Record low interest rates and lack of available homes on the market have pushed the median home price in Spokane County up to more than $300,000 for the first time in history.
“Those two combined are driving prices up,” said Rob Higgins, executive officer for the Spokane Association of Realtors. “We’ve never seen anything like this.”
Spokane County’s median home price at closing rose to $301,509 in July, compared with $270,000 in July 2019, according to the Spokane Association of Realtors. Sales mostly held steady in July with more than 844 single-family homes and condominiums on less than 1 acre sold last month, compared to 850 homes in July 2019.
Home sellers are receiving multiple offers, with buyers attempting to scoop up properties as soon as they are listed for sale – especially if they are priced appropriately, Higgins said.
“In the $250,000 to $350,000 range – boom, there are offers,” Higgins said.
Some buyers are paying more than the asking price for homes and that is common in a hot housing market, Higgins said.
As companies allow employees to work remotely during the coronavirus pandemic, it’s also accelerating the trend of people moving from larger metro areas like the Puget Sound to midsize cities, such as Spokane, where they can buy a larger home and enjoy a better quality of life, Higgins said.
Perry Domini, a broker with John L. Scott Real Estate, has also noticed an influx into the Spokane market of buyers from the Seattle area – some of whom are in the technology sector and able to work remotely .
Domini said a recent client’s mortgage payment for a $500,000 home in Spokane is equivalent to what they paid in monthly rent for an apartment in Seattle.
Another client sold their home in Shoreline for $700,000 and purchased a property on 15 acres in the area, he added.
“When you have a single person or family come over here and they make six figures, $300,000 is affordable,” he said, referring to teleworkers moving from larger metros.
About 80 to 90% of the Spokane region’s population growth in the past five years has been driven by people migrating from other areas, and it will be interesting to see if teleworkers continue that growth, said Grant Forsyth, chief economist for Avista Corp.
Typically, when a recession occurs, building permit activity slows. But, residential and commercial building permit activity in the county has been robust despite COVID-19, Forsyth said.
Spokane isn’t the only real estate market that’s facing rising home prices because of a lack of inventory, low interest rates and an increase in buyer demand.
It’s occurring across the length of the West Coast, said Gay Cororaton, director of housing and commercial research for the National Association of Realtors.
The median home price in the Western region was $432,600 in June, a 5.4% increase from the same time last year, Cororaton said, adding the West region is experiencing the fastest price growth nationwide.
The median home price nationwide in June was $295,300, a 3.5% increase from June 2019, according to the National Association of Realtors. July numbers are not yet available.
Nationally, housing inventory has decreased on a year-over-year basis since June 2019, Cororaton said.
Inventory in Spokane County remained low in July with 520 homes on the market, representing less than a month of supply. A healthy housing market typically contains a six-month supply.
Meanwhile, Freddie Mac reported the 30-year fixed rate mortgage rate plummeted to an all-time record low of 2.88% last week.
“We expect rates to stay low and continue to propel the purchase market forward. However, the main barrier to rising demand remains the lack of inventory, especially for entry-level homes,” Freddie Mac said in a report earlier this month .
Higgins, of the Spokane Association of Realtors, expects low interest rates and lack of inventory to continue for the foreseeable future unless more homes are built in the area.
If potential homebuyers are presented with an opportunity to purchase a property now, they should take it, he said.
“I don’t think this is going to be changing,” Higgins said, referring to the local market dynamics. “Do everything you can to figure out how to own that home.”
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