Earlier this month, the Journal of Business hosted Spokane developer and real estate broker Jordan Tampien for its most recent Elevating The Conversation podcast about The Inland Northwest Housing Market.

The Elevating The Conversation podcast is available on Apple Podcasts, Amazon Music, Spotify, and elsewhere. Search for it on any of those platforms or the Journal's website to hear the entire conversation, but for now, here are five takeaways—edited for space and clarity—from the episode, which is about 45 minutes long.

1. The single-family home sales market is flat, as many buyers and some sellers are still in a holding pattern. Oh yeah. It's definitely flat. I think you had this contingent of people thinking rates were going to come down, so it's more of a hold for them.

There's an underlying piece that is just fundamentally different than 2008 or even before. You have a lot of people sitting on equity with low interest rates. There was some stat out there that almost 40% of homeowners have either a mortgage loan at a 3% interest rate or a paid-off house. So, you have this large contingent of people who have to be super motivated now to move, because that payment is going to double for something that probably doesn't double the value to you.

What you're seeing is, if it's dialed in and priced right, it's moving. But the issue you still have is, some people are looking at their neighbor who sold their house for $900,000 and thinking they should get that. Well, that was a different market. That's a different time. 

So, some of the flat, or some would say declining, market is because it was mispriced to start with.

I'm still bullish on the market. We have less than a four month's supply of homes. What that means is, at the current sales pace, all homes for sale now would be gone within four months. That's a healthy market.

2. Appraisals are bringing home prices into line, in some cases. We have a lot conversations in the office about low appraisals. You're starting to see more and more of those.

It's super frustrating. The buyer agreed on a price. The seller agreed on a price. You're waiting on one appraisal. It's gonna appraise, right? Not always the case. 

What that looks like is, you have a house under contract now at $700,000. Appraisal comes in at $650,000. The closest comparable property the appraiser could find was for $650,000. 

So, the seller would have to drop their sales price to the $650,000, then the lender would close on it. Or the buyer brings the additional cash. Sometimes, it's a mix of the two.

It forces some of the realism around pricing, because if I'm going in to talk to my seller, I'm saying, "Hey, we can go at $700,000, but the reality is, if we bring somebody in with a loan, it may not appraise for that." And now we're going to have to come down to that $650,000. It sparks that conversation.

3. The market is a big challenge for first-time home buyers. You're seeing this delta grow between rent prices and mortgage price. Usually, it's rent and then the American dream is to step up to that house. It was within range. Well, now, the monthy cost of a mortgage is double, almost triple monthly rent.

In Spokane, because everyone loves living here, our values shot up so high. It used to be $150,000 for a starter home, which matched rent prices with a mortgage cost. Now, all of a sudden, you're at $350,000 for a starter home.  What makes that even worse is now, the mortgage rates are 7%, versus 4%.

Combine those two factors, and that's where I think a lot of people's fear right now is stagflation. You still have higher interest rates. Consumer costs are still high, and so it'll be an interesting affordability conversation. I don't think just lower rates will fix it. It's just affordability across the board.

4. More condominiums are likely to come online in Spokane eventually. If you develop a condominium project in Washington state, you're liable for seven years for most things in that condo. Even though you sold it and you think you're done, you're not, really.

It's a really good way for attorneys to make money. You come back at seven years and put together a lawsuit. The roofs are leaking over here. The foundation settled a little. The sheet rocks cracked. It's more intense than that, but technically, that's the issue.

So, in the eighth year after a project is finished, I can convert an apartment to a condo, and it reduces a lot of that liability. But now, you're talking about eight years out to make that conversion. 

The Peyton building office-to-apartment conversion in downtown Spokane is a perfect example. That would be my goal is to sell it as condos down the road.

What I would've loved to have done was develop 96 condos right away, and then sell them off. That would be ideal for that location. The issue is, I wouldn't want the liability of what could happen in a 120-year-old building in the next seven years. So, it'll be 96 apartment units, all market rate.

I think you're going to see some of the recent office-to-apartment conversions eventually do that. The condo sell. For the most part, it's a pretty desirable downtown. There just are not a lot of condos.

5. While the housing sector has its challenges, it has strength. We're not in a crisis, definitely not a housing one. 

If you're sitting on the sidelines thinking rates are going to come down, well, what if they don't? What does that look like? What if we add a cool wave park in the middle of the Spokane River or the population triples? 

I think what's cool is we can have a conversation that's not in the middle of a ticking downward market, like what the stock market did when tariffs were introduced. What happened to housing during that? Nothing. 

I'm really supportive of the civic side of what Spokane is doing now. I'm super bullish on Spokane and the way we're headed. If you're looking for a house, I think it's the perfect time to really dive in and do that. 

This interview has been edited for length and clarity.