Home prices in the Spokane real estate market 2020 are expected to rise at a steady pace. There is a high housing demand in the market and the current supply equals 1.2 months. It shows that the Spokane housing marketing is favoring sellers. The home sales in Spokane, WA through April 2020 were up by 9.4% compared to last year. The median closed price was $277,500, an increase of 13.3% from a year ago.
Let’s talk a bit about Spokane before we discuss what lies ahead for investors and homebuyers. Spokane is the second-largest city in Washington State. It is sited on the Spokane River in the foothills of the Rocky Mountains. The population of Spokane is around two hundred thousand. However, the Spokane real estate market includes the broader metropolitan area that is home to nearly 600,000 people.
This real estate market of Spokane is sizzling hot though it is often overlooked for hotter markets like Seattle and San Francisco. Spokane homes are selling faster than Seattle homes. Inventor is very tight. Last year the Spokane’s housing market was hotter than Seattle’s for the first time in six years. Why should one invest in this hot market in Washington? Well, to begin with, Spokane has a record of being one of the best long term real estate investments in the U.S. over the past 10 years.
Like most cities in Washington State and nationwide, Spokane has experienced home price increases over the last couple of years. They were nearly double the national average. The Spokane real estate appreciation rate in the last quarter was around 1.13%, which amounts to an annual rate of 4.59%. However, it is quite unclear whether it would remain steady or not due to the short term effects of the ongoing pandemic. Economic uncertainty may hold back sales volume for a short term in 2020. Most housing analysts expect house prices to rise more slowly over the coming months than they did in recent years.
In this article, we shall discuss some more important reasons why you may want to consider buying Spokane investment properties in 2020. Please note that many variables can potentially impact the value of a home in Spokane (or any other market) and some of these variables are impossible to predict in advance.
Spokane Housing Market Trends & Statistics 2020
We shall now discuss some of the most recent housing trends in the Spokane area and compare it with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region. Spokane has been one of the hottest real estate markets in the country for many years.
Spokane is currently a hot seller’s real estate market – which means that the demand from buyers is exceeding the current supply of homes for sale. The pricing of homes is trending higher and is more attractive for sellers in the current phase. The shortage of supply and an increase in the demand for housing will push the prices higher.
The latest Spokane Housing Market Report from the “Spokane Association of Realtors” shows that inventory remained very tight in April 2020 and more sellers lowered the asking price of their homes. In April 2020, Spokane was a seller’s real estate market.
Below is the summary of the housing market for single-family residential/ site built properties on less than one acre and condominiums.
Spokane home sales were down 11.7%, from a year ago.
Closed sales of single-family homes on less than one acre including condos for April 2020 total 508 compared to April 2019 when the total was 575.
The average closed price for April 2020 was $303,583 compared to April 2019 when the average price was $273,597.
The median closed price for April 2020 was $280,091 compared to April 2019 when the median price was $254,950.
Inventory at the end of April 2020 was 602 which represents a 1.2 months supply.
Sales of Distressed homes accounted for .006% of sales in April 2020 compared to 3.1% in April 2019.
On Movoto.com, Spokane’s current home resale inventory number is 389, which increased by 0 percent since April 2020. The median list price in Spokane was less than 1% change from April to May. The median list price per square foot in Spokane is $164. April 2020 was $162. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in May 2020.
Current Month
1 Month Ago
1 Year Ago
Active Inventory
389
386
2+19350%
Median List Price
$409,000
$399,225+2%
$172,920+136%
% Distressed
0%
0%
0%
Median Days on Movoto
37
39-5%
16+131%
Median Home Size
2,506
2,494
1,128+122%
Median $/Sqft
164
162+1%
107+53%
Market Snapshot Courtesy of Movoto.com
The ongoing pandemic has not impacted the real estate activity in the region by any significant measure. However, there were some declines in listing activity and pending home sales in April. The closing process is taking longer than usual due to COVID-19 safety precaution all over the country.
According to the “Spokane Association of Realtors,” the Net Closed Volume for April 2020 was $208,452,910. 1,176 listings were processed and 686 closed sales. Compared to last month, Net Closed Volume is down $35,717,050. Listings are down 274 and sales are down 149. Compared to last year, Net Closed Volume is down $18,903,614. Listings are down 645 and sales are down 176.
The pandemic, however, has not had much impact on prices yet. Historically low-interest rates, tight inventory, and strong demand are continuing to favor sellers in the Spokane housing market.
Spokane Real Estate Market Forecast 2020 – 2021
What are the Spokane real estate market predictions? Spokane housing market 2020 is shaping up to continue the trend of the last few years as one of the hottest markets in the nation. Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. The Spokane house prices remained flat from 2012 to 2015. Since 2015, the median home price in Spokane has appreciated by roughly 67.2% from 158,000 to $264,212.
Last year saw was the fourth consecutive year of home price gains. The median home value in Spokane (on Zillow) is $264,212, up by 13.1% from a year ago. According to Zillow’s statistics, currently, Spokane is a sizzling hot seller’s market. The latest Spokane real estate market forecast depicts a little cooling-off trend. The home prices are predicted to remain flat or may increase by just 1.4% in the next twelve months. This is perhaps due to the short term impact of the coronavirus pandemic on real estate sales in the Spokane area.
Here is the Spokane, WA real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 1.4% until March 2021.
Snapshot Courtesy of Zillow.com
Here is another short and crisp Spokane housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Spokane is 72% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in Spokane is 72% during this period. If this price forecast is correct, the Spokane home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Spokane Housing Market Forecast.
Spokane Real Estate – Spokane, WA Homes For Sale
Spokane housing market has a mixture of owner-occupied and renter-occupied units. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Spokane. Other types of housing that are prevalent in Spokane include duplexes, rowhouses, and homes converted to apartments.
Spokane single-family homes account for 65.75% of the city’s housing units. At the national level, the single-family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single-family rental units. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
Currently, there are 461 homes for sale in Spokane, WA on Zillow. Additionally, there are 85 homes for rent. Under potential listings, there are about 12 Foreclosed and 71 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
The median list price per square foot in Spokane is $224, which is higher than the Spokane-Spokane Valley Metro average of $209.
The median price of homes for sale is $259,972.
The median sale price for March was $260,800.
The median rent price in Spokane is $1,295, which is lower than the Spokane-Spokane Valley Metro median of $1,350.
There are currently 1469 homes for sale and 235 homes for rent in Spokane, WA on Realtor.com, a real estate listings website. The newly listed homes are 208. According to their statistics, in April 2020, the Spokane housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale. Demand outpaced the supply favoring sellers.
Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Spokane have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 100% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.
Graph Courtesy of Realtor.com
In April 2020, the median list price of homes in Spokane, WA was $290K, trending up 5.5% year-over-year. The median listing price per square foot was $144. The median sale price was $256.6K.
Spokane Real Estate Foreclosure Statistics
Here are some foreclosure statistics of the Spokane real estate market. As per the Spokane foreclosure data by Zillow, in Spokane 0.6 homes are foreclosed (per 10,000). This is lower than the Spokane-Spokane Valley Metro value of 0.7 and also lower than the national value of 1.2. The percent of delinquent mortgages in Spokane is 1.0%, which is lower than the national value of 1.1%. The percent of Spokane homeowners underwater on their mortgage is 3.8%, which is higher than Spokane-Spokane Valley Metro at 3.5%.
There are currently 172 properties in Spokane, WA that are in some stage of foreclosure (default, auction or bank-owned) while the number of homes listed for sale on RealtyTrac is 936. In April 2020, the number of properties that received a foreclosure filing in Spokane, WA was 75% lower than the previous month and 81% lower than the same time last year.
Potential Foreclosures in Spokane
172 (RealtyTrac)
Homes for Sale in Spokane
936
Recently Sold
2839
Median List Price
$260,000 (4% rise vs Feb 2019)
In Spokane, the zip code with the highest foreclosure rate is 99212, where 1 in every 4568 housing units is foreclosed. 99208 zip code has the lowest foreclosure rate, where 1 in every 22034 housing units becomes delinquent.
Spokane Real Estate Market: Is It A Good Place For Investment?
Now that you know where Spokane is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Should you consider Spokane real estate investment? Many real estate investors have asked themselves if buying an investment property in Spokane is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
Although this article alone is not a comprehensive source to make a final investment decision for Spokane, we have collected ten evidence-based positive things for investors who are keen to buy an investment property in Spokane.
Let’s look at the state of the Spokane real estate market and the factors driving the market in the short and long term.
1. Spokane’s Geography Limits Housing Supply
Geography up and down the West Coast limits the potential housing supply. We can’t build on water. The desire to preserve views and community limits how high vertically builders are allowed to build when they redevelop properties, while the mountains don’t provide a lot of places where you can build more than a basic bungalow.
This explains why the Spokane real estate market along with Portland, San Francisco, and other Pacific coast cities are seeing rapid appreciation. In Spokane’s case, the riverfront is simply desirable but the mountains limit how far the city can expand. So, too, do the many national parks and wilderness areas near the city.
2. California’s Loss is Spokane’s Gain
In 2017, more than 130,000 people fled California for surrounding states. Nor is this trend going to slow down, given that half of the adults say they are considering leaving the state. Housing costs and availability were two of the most commonly cited reasons, though security, crime, taxes, and jobs were also factors.
And while Californians moving to Texas makes the headlines, in reality, most stay closer to home. In 2016 alone, more than 50,000 Californians moved to Washington. Furthermore, urban dwellers tend to move from city to city, moving from downtown San Francisco to the Spokane real estate market, where they can afford to buy homes.
3. Spokane isn’t like Oregon
We can talk about the number of people fleeing the oppressive regulations and high tax rates of California driving up real estate prices across the West Coast and the Rocky Mountains. However, not all states are equally attractive. We’re recommending investing in Spokane rental properties instead of hot markets like Portland, Oregon because of Oregon’s recent legislation. For example, they became the first state to implement statewide rent control.
State law to limit how fast rents can rise is intended to help renters, but it creates cash flow for landlords that inevitably leave them unable to maintain properties. Long term, these rules hurt renters, too, because an inability to recoup the cost of construction and maintenance prevents new housing stock from being built.
Given how well economists understand that rent control hurts housing quality and affordability by limiting new construction except for luxury units that are exempt from rent control rules, we’re sure future laws that undermine the profitability of real estate in Oregon will go into effect soon. Invest in the safer, saner Spokane real estate market instead.
4. Spokane Real Estate Appreciation Is Strong
One reason to buy Spokane rental properties now instead of waiting is that prices are appreciating so fast. For example, home values increased by more than 10% in 2018. For the average $200,000 home, the value went up to $20,000. The median home price increased from $220,000 in 2017 to roughly $260,000 in 2018.
5. Spokane Housing Costs Remains Cheap Compared to Other West Coast Cities
Silicon Valley made the news when the cost of the average home there passed the million-dollar mark. The median home price in California passed half a million in 2017, and while home sales in California have slowed, demand has not. Yet Spokane remains relatively affordable. You could buy two Spokane rental properties for the price of one property in California, and if you hunt for a bargain or choose smaller starter homes, you could buy several rental properties in the Spokane housing market for the price of one property in a hot California market. The fact that living in Spokane is cheaper than the U.S. average is only another reason for people to move here.
6. Spokane Beats Seattle, Too
Seattle is larger than Spokane, but the Spokane real estate market is hotter because the area is cheaper than Seattle. Millennials, in particular, are flocking to the Spokane housing market because rents are half that of Seattle, while home prices are a third that of Seattle. Note that if a one-bedroom apartment in the Seattle market costs around $1000, you could charge $2000 or more for Spokane rental properties with enough space for a growing family. Seattle may be making its own tax mistakes from the soda tax to its fight to pass a city income tax. This makes buying in more sedate Spokane a wise choice.
7. Spokane Has Low Tax Rates for a West Coast City
California is one of the highest taxed states, taking 11% of one’s income. That’s somewhat more than the 9.3% peak rate Washington State takes. That’s also lower than Oregon’s 10.3% income tax rate. Another point in favor of Washington State is its lower average property tax rate. The average property tax rate for Washington properties is around 1.1% of the assessed value, close to the national average of 1.2%. The benefit of the Spokane real estate market is the significantly lower property values compared to Seattle that results in a far lower property tax bill.
8. Spokane Rental Market is Relatively Landlord Friendly
Washington State doesn’t put a limit on security deposits, though it has strict deadlines by which landlords must refund the money. Landlords can raise the rent if they provide at least thirty days’ rent. Tenants have three days to pay the rent before an eviction can proceed. Washington State allows tenants to be evicted for any cause, though the
Tenants Union wants to prohibit evictions unless there is an acceptable reason to be evicted such as the property is being sold. Washington state law says that tenants can withhold rent if important repairs are not completed, and they can repair serious issues and deduct it from their rent. This is an area where Spokane beats Seattle, too. Seattle requires 90 days’ notice to evict someone without cause, while Spokane has no such regulations.
9. The City Is Poised to Take Off
One reason why Spokane long lagged behind Seattle was its higher unemployment rate. Seattle has a roughly 3% unemployment rate, significantly lower than the 5% unemployment rate seen in Spokane. Spokane’s economy, though, is seeing a surge of higher-wage jobs. Out of the tens of thousands of new jobs created since 2010, the majority of them pay more than the average county wage – which is in line with the national average. The promise of better pay will lure many people to Spokane to live, fueling demand for the Spokane housing market.
10. WSU Is Fueling Growth in Spokane
The student market consisting of 18 separate universities does pump a lot of renters into the Spokane housing market, but it isn’t a huge market segment in and of itself. However, the impact of the Washington State University campus in Spokane is massive. The Spokane housing market is certainly impacted by the relocation of the College of Pharmacy to the local campus, the new Health Sciences Campus, and tens of millions of dollars of new educational facilities.
The biomedical research facilities should add to the number of high paying research and educational jobs in the area. A side benefit of the large campus and the associated jobs is that it makes the Spokane area’s population much younger than average, guaranteeing demographic momentum as people remain here for work and choose to buy homes for their growing families.
Spokane Real Estate Market: Spokane Investment Properties
Are you looking for an investment property in the Spokane real estate market? Maybe you have done a bit of real estate investing in Spokane but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Spokane is a relatively cheap real estate market on the West Coast. It is already seeing increased demand and property valuations, while it remains a safe place to invest in real estate. Skip Seattle and Silicon Valley and invest in the future growth of Spokane.
Good cash flow from Spokane investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Spokane in a growing neighborhood would be key to your success. If you invest wisely in Spokane’s real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Spokane investment property is, the lower your ongoing expenses will be. As with any real estate purchase, act wisely. Evaluate the specifics of the Spokane housing market at the time you intend to purchase. When looking for the best real estate investments in Spokane, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.
The asking price of single-family homes for sale in Spokane (on Realtor.com) starts from $59,900 for a 1-bedroom house and can go up to $2.6M for a luxury 6-bedroom house located in the neighborhood with zip code 99208. There are currently 194 new construction houses available for sale in the Spokane housing market (on Realtor.com). You can get a 2-bedroom new construction single-family house for around $205,000 located in the North Side neighborhood of Spokane.
The most affordable new construction homes are located in this neighborhood. Rockwood has a median listing price of $497.5K, making it the most expensive neighborhood of Spokane. Logan is the most affordable neighborhood, with a median listing price of $190.5K.
Home prices in Spokane are well above the national average for all cities and towns in the United States. Here is a snapshot that shows the median home values in some of the popular neighborhoods of Spokane.
Courtesy: Zillow
If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. You can also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the hottest real estate markets like Spokane, WA. You should also join real estate investment clubs in Spokane and try to make connections with fellow investors.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Spokane.
Consult with one of the investment counselors who can help build you a custom portfolio of Spokane turnkey investment properties in some of the best neighborhoods. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Spokane turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Spokane | Washington Real Estate Investment Opportunities
Apart from the Spokane real estate market, you can also invest in another hot market like Seattle. Seattle’s tech landscape and real estate market are rapidly evolving. Google just upped the size of its new Seattle campus. Facebook has been on a hiring spree in the Seattle area, particularly for its virtual reality arm Oculus, which is growing fast in Microsoft’s backyard of Redmond. GeekWire reported on new HQ leases for top Seattle startups Rover and Outreach. Other companies continue to grow and that will pick up any slack. Tech has blown up Seattle. For the past 5 years, we have seen 50% price growth in this market which has priced out many middle-class buyers.
Another city in Washington where you can invest is called Tacoma. Tacoma sits at the southern end of Puget Sound and straddles Commencement Bay. Being a large port town, it is already flanked by smaller cities and backed by mountains. This prevents the city from simply expanding outward, forcing developers to pay for the more expensive redevelopment of existing properties. This will keep prices in the Tacoma real estate market high as long as the job market remains strong. It certainly limits the ability to quickly bring new supply to a tight housing market that has only 1.5 months of inventory on hand.
The third real estate market which is good for investment is Walla Walla. The Walla Walla real estate market is much more stable than coastal real estate. Property prices have appreciated about six percent in the past ten years. This is slow, steady growth. It is far better than the depreciation you see in some rural areas. It doesn’t provide the excitement of Seattle and San Francisco property prices rising by double digits, but you also don’t see housing prices crash because a tech giant decides they want to leave the area, citing insane real estate prices.
Let us know which real estate markets you consider best for real estate investing in 2020!
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
Spokane demographics
https://en.wikipedia.org/wiki/Spokane,_Washington
Latest Market Data, Trends, and Statistics
https://www.zillow.com/Spokane-wa/home-values
https://www.littlebighomes.com/real-estate-spokane.html
https://www.neighborhoodscout.com/wa/spokane/real-estate
https://www.movoto.com/spokane-wa/market-trends
https://www.realtor.com/realestateandhomes-search/Spokane_WA/overview
https://www.sammamishmortgage.com/spokane-the-other-hot-market
Foreclosures
https://www.realtytrac.com/statsandtrends/wa/spokane-county/spokane/
WSU impact
https://advantagespokane.com/workforce
Taxes
Oregon / rent control
https://www.heraldtribune.com/news/20190304/oregon-becomes-first-state-to-impose-statewide-rent-control
What does economic evidence tell us about the effects of rent control?
California’s loss
http://www.ktvu.com/news/ktvu-local-news/california-exodus-study-says-more-people-leaving-state-than-moving-here
https://www.cnbc.com/2019/02/12/growing-number-of-californians-considering-moving-from-state-survey.html
https://www.tsishipping.com/blog/moving/top-10-places-californians-now-call-home-2018
Restricted density/building height
http://www.spokesman.com/stories/2017/mar/12/spokane-leaders-look-to-lift-restrictions-on-build
Spokane is relatively cheap
https://www.prnewswire.com/news-releases/california-home-sales-close-year-on-downward-trend-as-home-prices-post-mild-gains-car-reports-300780469.html
It beats Seattle
https://www.krem.com/article/news/local/spokane-county/why-live-in-spokane-over-seattle-its-way-cheaper/293-561489776
Relatively landlord-friendly
https://www.nolo.com/legal-encyclopedia/overview-landlord-tenant-laws-washington.html
https://www.krem.com/article/news/local/spokane-county/tenants-union-landlord-association-look-at-regulations-on-rent-increase/293-605044268
High wage jobs
http://www.spokesman.com/stories/2017/feb/13/spokane-area-economy-is-creating-higher-wage-jobs
High appreciation
https://www.krem.com/article/news/local/spokane-county/spokane-co-home-values-increase-dramatically-for-2019/293-587065966
https://www.krem.com/article/news/investigations/2-on-your-side/spokanes-housing-market-hotter-than-seattles-for-first-time-in-six-years/293-eaa7b3d2-3281-410d-95b8-26c07f8e54c4
The post Spokane Real Estate Market 2020 Overview appeared first on Norada Real Estate Investments.