Spokane Ranked Nation’s Hottest Housing Market But Magazine Survey Overlooks Cooling Trend That Began Last Year
News of Spokane’s housing boom finally caught the attention of U.S. News & World Report, which ranked Spokane the No. 1 housing market in its sixth annual home guide.
But local housing industry officials say the recognition is belated, and the housing market - which was the hottest in the nation a couple years ago - has actually leveled off.
“It’s something we already knew, but it’s nice to get national recognition,” said Don Walker, communications director of the Spokane Association of Realtors.
Spokane topped the weekly magazine’s list of the hottest housing markets in 145 American cities. With an average annual price growth of 12.6 percent from 1991 to 1995, Spokane beat No. 2 Salt Lake City and No. 3 Madison, Wis.
Cities in Northwest and Mountain states, including Boise and Eugene, Ore., comprised six of the top 10. California ranked lowest.
According to the report, which reaches newsstands Monday, Spokane “is emblematic of the newly thriving smaller city rapidly attracting firms in search of lower costs.”
Not quite, local experts say.
The housing market here actually slowed down in 1994 after five years of rapid price increases. Sales were 10 percent below 1993, and emerging statistics make 1995 look even slower.
“The market here has pretty much leveled off, which is normal,” Walker said.
Still, U.S. News’ survey can’t hurt Spokane. The national weekly has a readership of 12 million and is available online through CompuServe.
“It may lure other people here because they’ll say, ‘Hey, this place has been near the top for a few years,”’ Walker said.
U.S. News attributes Spokane’s price growth to a labor force that has swelled by 17.4 percent in the past seven years. The magazine also reported an annual increase of 186 percent in the number of housing permits granted since 1988.
That’s good news, but Walker said the report does not mention what separates Spokane from other cities on top: Spokane has been immune to vicious boom-and-bust cycles typical to Western cities such as Denver and Los Angeles.
“This is actually a fairly conservative, stable city. Prices aren’t going to go up and it’s not that pricey,” Walker said. “It’s just a good value.”
To identify the cities where home prices rise fastest, U.S. News asked a Pennsylvania-based consulting firm to analyze data for metro areas with populations exceeding 300,000.
The big loser was California, which had seven out of 10 cities with the lowest price growth. Los Angeles, which came in dead last out of the nation’s 52 largest cities, saw home prices decrease 4 percent since 1991.
Orange County, Sacramento, San Jose, Riverside, San Diego and San Francisco also had negative growth since 1991, according to the report.
Although the study has clout, Walker warned about letting Spokane’s top slot go to the city’s head.
“Who knows. It’s just another survey. In the end, you pick the spot you like to live in.”
xxxx BEST HOUSING MARKETS According to U.S. News & World Report’s annual home guide, the following cities were the nation’s best housing markets based on annual average price growth from 1991 to 1995: 1. Spokane, 12.6 percent. 2. Salt Lake City, 10.6 percent. 3. Madison, Wis., 9.8 percent. 4. Denver, 9.5 percent. 5. Biloxi/Glufport, Miss., 9.1 percent. 6. Peoria, Ill., 8.9 percent. 7. Boise, 8.6 percent. 8. Eugene, Ore., 8.5 percent. 9. Salem, Ore., 8.3 percent. 10. Albuquerque, N.M., 8.1 percent.