Spokane-area home prices down in 2008

Spokane home values dropped more than 12 percent last year, even greater than the national decline, according to estimates from a Seattle firm that often draws criticism from real estate agents.

It was the first time since the housing bubble burst that Spokane – and other cities in the Northwest, like Portland – showed a decline in estimated values that was greater than the national drop, said Katie Curnutte, spokeswoman for Zillow.com. That could be because the region had fewer foreclosures in the first year or so of the housing crisis, but broader economic problems are starting to have a bigger effect, she said.

“In the fourth quarter (of 2008) things seemed to be starting to change,” Curnutte said.

Zillow.com uses a wide range of public data and a “secret formula” to estimate the value of every home in a market, while the real estate community uses sale prices as the measure of the market.

The average sale price of a home in Spokane last year dropped by 2.6 percent, while the median price was unchanged, according to the Spokane Association of Realtors.

Rob Higgins, executive officer of the group, characterized the Zillow estimates – which the firm refers to as Zestimates – as “guesses,” and said figures for the Spokane market are out of line with his own statistics and experience.

“I’m not a real fan of the Zestimates,” he said. “Sometimes it’s right. Sometimes it’s wrong by a whole bunch.”

Zillow estimated that Spokane home values took a big tumble in the fourth quarter, falling by 8.2 percent. That brought the year’s total to 12.2 percent, ahead of the national estimate of 11.6 percent.

Curnutte said Zillow’s goal is to arrive at an estimated value for every home, whereas sales prices reflect just the homes that are purchased. If sales decline in a market – as they have in Spokane, by between 30 percent and 35 percent – that can skew the sales figures as a true measure of the market, she said.

Zillow’s report estimated that Spokane homes lost a total of $4 billion in value during 2008, with more than half of that during the fourth quarter.

More than 11 percent of homes were sold at a loss during 2008, and 17.3 percent of homeowners here were “under water” on their homes at the end of the year – owing more than the homes are worth.