Bellingham, Washington The Bellingham metropolitan area economy has slowed during the past 12 months. Nonagricultural wage and salary employment declined by 1 percent (700 jobs) during the 12 months ending in September 2002 compared with a 0.05-percent gain for the same period in 2001. During the past 12 months job gains in construction, services, trade, and State government were not enough to offset losses in manufacturing and mining. The unemployment rate averaged 7.3 percent for the 12-month period ending in September 2002 compared with 7 percent during the 12 months ending in September 2001. Over the past 30 years employment growth has been strong, averaging 6 percent annually. During the 1990s nonagricultural employment growth averaged 2.6 percent per year. Despite strong employment growth, the Bellingham area has struggled as higher paying manufacturing jobs were replaced by lower paying, service-industry jobs. Service-industry employment had average wages of $22,000 in 2000, just 60 percent of the manufacturing sector’s average of $37,000. Georgia-Pacific closed its Bellingham pulp mill last year, resulting in the loss of 420 jobs that paid an average of $52,000 per year. However, the long-term economic outlook remains positive because of increased diversification and the stabilizing force of Western Washington University, a State-funded institution with an estimated 570 faculty members and 12,490 students as of fall 2002. Population growth during the past 2 years has averaged 1.6 percent per year with the population as of April 1, 2002, estimated at 172,200. More than two-thirds of the population growth in the past 2 years has been the result of net in-migration. Rising enrollment at Western Washington University (up 200 students during the period) and the area’s attractiveness to retirees are major factors in the in-migration. The sales market continues to remain healthy. Sales closed through the Bellingham MLS rose 8.6 percent in 2001 compared with 2000. Year-to-date sales through September 2002 were up an estimated 2 percent over the first 9 months of 2001. The median sales price rose 4 percent during 2001 to $152,600. As of September 2002, the year-to-date average sales price was estimated to be $170,000, up 3 percent compared with the same period in 2001. Condominium sales were robust, up 10 percent compared with the first 9 months of 2001, with an average sales price of approximately $115,000. Because of the healthy sales market, single-family building permits rose 3.3 percent compared to the first 9 months of 2001 and totaled 848 homes during the first 9 months of 2002. The city of Bellingham has partnered with a local nonprofit land trust to increase homeownership. Through the use of HUD HOME funds, the city provides downpayment assistance to qualified first-time buyers earning at or below 80 percent of the area’s median income. This brings the purchase price to a level affordable on their income. Buyers pay the price of the home only and lease the land from the trust. Because of rising sales prices and continued population growth, demand for rental units in the Bellingham metropolitan area has grown. According to the Census Bureau, rental households represented 37 percent of all occupied households in 2000, up from 35 percent in 1990. The supply of new rental units has not kept pace with the demand, causing rental market conditions in the Bellingham metropolitan area to remain tight. The estimated rental vacancy rate was 2.6 percent as of September 2002, according to the Fall 2002 Dupre+Scott Apartment Vacancy Report . Market conditions have tightened compared with fall 2001 when the vacancy rate was 3.2 percent. According to the report, the average overall rent in fall 2002 was $654, up 4.7 percent over the previous fall. Of the properties surveyed, 17 percent were offering rental concessions compared with a 5-year average of 20 percent of surveyed properties offering rental discounts. Developers have recently shown a renewed interest in downtown Bellingham, with two mixed-use rental/retail projects under construction. Downtown Bellingham still has a considerable amount of vacant property, including a 4.5-acre parcel likely to be developed into market-rate multifamily rental and owner units as well as retail and commercial space. Several notable downtown buildings remain vacant with the potential for development, including the former JC Penney, Woolworth, and Puget Power buildings. Multifamily permits averaged 520 units annually during the period from 1999 to 2001. During the first 9 months of 2002, 280 multifamily units were issued permits, down 24 percent compared to the 370 units issued permits from January to September 2001.

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