Spokane’s real estate market continues to remain very active with low inventory, high demand and rising home prices. It’s a seller’s market, and that is likely to continue across the region this year, brokers and real estate agents say.
There were than 894 single-family properties listed on the market in Spokane in March, representing just less than a two month supply of homes, according to data from the Spokane Association of Realtors.
That amount is a more-than 12 percent decrease compared with last year’s inventory of 1,018 properties. However, the Spokane market – in its eighth year of recovery since bottoming out in 2011 after the Great Recession – has been following national trends of high demand for homes accompanies by low inventory.
Although Spokane is viewed as affordable when compared to Seattle and Portland, the median home price rose more than 11 percent over March 2018 to $245,800. Last year’s median price was $219,000.
Spokane ranked fourth out of 300 cities in a national Realtor.com survey of the hottest markets, trailing Midland, Texas; Chico, California; and Colorado Springs, Colorado. The survey, released in March, measures listing views per property and the average amount of time a home is on the market.
In Spokane’s booming real estate environment, it’s not uncommon for sellers to receive multiple offers on homes, especially in the $300,000-or-less price range.
“It depends on price range, but overall, it’s going to remain very competitive,” said Ken Sax, designated broker at Keller Williams Realty. “The higher you go in price, the fewer buyers there are, but if a home is clean and priced anywhere within reason, it’s gone.”
Sax said more homes are likely to appear on the market as weather improves in the region, but because demand is so high, it may not seem as though inventory has increased.
Prospective homebuyers are also facing competition from cash buyers, who typically aren’t required to complete an appraisal on the home, he said.
Sax advises potential buyers to be ready with an offer to increase their chances of securing a home.
“Establish you can buy the house before we write an offer on the house,” he said. “The goal is to look attractive to the seller by coming in already approved and showing we can buy the house.”
Sax said it’s also key for prospective homebuyers to work with an experienced broker to navigate the purchase process.
“It really takes experience to understand these dynamics and to use the experience and wisdom to benefit your buyer,” he said.
Rob Higgins, Spokane Association of Realtors executive director, anticipates Spokane will return to a balanced market, but it will take some time.
Higgins said the local market tends to mirror what occurs in the Seattle market, which is now experiencing an increase in inventory.
“I’ve never seen our inventory this low in 30 years,” he said, referencing Spokane. “But, there’s little doubt we’ll see the inventory increase if not this year, then next year.”
Joel White, Spokane Home Builders Association executive officer, said land, labor and lumber are three elements affecting new home construction in the region.
A large spike last year in the price of lumber drove up homebuilding costs, and lot prices have also gone up, he said.
“We can’t build what we traditionally build. It has to be attached homes or small homes on small lots,” he said. “We need to get the cost of lots down to a level where you can get more product on it.”
White said Lexington Homes is planning to build more than 200 homes this year and other homebuilders are constructing properties as fast as they can but are limited by Spokane’s labor market.
“We’ve leveled out on single-family homes and we’re in an interesting run where we haven’t seen much uptick in single-family, detached home construction,” he said. “Builders are working as hard as they can. We should be building a lot of homes because there is demand, but the question is how fast can we build the homes to meet the demand?”
Higgins said it’s a smart move for prospective buyers to purchase a home now because prices aren’t likely to drop.
“There was only one time prices dropped and that was in 2008,” he said. “There are times when it slows, but over the long term, prices in Spokane go up 3 to 5% a year. Right now, they are going up about 10 percent.”
Sax said owning a home is still the number one way to build wealth, and because the real estate market is cyclical, homebuyers will eventually have some relief from the competitive market.
“Buyers, your turn is coming next,” he said.
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.