Housing Market’s 5-Year Rip Shows Signs Of Exhaustion

Retail sales in metropolitan Spokane have doubled in the past 10 years, says retail real estate expert Dave Black.

The giant national chains have fallen in “love” with this market.

“And every grocery store in Spokane,” says the president of James S. Black & Co., “is looking to expand.”

Next door in North Idaho, Kootenai County has added a million square feet of retailing (comparable to NorthTown) in the past few years, reports Chris Gibbs. And space is so tight, says the retail specialist, a partner in the commercial real estate firm of Acuff Northwest, that merchants are standing in line for an opening.

“Build it,” he says, “and they will come.”

On the other hand, observes broker John Beutler, there’s no shortage of residential properties in Kootenai County.

The owner of John Beutler & Associates in Coeur d’Alene says there are 500 new homes left over from last year’s building boom.

And the outlook is for construction activity and home sales to plunge by one-fourth from last year’s levels.

“But,” he points out, “75 percent of a record year is a damned good market.”

Also on the plus side, the drop in building will ease concern about growth and the environment.

And, finally, rents are leveling in North Idaho.

These are a few highlights from a dozen presentations at the eighth annual Real Estate Market Forum in Spokane. In recent years this seminar has packed more economic, demographic, and marketing punch into a few hours than any other program.

Truly, the Spokane-Kootenai Real Estate Research Committee is to be commended for its efforts in sponsoring and organizing this extremely valuable business-community resource.

The depth of research and detail can be extraordinary. Take a cost/revenue analysis of the apartment rental industry in Spokane by the owner of Alvin J. Wolff Inc.

Alvin J. “Fritz” Wolff Jr. priced out one-bedroom apartments, two-bedroom apartments, three-bedroom apartments, etc., etc., by the square foot. Priceless data for developers and multi-family real estate investors.

For the rest of us, what it all comes down to is rents have pretty much leveled off since 1993.

Real estate marketing consultant Jan Ekstrom of Janek Co. covered the Spokane single-family market, a national leader the past several years. While it’s pace has slowed, she said, “The market is not going away.”

In the close-in metropolitan area (Valley, north and south sides of town) unit sales fell 15 percent last year, she reported.

The median sales price (at which half of sales are above that number, and half are below it) climbed a very hefty 10.5 percent or roughly $10,000 to $94,500.

The average sales price rose 7.5 percent, or a little over $9,000, to $122,641.

For the past three years, said the residential consultant, average price appreciation has slowed from 16.9 percent in 1992, to 10.3 percent in 1993, and, as noted in the previous paragraph, to 7.5 percent last year.

“I think we will see a steady pace of the market in 1995,” Ekstrom said. Sales will probably end up 8 to 10 percent behind 1994. A banner year by any measure.

Good news for new-home buyers. Contractor prices for newly built homes are coming down. “I think we will see a leveling out of prices,” said Ekstrom.

In the Spokane office market, Jeff K. Johnson says, Class-A space is growing tight. The owner of Jeff K. Johnson Co. cited these key factors:

A major transition in use has taken place in the core, where half a dozen very large office employers moved into big blocks of redeveloped, vacated, retail space.

Growing local companies are expanding into larger quarters.

More large national corporations are looking to relocate to “small town U.S.A.”

Monday’s column, which reported assurances from Burlington Coat that the upscale discounter will remain downtown, contained a mistake that warrants correction and a word or two of clarification.

Realtor Dave Black did not say Burlington Coat might move across Post into the empty old Crescent Store addition, as I indicated. That was my error.

However, his comments on other likely relocation sites in the immediate vicinity for Burlington Coat, should a move be necessary, were accurate.

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