Look for activity in the commercial and residential real estate markets to continue their post-recession upswing next year, some market observers here say. 

Dave Black, CEO of Spokane-based NAI Black, says the Spokane-based commercial real estate brokerage had an “amazing” year in 2016, with brokerage revenue through October up 60 percent compared with the first 10 months of 2015, which also was a strong year.

Black attributes some of the revenue gains to a growing interest by local and out-of-area commercial real estate investors in the Spokane-area market.

Rates of return on investment properties have been low in recent years, but are due to edge back upward, especially if interest rates rise, he says.

On the leasing side, the retail sector is going strong downtown and in most parts of Spokane, Black says, adding “The South Hill has about a 1 percent retail vacancy rate.”

Leasing within the restaurant sector also is active, although Black says the restaurant business is so competitive and regulated that he’s not sure a lot of them are making money. Two chain restaurants—Café Rio and Anthony’s Beach Café—recently closed in the Black-affiliated Regal Plaza retail development on the upper South Hill.

Black says the new Washington State University medical school will bode well for growth in the medical office and health care sectors.

Downtown office leasing is the soft spot in the market, he says.

“There’s not much activity,” he says. “People aren’t doing anything in terms of moving (offices) downtown.”

In the residential real estate sector, 6,290 homes were sold through the Spokane Association of Realtors Multiple Listing Service in the first 10 months of this year, up 7.6 percent compared with the year-earlier period.

The median sales price for homes sold through the MLS in the first 10 months of 2016 was $195,500, up 8.7 percent.

Looking to next year, Rob Higgins, executive vice president of the Spokane Association of Realtors, says, “It should be another good year for residential real estate sales.”

Higgins says he expects to see sale prices continue to edge upward in 2017.

“We may see a drop a bit in the first couple of months next year, but median sales prices should be around the $200,000 mark during the year,” he says.

The number of newly constructed homes sold through the MLS has jumped by over 20 percent so far this year, compared with last year’s 10-month total.

In the first 10 months of the year, 699 new homes were sold through the MLS, with an average closing price of $290,500, up from 574 new homes sold with an average price of $281,912 through October of last year.

“New home sales are probably going to be the shining star for the year as far as percentage of increase,” Higgins says. “As inventory tightens, the response we’re going to see is more new construction.”

The main concern for homebuilders is long-term land availability for future residential development, Higgins says, adding, “That’s something we’re going to need to focus on in 2017.”

Perhaps related to the tightening inventory of single-family homes for sale in the Spokane area, hundreds of newly constructed apartments units are filling up as fast as they come onto the market, claims Joel White, executive officer of the Spokane Home Builders Association.

“There’s still an amazingly low vacancy rate,” White says. “Some rental buildings are 100 percent reserved when they receive a certificate of occupancy.”