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Spokane Housing Market: A 30,000 Foot Overview
From the January 2020 issue of @Home with Coldwell Banker Tomlinson. Written by Neil Johnson, resident CBT Statistics Expert.
The past year has been fraught with a number of issues that have affected the residential real estate market in many ways. The forces that have aligned this unusual year have basically created a housing shortage.
The Spokane and Coeur d'Alene area had been seeing high in-migration prior to 2020 and also low new housing production as evidenced by low rental vacancy rates and a low inventory of homes for sale. When the pandemic became official and businesses related to housing were closed, the supply of building materials and building itself were interrupted for a time. Simultaneously, people who had been relying on the office as a place to work found that they could work anywhere.
Since most large metro housing markets have remained healthy and strong, the option of selling from a large market and moving to a smaller market like ours has remained achievable. Now, mix in extremely low interest rates, more in-migration and fewer local residents moving away, and you get a high concentration of demand in the Spokane market.
Since the demand is high, the rising cost of building new housing has been offset by buyers who have no financial restrictions and can pay higher prices for new homes. As new homes are selling at record prices, those homes become benchmarks to all existing housing, encouraging home sellers to raise their asking prices, only to find that competing buyers bid those prices even higher. Incredibly, the high sales velocities are reflecting market acceptance, as homes are selling in numbers similar to 2006-07, which was the height of the housing market prior to the Great Recession.
Our region, with its affordability, access to recreation and excellent quality of life is very attractive to a great number of people, and as long as the larger markets remain stable, the cost of mortgages low, and the incentive strong for local residents to stay, we will see values rise.