappointed on both fronts, and will likely be faced with the same prospect in 2025. Demand continues to outpace supply, both in new houses being built, and from existing homeowners reluctant to sell and give up the record low rates they locked in a few years ago.

Mortgage rates are forecast to stay in the “new normal”. The Mortgage Bankers Association released their forecast for housing and mortgage rates at the end of the year. They see rates in the mid-6% range through 2026 (and possibly 2027). On a more positive note, they show home sales and new mortgage originations growing steadily during this period, indicating an influx of homebuyers who are unwilling to keep waiting on the sidelines for better news while prices continue to climb further out of reach.

Additionally, the Fannie Mae conforming loan limits have increased for 2025. The economists at Fannie Mae have approved an increase of 5.21% for Whatcom County, to a conforming (non-jumbo) loan limit of $806,500 for a single family residence. This is a positive sign for future home values, and an indication that we are not moving toward a declining market.

My advice to buyers is to get off the fence and get into the market. Everything always seems expensive when you buy, but when you look back ten years from now you will be glad you jumped in when you did. Don’t beat yourself up over prices or rates that got away. As is still the case, “The best time to plant a tree was 20 years ago. The second best time is now.”

What to know about likely interest rate cuts

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Will mortgage rates drop if the Fed cuts rates this week? Probably. It’s complicated. A rate cut in the federal funds rate is predicted for Wednesday at the end of a two-day meeting of the Fed’s Federal Open Market Committee (FOMC), the policymaking body of the Federal Reserve System. There are other events coming this week, including some important economic and earnings reports. Wall Street is anticipating a cut of 0.25% to 0.5%, which would be the first rate cut since March 2020. That was when the COVID-19 pandemic erupted and basically stopped all activity, and the Fed moved to be sure the U.S. economy didn’t completely seize up. The last time the Fed raised the rate was in July 2023.

The term “federal funds rate” refers to the target interest rate range set by the FOMC, and is a key tool for controlling inflation. This target is the rate at which commercial banks borrow and lend their excess reserves to each other overnight. Investors monitor the federal funds rate because it has an impact on the stock market. The rate is also important to the general public, as it can influence short-term rates on consumer loans and credit cards.

It remains to be seen how much a rate cut by the Fed will affect mortgage rates. It’s a common belief that a “rate cut” refers to all interest rates, but the Federal Reserve doesn’t set mortgage rates. Mortgage rates are determined by the bond market and the activity on Wall Street. The graph above is proof: Over the last two decades, the fed funds rate and the average 30-year fixed mortgage rate have differed by more than 5%, and by as little as 0.5%. If the fed funds rate were truly linked to U.S. mortgage rates, the difference between the two rates would be linear or logarithmic, not jagged. That said, the Fed does influence today’s mortgage rates. After its scheduled meetings, the FOMC issues a press release to the public which highlights the group’s economic opinions and consensus. For rate shoppers, one of the key messages to listen for is what the Fed says about inflation. Inflation is the enemy of mortgage bonds and, in general, when inflation pressures are growing, mortgage rates are rising. The link between inflation rates and mortgage rates is direct, as homeowners in the early-1980s experienced. High inflation at the time led to the highest mortgage rates ever. 30-year mortgage rates went for over 17% during this period. If the Fed believes that inflation is under control, then mortgage rates will drop.

It may take a while for the full effect of the Fed’s rate cut and comments to show up in mortgage rates, but rates have already been trending lower in anticipation of a cut. Mortgage rates have fallen more than half a percent over the last six weeks, their lowest level since February 2023 and down significantly from last year’s peak of 7.79%. Freddie Mac’s Primary Mortgage Market Survey showed an average U.S. weekly 30 year rate of 6.2% on 9/12, with some local lenders quoting rates in the high 5%’s.

There is a good chance that mortgage rates will continue to trend down. Waiting to buy may be the best strategy if you want to lock in the lowest rate. However, as I mentioned in my last newsletter, rate drops are a double-edged sword. While lower rates would give homebuyers more purchasing power, they could also lead to more intense competition for homes on the market, driving record-high home prices even higher. The supply of homes is not likely to increase with a modest rate drop. Many homeowners locked in rates around 3%. Rates under 6% might be promising news for buyers, but they won’t be low enough to tempt existing homeowners to move. “It’s one of those things where you should be careful what you wish for,” said Greg McBride, the chief financial analyst at Bankrate. “A further drop in mortgage rates could bring a surge of demand that makes it tougher to actually buy a house.”

So what should you do? My advice is to buy now, before the market get even more frenzied and prices start to climb. Buy what you can afford with a payment you can live with. If rates come down you can always refinance, but don’t put yourself in a corner where rates must come down for you to be comfortable. If you are going to be paying cash for your purchase there really is no reason to wait. Lower rates won’t benefit you, and would actually make your purchase more competitive and more expensive. Give me a call if you would like to discuss your particular situation.

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