How hot is the Spokane-Kootenai county housing market? Smokin.


Through the first 33 weeks of this year, building departments in the Spokane and Coeur dAlene areas issued permits for 32 percent more homes than in the year-earlier period, when the number of such permits also surged, Avista Corp. economist Randy Barcus says.


Through Aug. 20 this year, jurisdictions in the two counties had issued a combined 2,826 permits for new single-family homes and apartment units, compared with permits for 2,136 units through the first 33 weeks of 2002, Barcus says. The increase follows a 27 percent jump in 2002 from the 1,678 units permitted in the first 33 weeks of 2001.


Weve already permitted more homes this year than we did in four of the last eight years, including in 2000 and 2001, Barcus told a Spokane Regional Chamber of Commerce leadership retreat last week.


Weve still got 19 weeks to go in the year, and I dont think theres going to be any slowdown, he said. It could hit 4,200 homes by the end of the year.


Reached later, Barcus amended his estimate for full-year permit activity. I was being a little conservative, he says. It could easily be 4,500 homes.


He also declares flatly, This is a housing boom. While there is no classic definition of such a boom, back-to-back annual increases of roughly 30 percent in housing activity qualify as a housing boom in his opinion, he says.


The Spokane-Kootenai county permits issued through Aug. 20 have a total valuation of $449 million, already ahead of the $400 million that he would expect in a normal year, Barcus says. He estimates that the permits in the two counties could top $600 million this year, well over the $529 million total last year.


While commercial construction has been down so far this year, the permitting of the convention center expansion downtown later this year will make up for that, Barcus says.


Generally speaking, economists like construction spending because that money tends to roll through the economy, Barcus says. He says its important to remember that permit valuation figures for construction of single-family homes and apartment units dont reflect the value of the sites the dwellings are built on nor the amounts that homeowners spend to furnish and landscape their new homes.


The convention center expansion, Spokanes potential to grow as an air-freight hub, and the U.S. Air Forces decision to deploy its new air tanker at Fairchild Air Force Base first and to build a school for the tanker there all should create job growth here, leading to more construction, Barcus says.


Meanwhile, contractors, appraisers, and others in the housing industry have been telling him that in the current housing boom, two-thirds of the homes that are going up are being built speculatively, meaning theyre started before someone has agreed to buy them, but 90 percent of those houses are selling before theyre completed, Barcus says.


Also, appraisers have told him that the only homes here that are appreciating are country estate homes that sell for $250,000 and up, Barcus says. Thats because growth management has made it difficult to build such homes, which typically have larger lot sizes.


Growth management, he says, is the one factor that could put a damper on the additional construction, Barcus says. He says the business sector needs to encourage officials to update the comprehensive plan and urban growth area to accommodate growth.