Oversupply will hold down region’s prices, Realtors say

The large number of unsold homes in Spokane and Kootenai counties will keep the pressure on home prices this year, real estate industry officials said Thursday at an annual real estate market forum.

The inventory in Spokane County – 2,828 units in January – equals a seven- or eight-month supply, twice the preferred level, said Rob Higgins, president of the Spokane Association of Realtors.

January’s total, he added, exceeded those for January 2008 and 2007. Even after four consecutive months in which more homes were sold than in the same month a year earlier, January inventory was higher than the year-prior month for the first time in at least three years, he said.

Higgins said the 4,666 units sold in 2009 was the lowest total since the late 1980s. And the 8.2 percent decrease in median selling prices was the worst for any year going back to 1984, when the association started tracking the numbers, he said.

Higgins said prices could slip another 4 percent this year.

In Kootenai County, the 3,839 homes on the market represent a two-year supply, said Joel Elgee of Coldwell Banker Schneidmiller Realty.

Although average and median prices fell by double digits, the number of home sales increased slightly last year compared with 2008, he said.

He said most homes sold were priced less than $200,000. Owners of expensive waterfront property were negotiating discounts to listing prices of 10 percent or more, and close to 20 percent in a few cases, he said.

Low prices, interest rates and high inventories are creating a good buying opportunity, Elgee said, and there are other reasons to be hopeful.

He said the stabilizing of the housing market in California could clear the way for renewed in-migration from that state. And an 80 percent slump in lots platted in 2009 compared with 2005 should firm up prices when construction rebounds, he said.

Other speakers at the Spokane Convention Center said oversupply also troubles apartment building sales and commercial and retail building occupancy.

Some apartment owners are giving residential tenants a month’s rent to renew their leases, said Vicki Mundlin, a principal at Auble Jolicoeur & Gentry, a consulting and appraisal firm.

The vacancy rate in Spokane had climbed to 7.2 percent in September, she said. The rate in Kootenai County was 8.7 percent.