Snow is blanketing the ground in most of Spokane County, but the housing market isn’t cooling off.
Realtors say 2019 will bring a repeat of the conditions that created a hot seller’s market over the past couple of years, with prospective buyers vying for a limited number of residential properties.
“The biggest thing is the low inventory,” said Gina Mosey, president of the Spokane Association of Realtors and a broker with Re/Max Inland Empire. “We’re affected by that more than rising interest rates.We just don’t have the homes to meet the demand.”
Inventories of homes for sale in Spokane County are tight for all price ranges, but especially for houses advertised for $300,000 or less, Mosey said.
According to the Spokane Association of Realtors, there’s a six-week supply of homes for sale in that price range. A balanced housing market – where neither buyers nor sellers have an upper hand – requires four to six months of inventory.
The Spokane-area housing market is in its eighth year of recovery since bottoming out in 2011 after the national housing bubble collapsed.
Fewer houses were built during the last recession and investors also bought up homes for rentals during that time. With wages rising, people want to buy homes again.
Steady population and job growth in the Spokane area also contribute to demand for residential real estate. Last year, Spokane County’s population passed the half-million mark, with an estimated 507,950 residents. Employers in the Spokane metro area created 6,200 new jobs.
Despite the increased housing demand, the inventory of single-family homes for sale has remained relatively flat, hovering around 10,000 properties per year, said Rob Higgins, executive officer for the Spokane Association of Realtors.
“That’s our headwind: inventory,” he said.
Prospective buyers can find themselves in bidding wars, and competition for homes is reflected in rising prices. Although the Spokane area remains an affordable place to buy a house compared to other West Coast cities, the median home price rose 12 percent last year to $235,000.
Unlike the Seattle area, where several years of skyrocketing housing prices appear to be tapering off, prices in the Spokane area continued to rise last year, Higgins said.
In the short-term, the Spokane area is unlikely to build its way out of higher housing costs.
The number of new homes being built has rebounded since the recession but leveled off, said Joel White, executive officer for the Spokane Homebuilders Association.
Construction Monitor, an industry source for building permits, says about 1,500 single-family permits were issued each year in Spokane County over the past three years. That’s a significant increase from the low of 664 permits issued in 2011.
But rising costs for land, labor and materials are restricting the number of new entry-level homes being built in Spokane County, White said.
“We know we have a workforce shortage,” he said. Add on higher prices for lots and construction materials, and “you can’t build a $150,000 single-family detatched home.”
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