Rosalind Weller had to find another home, and quickly.
The landlord of the house Weller rented was putting the property on the market, making her a homebuyer for the first time in her life.
With a budget of $225,000, Weller set out to find a house on Spokane’s South Hill, but that didn’t work out as planned in the city’s hot real estate market. She looked at dozens of homes early last year, and every offer she made would land in a bidding war, with cash buyers sometimes offering upward of $20,000 above asking price.
“My experience has been pretty nuts,” she said. “The hard part was finding the home. For the house I got, it was the sixth offer we made.”
Weller closed on a home in the Shadle neighborhood after more than a month of competing with multiple offers and looking at several properties.
“Nobody had made an offer (on the home), and I believe the buyer was motivated to sell because he was trying to buy another home, which was contingent on the sale,” she said, adding that she “lucked out.”
Weller is one of many Spokane homebuyers who faced extreme competition last year for homes – particularly those priced $300,000 or less, a price range that has been experiencing the strongest amount of sales activity in the market.
Although potential homebuyers may still have to contend with multiple offers in 2020, it will likely be at a slower pace than previous years, said Ken Sax, designated broker at Keller Williams Realty.
“What was happening with multiple offers is buyers were getting discouraged. They were losing out on two, three or four homes and having to bid above asking price,” he said. “We may have multiple offers, but it won’t be as extreme as Seattle or any other major metro area. Their buyers are paying $100,000 over asking price, but our buyers are paying $15,000 over asking price.”
In a 2020 national housing market forecast, Realtor.com predicts buyers will continue to move to affordable, midsize markets, home prices will flatten out, inventory will remain tight and mortgage rates will rise, leading to falling sales. Properties in higher price ranges could remain on the market longer and require incentives to close deals, according to the report.
Sax said he’s seeing fewer sellers overpricing their homes compared with prior years, which will make it somewhat easier for buyers to purchase properties in 2020.
Still, Spokane’s real estate market – in its ninth year of recovery since bottoming out in 2011– remains extremely tight and active, with relatively few houses available, high demand and rising home prices mirroring national trends.
Those trends are expected to persist in 2020, Spokane-area real estate agents and brokers say.
“I see us staying in a seller’s market, and I see activity remaining brisk for buyers,” Sax said.
Spokane’s median home price rose to $260,000 in 2019, compared with $234,900 in 2018, according to the Spokane Association of Realtors. The national median home price in December was $274,500, according to the National Association of Realtors.
More than 7,900 single-family homes and condos sold in Spokane County last year, and in December, Spokane had less than a month of housing supply on the market. A healthy housing market typically contains a six-month supply.
“Spokane is growing. There’s more and more people looking into Spokane, and we’re seeing some job growth,” said Rob Higgins, executive officer for the Spokane Association of Realtors. “People are staying in their homes longer. That’s a national trend, and we haven’t had enough new-home construction to keep up with demand.”
The Spokane market also is experiencing an influx of investors and out-of-state cash buyers with more money to spend after selling their higher-priced properties in California, Seattle and other areas on the West Coast, observers say.
The metro area is becoming a mecca for housing affordability, having attracted the most interest from out-of-area homebuyers in the third quarter of 2019 of any of the 100 U.S. cities evaluated in a report by the website Realtor.com. The largest share of those potential buyers searching for homes in Spokane are from Seattle, Coeur d’Alene and Atlanta, according to the report.
Among the transplants are retired couple Beth and Larry Belcher, who recently sold their home in California and were drawn to Spokane’s affordability.
“It’s a lot less expensive than Southern California and it’s a beautiful area,” Beth Belcher said, adding they also have friends in the area and Larry was stationed at Fairchild Air Force Base many years ago. “I think it’s way less crazy and frenetic. People have been really nice, and the freeways are way less crowded.”
The couple have looked at a dozen homes since October but have yet to make a purchase.
“We are looking forward to being up here, and we are just hoping to find something,” Beth Belcher said.
Buyer demand is dependent upon price range, said Cody Irons, a Realtor with Coldwell Banker Tomlinson South.
Irons recently sold an 800-square-foot fixer-upper in West Central for 40% more than the asking price of $65,000. He received 14 cash offers on the home from investors and potential homebuyers.
“Luxury homes won’t be subject to multiple offers, but if the home is priced right, you’ll have multiple buyers,” he said. “Whenever you bring cash buyers into the equation, that puts gas on the fire and financed buyers have to compete.”
Weller advises potential homebuyers to ensure their credit is on point to obtain lower mortgage rates and to work with an experienced Realtor.
“If you don’t have a great real estate agent and broker, it makes it so much more difficult,” she said. “I also think you have to have an open mind, because with today’s market, unless you are really financially stable and you’ve got a ton of money, you might have to move somewhere you didn’t plan on.”
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