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Home sales in lull; appreciation slows

Spokane homebuilder Corey Condron usually has two or three completed houses for sale at a time. Currently, his company has 15 homes on the market.

“There’s a lot of competition right now with the builders. We’re playing tug-of-war with each other,” said Condron, owner of Condron Homes LLC.

To help move inventory, the company recently offered incentives that included flat-screen televisions with surround sound, appliance packages or free air conditioning.

Spokane County’s housing market is becoming more hospitable to some buyers. As of May, there were about 2,750 houses on the market – a 40 percent increase over the same period last year.

Although there were 785 more houses to choose from last month, real estate prices still inched upward. Experts estimate that home prices will appreciate 2 percent to 6 percent this year – down from average appreciation of 14 percent in 2006 – and that home buyers will have more choices at some prices.

Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said that when inventory increases significantly, buyers can get more home for their money. When that happens, people are encouraged to spend more money.

Condron Homes is making deals on existing houses so the company can fund new projects and provide employment for subcontractors, Condron said. Other builders may also negotiate, he said, if their homes stay on the market too long.

“If a builder is getting upside down on a home or two they are typically willing to take a loss to stop the bleeding.”

Even though year-to-date sales of new homes are down by 74 houses compared with the same period last year, the Spokane County real estate market remains competitive, said Bruce Hardie, owner of two area Keller Williams Realty brokerages.

“A good house that’s well-priced is still going to be a hot commodity,” Hardie said.

Josh and Jihye Johnson put their search for a new home on hold last year after being disappointed at the selection in their price range, which was a bit more than $150,000.

After dropping out of the market for nearly a year, and welcoming a new son named Daniel, they resumed the hunt in May and found a 2,200-square-foot rancher on the South Hill for under $200,000.

The Johnsons’ income had increased during the past year so the couple qualified for a bigger mortgage. Because there was competition for the house, they offered $2,500 above the asking price, which sealed the deal.

“We were kind of lucky because there were three offers on it the first weekend,” Josh Johnson said.

Although the bulk of home sales in Spokane County happen in the $150,000-to-$300,000 price range, those transactions to date were up only slightly over the same time last year, according to statistics provided by the Spokane Association of Realtors Multiple Listing Service.

On the flip side, sales of houses costing more than $300,000 grew faster than any other segment of the market. Through mid-June of this year, 99 additional homes sold in the $300,000-to-$500,000 price range. Thirty-one more homes sold for a half-million dollars and above, records show.

Spokane County’s high-end scenario is opposite of Kootenai County’s, where sales of homes above $300,000 have declined.

Crellin said Spokane County still has one of the most affordable home markets in the state and country. Californians continue to fuel some of the demand for higher-priced homes.

State records show that thousands of California driver’s licenses have been turned in over the past couple of years, said Crellin, adding, “That’s 4,600 people coming from one of the most expensive states in the country.”

Hardie, of Keller Williams, said three years ago there were 30 or 40 homes priced over $500,000 on the market. Now there are nearly 500 of those high-end homes for sale.

Sales are declining in the lower prices because there’s a shortage of less expensive homes, he said, adding that local wages and salaries aren’t keeping pace with real estate appreciation.

As Spokane County’s entry-level homes get more expensive, some local builders are exploring ways to keep prices down.

Greenstone Homes & Neighborhoods has built 30 townhouses, starting at $175,000, in River District, a Liberty Lake development. The townhouses are constructed three to a building and share green space. Twenty units have sold since January, said Rob Brickett, of Coldwell-Banker Schneidmiller Realty. River District is being developed by Greenstone on land owned by Centennial Properties, a unit of Cowles Co., which also owns The Spokesman-Review.

Adam Sitton, 26, recently purchased a townhouse for himself and his fiancée, Andrea Richardson. Because the townhouses use less land than traditional homes, they are more affordable.

Sitton said he looked for about a year and was disappointed at homes in his $180,000 budget.

The nearly 1,400-square-foot townhouse has an attached garage and includes amenities that Sitton said were lacking in other properties he viewed.

“It’s really untouchable for that kind of price range.”