The coronavirus pandemic is accelerating a growing trend of out-of-area buyers and remote workers moving to Spokane in search of a better quality of life and affordable housing, real estate experts said at the Association of Washington Business Housing Forum Virtual Series earlier this week.
Part of the housing demand is coming from retirees, who are downsizing from homes in larger metro areas, taking the equity and purchasing properties in midsize markets like Spokane, said James Young, director at University of Washington’s Runstad Center for Real Estate Research.
Remote workers – some of whom are first-time homebuyers – are also realizing they can leave Seattle and buy larger homes in Yakima or Spokane where they can save money, Young said.
“You’ve got the trend of older people moving and trading down, which was happening. Then, you’ve got the same trend of people moving to the rural areas because it’s more affordable,” he said during the virtual presentation Tuesday. “So those two things are combining to create kind of a perfect storm.”
More than two years ago, Spokane was considered affordable for first-time homebuyers. Now, a home would need to be priced about $181,000 to be considered affordable for a first-time homebuyer, according to a housing affordability index from UW’s Runstad Center for Real Estate Research.
Affordability fell by more than 7% year-over-year in Spokane partly because of high housing demand, Young said.
Spokane County’s median housing price in September was $313,500, according to the Spokane Association of Realtors.
Although homebuying slowed in mid-March in the state as the stay-at-home order went into effect, market activity picked back up in May, said Alexandra Lee, a Zillow Group economist.
“What’s been clear throughout that revival is that buyers are returning faster than sellers,” Lee said. “A lot of people are trying to make that jump from renting to owning, in addition to those trading up to a home that’s more suitable for working from home or those downsizing to save costs.”
According to Zillow research, sale-pending home listings over the past five months have grown faster than new listings in the state, meaning buyers are putting offers on homes faster than sellers are putting properties on the market, Lee said.
“That’s creating homebuying conditions that are as competitive as ever,” Lee said. “So despite the pandemic, despite the economic slowdown, the job loss that so many people are seeing, the housing market right now is hot.”
Smaller metro areas, such as Spokane, are experiencing strong home-value growth, Lee said. Spokane in September had a 12.9% year-over-year increase in home value, according to Zillow.
Lee said it has become clear that more housing needs to be built to meet growing demand and that includes allowing a variety of housing types, including duplexes, in single-family areas to create more supply.
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