If you can’t buy it, build it: What to know if you’re thinking of building a home in Spokane County

Chances are, if you’re looking to buy a home in Spokane County, you’re waiting in line.

The alternatives – building your own house, hiring a builder or buying one under construction – present their own challenges that go beyond the historically low inventory and high prices the area’s market is seeing.

“The last time we had an inventory this low, we had quite a few developments going on in the area, in 2006,” said Rob Higgins, executive officer of the Spokane Association of Realtors. “Today, we don’t have that many developments going on.”

The number of single family residential home permits issued inside the city limits of Spokane and Spokane Valley have declined in 2017 compared to the year prior, and Spokane saw its third straight year of declining permitting through March, according to city records. Spokane County permitting continues to increase apace, however, with 2017’s 174 single family home permits issued in the first three months of the new year nearly double the 99 that were issued during the same period in 2015.

Those looking to build, rather than wait for an existing home to become available on the market, will have to compete for dwindling available land within city limits and more stringent requirements on water access in rural areas, where more land is available for construction. They should also be prepared for a longer wait until their home gets built, according to data from the U.S. Census Bureau.

“That’s the struggle that builders are having, that a lot of land is tied up, and finding that land that is truly available,” said Arthur Whitten, government affairs director for the Spokane Homebuilders Association.

Last year, the City of Spokane issued a report focusing on the amount of available, developable land within city limits. A survey of privately owned land with an assessed value less than $25,000, indicating it was vacant or underdeveloped, resulted in discovery of about 2,500 acres of property that could be developed into single-family homes.

The City of Spokane has an average of about 2.2 homes per acre, according to the U.S. Census Bureau. That would mean that if every parcel of land available for single-family construction identified in the report were developed, the city could add about 5,580 homes. Spokane has already issued permits for 2,300 such homes since 2006, according to the infill housing report, and inventory has continued to plummet during those years.

The areas where development could most likely occur sit mostly on the outskirts of the city, according to the report. Greater permitting activity in Spokane County indicates a majority of the home building occurring right now is taking place in rural, unincorporated areas, which are also most prone to the permitting limitations of the Washington Supreme Court decision requiring local review of stress on private wells before permits are issued. The legal change in the Whatcom County v. Hirst decision has been lauded by environmental and neighborhood advocate groups as protecting watersheds and wildlife from rampant development.

Any regulation that adds time or cost to the permitting process would be passed along to potential home buyers by the builders, said Whitten, and the association has been fighting such rules to keep costs low. He pointed to a recent publication from the National Association of Homebuilders that showed for every $1,000 of additional cost that’s added to the price of a new home, 371 Spokane-area households are priced out of buying.

“We support market-based policies that produce more affordable housing,” Whitten said.

Anyone in the market to build should be ready to wait before moving in, especially if they plan on having a say in the construction process, according to the most recent data from the U.S. Census Bureau. Homes built for sale, often called “speculative homes” that involve the services of a realtor, are most often completed in less than six months in the western United States, according to numbers published last year. When a landowner hires a contractor directly, the majority of homes take seven months to build. The majority of owner-built homes take at least 10 months to construct, with 34 percent of those homes taking 13 months or more.

“Buying a new house is generally more complicated,” said Higgins, the head of the realtor’s association. “Generally speaking, generally when you’re watching the house being developed from the get-go, there are things you want to change in the process.”