Spokane’s real estate market bucked a national trend in declining real estate prices and flattening appreciation.
Spokane ranked third among metropolitan areas throughout the nation for appreciation of median-priced homes in 2006, according to statistics provided by the National Association of Realtors.
Local home prices rose from $156,400 in 2005 to $184,100 in 2006 — a 17.7 percent increase. The only markets with higher appreciation were the combined Virginia Beach-Norfolk-Newport News, Va.-N.C. market at 19.4 percent, and Salem, Ore. at 19.8 percent.
“We’ve certainly been in the top 10, but I didn’t know we were that high,” said Rob Higgins of Spokane Association of Realtors.
Higgins said Spokane has been in the top 10 markets for home appreciation in the past couple years.
Spokane’s increases are coming at a time when home sales were down from a year ago in many markets. The NAR study showed that Spokane’s median home price is still lower than the national average of $219,300, which declined 2.7 percent from a year earlier.
Home prices in much of the Northwest have been climbing in part because of growth management, Higgins said. Growth management charges cities with making plans that create growth areas and cut down on sprawl.
During a presentation at Coldwell Banker Northwest Group’s South Hill office on Wednesday, broker Neil Johnson addressed possible causes of the price increases.
“We have a lot of upward capacity for sales to go up right now,” Johnson told the group of real estate professionals.
The region has a net increase of people moving here and most of the current residents are staying, he said. Because there are limitations on where developers can build, small, independent builders are having a hard time purchasing lots to build, he said.
“There are no 20-acre parcels anymore. They’ve all been developed,” Johnson said.
Several developers who hold the key to huge chunks of land within urban growth areas aren’t freeing up land to other builders. Landowners may be keeping the acreage off the market in hopes of getting a higher return, Johnson said.
He expects that local residential real estate will continue to be hot as more of the wealth from prosperous cities, like Calgary, Alberta, finds its way into the region. The combined package is creating a shortage of accessible land that’s limiting supply and driving prices up.
Another draw is that the region recently created more than 10,200 jobs in a year and housing prices are still relatively affordable when compared with median incomes, Johnson said.
Higgins said that Spokane is being discovered and real estate appreciation reflects overall health.
“I think it’s a good sign for our local economy.”