Spokane’s tight real estate market is about to get even tighter. After years of underbuilding, the Spokane-area fires destroyed 719 homes, a record for fire damage in Washington state. 

The previous record? The Spokane County Gray and Oregon Road fires in 2023, in which 366 primary homes were destroyed.

Median home prices in the affected areas of the Old Trails, Autumn, and Fairview fires are about $533,000, which makes it easy to see how damages could easily exceed $500 million to homes and property. 

When the fires struck, we had 459 listed homes for sale in these three fire zones. Near neighborhoods where these losses took place, move-in ready homes will be a premium, while homes outside these areas also will see short-term pressure with new buyers entering the market over the next six months. Additionally, wildfire victims will be actively searching for short-term rental solutions, causing a temporary drop in available properties, especially for single-family homes. 

We’ve already heard from some fire victim families about their plans. About half say they won't rebuild, based on information they provided in our applications for financial assistance. Many are also sharing with us that they intend to move to Idaho.

Insurance companies already have halted new policies in the area until all fire activity is over. Spokane Realtor records indicate there were 152 pending real estate transactions at the time of the fires. Insurance carriers in our area put new policy issuances on hold until after these fires were out. 

As we saw after the fires in 2023, policies become more stringent, more difficult to get, and insurers more reluctant. Recently in Spokane, Washington’s Insurance Commissioner Patty Kuderer expressed her concern that many of these fire victims won’t be able to reinsure their replacement homes. After the last round of wildfires, we saw insurance carriers leave the area, with all of us seeing impacts to our rates. 

This will not be a speedy recovery. Rebuilding permits from the 2023 fires are still in the works. Additionally, fire claims from three years ago are also still being processed. A recent Washington Insurance Commissioner report points out the biggest challenge is that most homeowners were underinsured. 

Additionally, many homeowners tell us the new Washington State Building Codes are adding tens of thousands of dollars to the cost of their rebuilding.

Looking ahead, contractors will be stretched thin, and the local building permit process will face heavy stress. For many fire victim families, the hopes of returning home after a few months may, in reality, take years. 

The Washington State Building Code Council changes that become effective next year are expected to eliminate many of the “like-for-like” provisions, meaning many homeowners will not be able to rebuild what they have lost. Spokane County, however, is working to “vest” building permits today, in an effort to help wildfire victims lock-in to the standards as they exist in 2026.

The city of Spokane should consider it as well.

Property values of homes near forests often decrease 10% after a nearby wildfire, a study by the U.S. Forest Service shows. However, the areas struck by fire this year are among the most desired in our region. While most of Spokane County has seen home prices remain flat over the past few years, Spokane Realtors' records show the Autumn Lane, Fairview, and Old Trails fire areas saw home prices increase. 

The median listing price for the areas in July 2022 was $489,000. In 2026, it’s $533,000 — a substantial increase.  

Appraisal changes

In November, the entire appraisal industry is set to undergo a massive change. New systems will require greater detail as this industry undergoes a digital transformation. New valuation formulas now cover a wider variety of property characteristics and rigorous documentation of any upgrades. 

Many of the appraisers we work with are concerned this new system may not be ready to evaluate fire damage. For example, if your neighbor’s house has burned down, but yours is OK, has that changed your property value? By how much? 

Appraisal delays are expected to affect everything from mortgage approval to closing on time.  

If we don’t refocus our efforts immediately on recovery, there are several studies about what to expect regarding the long-term effects of wildfires that we can learn from:

• Temporary displacement for wildfire victims becomes permanent. Especially when reconstruction takes years.
• Communities develop a stigma triggering reduced amenity value and lowered economic growth.
• Lost tax revenues for local entities.
• Reduced insurance coverage and higher premiums.
• Permanent loss of neighbors, employees, and students.

There are many ways we can support rebuilding:

• Allow homeowners to rebuild what they lost. A like-for-like solution will help owners rebuild to the standards in place when it was originally constructed; everything from zoning to building codes. 
• Vested building permits will allow owners to lock-in permits now, before more restrictive standards go into place.
• Fast-track building permits that move wildfire victims to the front of the line.
• Help with demolition costs, just as Spokane County did in 2023. 
• Push for home insurance solutions and consider what other states have done to require continued coverage when homes are rebuilt. 
• Incentivize rebuilding efforts, from cutting fees to financial investments, we need our neighbors to recover and return. 

Above all, we need our agencies to be kind. Disaster recovery will not be easy. Spokane Realtors will be actively working with our partners on ways to help streamline the process for rebuilding and encourage new areas of growth that help promote a better way of living. And in truth, what helps them will help all of us to remain economically healthy.

Our hearts demand we take immediate action. Our community’s long-term future depends on it.