Analyzing Annual Rise in Housing Costs in Bellingham, Washington |Excel|

Introduction:

Bellingham's housing costs have been increasing in recent years. The objective of this project is to examine factors that could be contributing to the increase in housing costs. This will include looking at past, current, and future trends in the housing market. The objectives will include examining multiple variables to determine if there are any correlations between these variables and the increase in housing unit prices. Factors such as vacancy rates, inventory, percentage of homes sold above listing value, and number of homes sold within a given time period will be examined. The goal of this analysis is to provide insights that help policymakers, investors, and individuals make more informed buying choices and address the challenges associated with the rising cost of housing.

Methodology:

The following steps were taken in analyzing housing costs:

1. Data collection: Data was provided and collected from Redfin, a national real estate brokerage. Other data to be collected may include looking through government websites to find data on population growth, inflation, and interests rates.
2. Data cleaning: Data cleaning included checking for consistent data types, removing any duplicate rows, filling in missing data, changing data types to ensure accurate calculations, using functions to create new columns to derive insights from. The data was fairly clean to begin with, so it was mostly a matter of creating new columns to help derive insights from the data.
3. Data Analysis: Excel was used to calculate the average annual housing costs along along with calculating the housing cost percentage increase each year. Pivot tables were used to calculate the sums and averages of variables that are potentially correlated with rising housing costs. A Forecasting Sheet was used to predict future trends in the housing market.
4. Data visualization: Bar graphs, line charts, and scatter plots were created to visualize the data. Charts were ordered in an organized fashion to enable easier interpretation of the data. Color choices were limited to avoid making the dashboard seem overly distracting and difficult to focus on getting the needed information. A more consistent color choice was used to enable readers to more easily spot patterns and trends more effectively. By providing more consistency with colors, viewers will be better able receive valuable insights. Another factor that was considered was to avoid using color combinations that might make it hard to interpret the results for those who are color blind.
5. Communicating the results: The fifth step could involve communicating the findings to potential homebuyers, investors, policymakers, or stakeholders. Findings are presented in a dashboard fashion. Other forms of communication could include written reports with images depicting the results, or presenting the results via audio or video in such a manner that would include more layman's terms so that the intended audience can better understand the results.
6. Reevaluate: Often times, the data analyst process can be iterative in nature. New data may come in, or new data from new sources may be included to yield further insights. The process will be open to interpretation and criticism as to determine if the data was properly collected, analyzed, and whether the results had correct interpretation. Feedback and also help to identify areas for improvement.

Findings:

This project examined housing prices from February of 2012 through February of 2023. As depicted in the graph below, housing prices in Bellingham, WA have increased over the years.

From a low of $239K in February of 2013 increasing up to a value of $694k in June of 2022, prices have steadily been increasing since 2012, with a sharper increase beginning around 2020. When examining the percentage rate increase there is generally an upward trend with all years seeing a percentage increase, with the exception of the current year which shows an actual decrease in housing prices. The biggest percentage increase is from 2020 to 2021 as visually depicted by the chart below.

I attempt to examine factors that could be contributing to the increase in housing costs. These factors included looking at the number of new listings, number of housing sales, inventory, number of days on the market, and housing sold at above the listing price. When comparing these variables to the annual housing costs percentage increase, the number of days on the market had a moderately strong negative correlation to the percentage increase housing costs; whereas, the percentage of houses sold above listing price had a strong correlation to the percentage increase in housing costs. These charts are depicted on the dashboard.

Although Bellingham housing costs are trending downward this year, when forecasting housing prices through 2028 the trend points upward with the projected median housing costs being greater than $820K by spring of 2028. With Bellingham experiencing population growth and pricing around the Seattle area becoming more expensive, it is possible that people people who have the ability to work remotely may be trying to find cheaper housing. As the demand for housing goes up and with limited inventory, this could potentially be a factor in driving housing prices upward.

Future research:

This project's goal was to examine housing price trends in Bellingham, WA. The goal was to evaluate factors that could be driving the cost of housing upward. Future research will look at seeing how population growth may have contributed to housing costs increase along with interests rates, and possibly looking at migration patterns.

Conclusion:

By examining the trends in housing prices, insights derived from the data can be used to yield valuable information for those looking to invest in the area. Examining the factors that could be contributing to increasing housing costs will enable policymakers, stakeholders, and other individuals make more informed choices and potentially come up with a strategy that can contribute to a more affordable and equitable housing market which more individuals can benefit from.