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NOW is the Time to Invest in Spokane

By
Real Estate Agent with Exit Real Estate

The Spokane residential real estate market continues to buck the national trend of declining values. Several factors are combining in the Spokane region, including positive in-migration, dwindling inventory in new construction, rising rental rates, and lack of supply of buildable land. The following statistics back up these facts:

  • Forbes ranked Spokane 9th in the nation for housing appreciation, with a year-to-date increase in prices through June 2007 of 10.4%.
  • Spokane is still a bargain. The median home price is $197,700 - less than a quarter of those in San Francisco and a third of those in Los Angeles.
  • Apartment vacancy rates are extremely low, at approximately 4.2% in Spokane County.  The last time we had a vacancy rate this low was during the housing boom of the early 90's.
  • 40% fewer residential building permits have been drawn year-to-date 2007 as compared to 2005.
  • The current mortgage foreclosure rate in Washington is less than 1%.  It is currently lower than it was 10 years ago.  As of mid-June, sub-prime, adjustable rate loans represented 20% of loans nationally, but just 6% of home loans in the state of Washington.
  • Positive job growth put Spokane #1 in the state per capita in 2006.  The unemployment rate in Spokane County for the second and third quarter of 2007 was the lowest consecutive two quarters since the third and fourth quarters of 1999.
  • Retail sales tax collection is up 15% over 2006 year-to-date.
  • Revitalization of Spokane's downtown district continues, spurred by the creation of RiverPark Square Mall and the renovation of the historic Davenport Hotel. More condominiums are being built, and the Kendall Yards urban development is now underway. It is estimated to have a total economic impact of nearly $3 billion.

Real Estate prices are a factor of supply and demand. In the second and third quarters of 2007, the inventory of listed properties in Spokane increased significantly, creating a large selection for buyers and more competition for sellers.  At the same time, the media cranked out stories about the sub-prime mortgage crisis, housing bubbles and all kinds of negativity, scaring buyers to the sidelines. Residential sales in Spokane reached a low point in September '07 with 521 units closed. October bounced back with 593 sales. With roughly 3,000 properties on the market, I believe there is a temporary window of opportunity for buyers and investors to pick up Spokane properties at below market prices. But with all the strong economic factors we have going for us locally - I don't think this opportunity will last for long. More people continue to relocate to Spokane, jobs are being created, rents are going up, retail is strong, and home prices are forecasted to continue to trend higher.

If you are thinking of investing in Spokane, now is the time!

*Statistics provided by WSU Center for Real Estate Research, National Association of Realtors, Washington Association of Realtors, US Dept of Labor, Construction Monitor,  The Spokesman-Review, and the  Journal of Business

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Anonymous
Aaron Mallo

Darla,

Thanks for the post, this gives a very nice framework for understanding what drives our market.  I've also posted some more updated statistics for Spokane real estate here.

Thanks, Aaron.

May 29, 2008 03:25 PM
#1