When Eric Swanson got the call from his real estate agent last summer, he didn’t waste time.
A new home priced under $200,000 had just come on the market in Spokane’s Shadle neighborhood. Swanson, an electrician, met his Realtor at the house after he got off work.
Before they left the premises, Swanson had made a full-price offer on the house, which was listed for $155,000. He closed on the sale a month later.
“We just got really lucky,” he said. “It was a nice house – under priced – and we were the first ones in there.”
The purchase was a happy ending to the 2017 home search that bordered on bizarre for Swanson. He wanted a bigger house, preferably in the Shadle neighborhood, so his son wouldn’t have to switch schools. But in last year’s superheated real estate market, Swanson had to rush out to look at properties as soon as they were listed and make snap decisions about whether to submit an offer.
Spokane County’s residential real estate market took home buyers on a wild ride last year. Prices were up; inventory was down. Prospective buyers sometimes found themselves in bidding wars for homes, which is unusual in Spokane.
Swanson looked at about 30 properties – and had two offers rejected – before he bought his house.
The tight inventory of local homes for sale mirrored national trends. Fewer homes were built during the last recession and investors also bought up homes for rentals during that time.
With job growth and rising wages, people were buying homes again. But new home construction hadn’t kept up with demand.
“It was a challenging, exciting year, trying to get buyers into houses and trying to get sellers to sell,” said Jennifer Valerien, owner/broker of Re/Max Inland Empire and a Spokane Association of Realtors board member.
In Kootenai County, home seekers experienced similar conditions.
For houses priced under $250,000, “it’s been an exceedingly competitive market,” said Tom Torgerson, president of the Coeur d’Alene Association of Realtors and an associated broker with Century 21 Beutler and Associates.
“The more traditional, entry-level home market is seeing some of the biggest run-ups in value,” he said. “It’s tougher for the first-time homebuyer to get into the market.”
In 2017, Spokane County reported the second-highest number of home sales in 30 years, Valerien said.
A total of 8,137 single-family homes and condos sold in Spokane County last year, according to the Spokane Association of Realtors. In 2005, at the peak of the housing market, 8,373 properties changed hands.
Spokane County’s median home price rose to $210,000 last year, a gain of nearly 8 percent compared with 2016. In Kootenai County, the median price was $248,930.
The local real estate market is in its sixth year of recovery. Sales bottomed out in 2011 as a result of the national housing crisis.
Despite the recent run-up in prices, Realtors said the current market doesn’t resemble the housing bubble of the mid-2000s, whose collapse triggered a national credit crisis and recession. Speculative buyers are a smaller part of the market, and the criteria for getting a home loan are much stricter, they said.
Based on tight inventories, local home seekers can expect the competitive market to persist into 2018, Valerien said, though she doesn’t expect Spokane County’s home prices to rise as sharply as they did last year.
“Part of the conversation Realtors are having with clients is explaining the market to them, preparing them, so they don’t get discouraged,” Valerien said.
First-time homebuyers, in particular, should start looking well in advance of their rental lease ending, Valerien said. They need to give themselves adequate time to find a house or arrange to extend their lease on a monthly basis while they’re home-shopping.
In addition, new loan requirements to prevent mortgage fraud have lengthened the closing time for most home sales, Valerien said. Thirty days used to be standard, but now 45 to 60 days is common, she said.
“It’s put a larger burden on lenders,” she said. “There’s more paperwork, more verifying, more checking, more rules and regulations.”
For Swanson, who bought the home in the Shadle neighborhood, persistence paid off. The 1950s house was sold as part of an estate. He bought it from the heirs of the original owners. The roof was new, and the interior had recently been remodeled.
“It was a nicer house than the ones I had been looking at,” Swanson said. “This one fit our needs better.”
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