Home sales on the rise in Spokane
Reversal of fortune after six years of a weak housing market suggests the economy may creep upward again
Adrianne and Jason Campbell just finished buying their first home: a modest, charming three-bedroom house in the South Perry district.
The stars aligned for the young couple, who moved to Spokane six years ago and had their first child four months ago.
Interest rates are near record lows. The Campbells cleared up both of their credit histories. Adrianne is taking nursing education classes at Eastern Washington University, and Jason holds a full-time job as an attorney in downtown Spokane. Since moving to Spokane in 2006, the 30-something Campbells have been renting, waiting for the chance to get the right home for the right price.
Their agent, Marianne Guenther Bornhoft of Windermere Manito, told them they’d be crazy not to buy right now.
Said Adrianne Campbell, “We’re very excited about buying (this house) because it’s been a long time coming.”
Real estate agents, likewise, think an upswing in the housing market has been a long time coming.
Before last year, Spokane’s residential real estate market went through six years of declining home sales. The market’s recent high point was 2005, when 8,373 homes were sold in Spokane.
The housing bubble burst in late 2007, and home sales have slipped every year since, until last year, said Rob Higgins, of the Spokane Association of Realtors.
Bornhoft, the current president of the Spokane Association of Realtors, said she personally had a decent year in 2012. She and most other real estate agents hope the momentum from 2012 will help them catch up on lost ground during 2013.
Vic Plese, owner of Plese Realtors, estimates he might double the sales he had in 2012, but only if the area economy continues gaining steam and interest rates remain low.
“It’s not going to be a banner year,” Plese said. “It will let us gain back some ground, but it will be just slow and steady in this market,” he said.
The 2012 turnaround was clear but not monumental, Higgins noted. “You have to remember it’s compared with 2011, when we hit bottom,” he said.
The number of homes sold in Spokane last year grew by 12 percent, to 4,527 from 4,023 in 2011. The median price for homes sold last year in Spokane grew by 3.7 percent, to $160,000 from $154,300.
The Spokane market is not unique in that regard; only 49 of the nation’s top 146 cities saw a median price decline last year, according to Realtor.com.
“I thought we wouldn’t see a price increase until 2013,” Higgins said. “But we actually had a pretty good year, comparatively.”
Kootenai County’s median price grew faster than Spokane’s did – 6 percent over 2011, said Kim Cooper of the Coeur d’Alene Association of Realtors. The 2012 Kootenai County median sales price was $157,000.
Higgins said median home sales prices were up sharply in Seattle last year – 16 percent according to Realtor.com. But “Seattle just has more economic activity going on,” Higgins said. “It comes down to more jobs boosting their economy than ours.”
The 2012 scorecard produced other upticks in the housing market. They include:
• New homes are selling faster than anticipated; 537 new homes were sold last year, compared with 497 the year before.
Much of that boom came in December, when a whopping 75 new homes were sold, most of them in northwest Spokane (an area the Realtors group uses to include the Kendall Yards development), and in Spokane Valley.
Higgins attributed the new-home activity to interest rates remaining below 4 percent, and supply-demand dynamics.
“A lot of people may not be finding the house they want, so they’re gravitating toward a new house. With rates so low, they figure they can afford more house for the money,” he said.
New-home construction tends to help accelerate economic activity. As new homes are sold, residents move in and purchase furniture, appliances, lawn and garden items and home services, such as security or lawn care.
• The number of homes for sale in the Spokane market is below 2,000 for the first time in several years. It ended the year at 1,994, compared with 2,325 in December 2011. That’s the lowest in Spokane since May 2006, said Higgins.
• Short sales – homes selling for less than the amount owed – also accelerated and removed properties that depreciate the overall market. Spokane saw 299 short sales in 2012, compared with 221 the year before.
• Apartment construction is on a tear in Spokane County. In 2011, 526 apartment units (in complexes of five or more) were completed. In 2012 the number jumped to 858, said Vicki Mundlin of Auble, Jolicoeur & Gentry.
For 2013, Spokane has 791 units under construction already, she said. The average in Spokane has been 750 apartment units added per year.
Coeur d’Alene had fewer than 40 apartment units built in 2011, jumped to 109 in 2012, and now has more than 300 under construction – a response to continuing demand for affordable alternatives to buying a home, said Mundlin.
The apartment numbers are only for market-value units, not tax-credit lower-income projects.
All that activity aside, most agents, such as Cooper with the Coeur d’Alene Realtors group, say they’re not ready to relax and count on an easy and profitable 2013.
“It’s better, but we’re still feeling like we’re climbing out of a hole,” Cooper said.