Spokane County’s median home price showed little signs of slowing in May as it reached another all-time high – $375,000.
The median closing price last month was 29.5% greater than the $289,900 median in May 2020, according to the Spokane Association of Realtors.
Real estate agents say the upward surge of area home prices likely will continue as long as interest rates remain low and buyer demand continues to outpace housing supply.
“I personally think it’s going to be tied to interest rates and what happens over the next six months,” said Rob Higgins, executive officer for the Spokane Association of Realtors. “If demand keeps up, we will see those prices keep moving upward.”
The Spokane area isn’t the only place home prices are climbing. It’s a nationwide trend, Higgins said.
“I would have never predicted these sort of prices in Spokane,” Higgins said. “But, if you look at national figures for 150 different (metropolitan statistical areas), we aren’t an outlier with percentage increases in prices.”
The median existing home price nationwide for all housing types in April was $341,600, up 19.1% from $286,800 in April 2020, with every region recording price increases. It’s a record high and marks 110 straight months of year-over-year gains, according to the National Association of Realtors. May data is not available.
Spokane County had 224 homes available on the market last month, representing a 10-day supply. That means it would take 10 days to sell all available properties in the county. By comparison, the county had an inventory of 631 homes – a 1.3-month supply – for sale in May 2020.
Some 686 single-family homes and condos on less than 1 acre sold in May, compared to 501 in May 2020.
That number reflects sales that went under contract in April. The increase in sales this year is likely because more sellers are listing homes amid fewer coronavirus restrictions, Higgins said.
Spokane Valley is experiencing the most homebuyer demand with 172 year-to-date closed home sales, followed by northwest Spokane with 179 closed sales and the South Hill with 157, said Eric Johnson, president of the Spokane Association of Realtors.
It’s still feasible for buyers to enter the Spokane market, especially if they have equity from a home sale to put toward a new property, Johnson said.
A two-person household each making $60,000 could afford a $400,000 home with a 30-year fixed mortgage, he said. The industry typically advises that buyers’ monthly mortgage should not exceed 30% of their gross income.
It could be a challenge for buyers making less.
“For people that are low-income, it’s becoming a burden – there’s no doubt about it,” Johnson said. “Because the only way to get around it is to supply the market with (housing) units.”
Last month was one of the best on record for homes going under contract in Spokane, according to a May report by John L. Scott Real Estate.
“The total number of listings counted in May came in lower than we would normally see due to the month starting on a Saturday and ending with a holiday weekend,” the report said. “The next three months will be critical for homebuyers as we see an elevated level of new resale listings before the fall market.”
A bright spot in Spokane’s fast-moving real estate market is a recent influx of new listings, said Tim Olsen, broker with John L. Scott.
“We are seeing more inventory hit the market as we begin June,” he said.
It’s typical for buyers to compete against as many as a dozen offers for homes priced below $350,000. That number dwindled to about four to five offers around Memorial Day weekend, as more people took to the roads for camping excursions and outdoor activities, Olsen said.
“It’s kind of one of those deals where the market is adjusting to the post-COVID environment, and part of the slowdown we’ve seen the last few weeks is people are wanting to go out have fun as (COVID) restrictions are lifted,” he said.
Olsen acknowledged it’s a difficult and frustrating real estate market but advised buyers to be open to understanding market dynamics and be flexible in their approach to buying a property.
“For first-time homebuyers, I try to encourage them all the time to work with a lender right away to make sure they have their ducks in a row,” he said. “Let’s face it – stress is caused when you don’t know what’s going to happen.
“If you are well-prepared, then it won’t be nearly as stressful to stay in the game and try to find a home in the longer term.”
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