Once at the top of the heap, Spokane’s hot real estate market has been dealt defeat at Waterloo, and seen its bubble burst by Champaign.
Those cities in Iowa and Illinois, respectively, blew past Spokane and other communities who once led the nation in housing appreciation, but have recently succumbed to higher interest rates.
High mortgage rates and a slowing economy dampened demand for existing homes during the January-March quarter and kept the value of American residences virtually unchanged from a year earlier, the National Association of Realtors said Wednesday.
Only one state - Rhode Island - reported an increase in sales compared to the first three months of 1994. Twenty-five states and the District of Columbia posted double-digit declines.
Spokane’s median home sale price for the quarter was $92,600, up a scant 2.1 percent from last year.
In recent years, Spokane had consistently ranked among the top 10 in market appreciation, scoring increases of up to 20 percent. The 2.1 percent increase in prices was the lowest since the late ‘80s. Sales also have slowed.
But market observers say a slowdown in sales and appreciation was inevitable - maybe even desirable - after a five-year housing boom. And Spokane has avoided the bust that hits many markets after a run-up in housing prices.
In fact, prices declined in many markets across the nation during the first quarter as sales slumped.
“Consumer uncertainty about interest rates definitely put a damper on activity,” explained Edmund G. Woods Jr., president of the real estate group.
The Federal Home Loan Mortgage Corp. has said 30-year, fixed-rate mortgages averaged 8.45 percent in the first quarter, down from 9.15 percent in the final three months of 1994 but still nearly 1 percentage point above a year earlier.
The median price of existing single-family homes was $107,700, up a barely perceptible 0.1 percent from the first three months of 1994, the survey said.
The survey of sales of single-family detached and attached homes in 133 metropolitan statistical areas found home values generally rose in smaller, less-expensive markets and slackened off in larger, costlier ones.
The median price from January through March ranged from $349,000 in Honolulu to $54,800 in the Saginaw area of Michigan.
Five cities posted double-digit gains, including the Waterloo area of Iowa, where the median price jumped 15 percent from a year earlier, to $55,300.