Face of home ownership is changing
By 2020, couples with children are expected to make up just one in five homebuyers, with more retirees, singles and singles with kids gaining ground, the president of a development firm said Thursday.
Jason Wheaton, president of Greenstone Homes, made his remarks as part of an affordable housing presentation at the 2007 Real Estate Market Forum, hosted by the Spokane-Kootenai Real Estate Research Committee.
Hundreds of real estate professionals showed up to hear the latest market trends affecting residential, office and retail properties.
Wheaton said developers need to provide more affordable housing options to cater to a changing homebuyer. The department of Housing and Urban Development defines affordable housing as costing 30 percent or less of a household’s income. For now, Spokane County’s ratio of median income to median priced home is a healthy 3.3, with income at $52,000 a year and median housing cost at $175,000, Wheaton said.
With an estimated third to half of the population increase coming from migration, he expects that outward pressure will continue to push residential real estate prices upward.
“Unfortunately the long-term outlook is that home prices will continue to outpace income increases,” Wheaton said.
Residential real estate remains hot, encompassing a total of $1.5 billion in sales in Spokane County for 2006, said Cate Moye, owner and broker of Windermere Valley Inc. and Windermere Liberty Lake Inc.
New arrivals were cited as driving a 36.7 percent increase in demand for high-end homes in 2006. High-end was defined as homes costing $500,000 and up, but located on less than one acre. Nearly 150 of those units were sold in 2006, boasting an average selling price of $636,303, she said.
Moye explained that a growing market of baby boomers is demanding more architectural options. They want downtown housing and a greater array of planned unit developments, waterfront homes and second home resort properties, she said.
Home seekers arrive from out of town, but come in well-informed after having researched properties via the Internet, Moye said.
Retail lease space is doing well in both Spokane and Coeur d’Alene, said Randy Jassman of Tomlinson Black Commercial.
He predicts that demand for retail will continue to increase as the area’s medical community grows and attracts more residents.
“That medical community is going to be more and more important down the road,” Jassman said.
The area is attracting national retailers willing and able to pay more, but those higher rents are pushing local businesses into other areas, which are being rehabilitated to accommodate them.
Spokane Valley has two large projects in the planning phases that will add another 350,000 square feet of retail space, Jassman said, adding, “That’s a lot of square footage in Spokane Valley.”
High construction costs and a shortage of developable land could boost rents for businesses and individuals in the future.
Glenn Crellin, director for Washington Center for Real Estate Research at Washington State University, said apartment rents could go up because of low vacancy rates in Spokane and Kootenai counties. Spokane County’s rate is about 4 percent and Kootenai’s dropped from 6 percent last year to 2 percent so far this year.
Mike Gentry, of Auble, Jolicoeur & Gentry, shared similar thoughts about industrial-warehouse space. With construction costs high and the supply of developable land low, some business owners are choosing to expand existing facilities.
Craig Soehren of Kiemle & Hagood Co. cautioned that a lack of prime office space could translate into higher rents. With more buildings needing remodels, he believes that office rents in Spokane County could increase significantly in the next 18 months.