Spokane-area home sales in 2018 outpace previous year
Observers say rising prices, low inventory might slow 2019 market momentumJanuary 17th, 2019
Spokane-area single-family home purchases in 2018 saw a small increase compared with the previous year, closing out at 8,212 sales, up 1 percent over 2017, a report released last week by the Spokane Association of Realtors shows.
Single-family homes on less than one acre, including condominiums, saw total sales of 8,151 through the association’s Multiple Listing Service in 2017.
“It was a very good market in 2018,” says Rob Higgins, executive officer of the Spokane Association of Realtors. “It’s the second highest total we’ve ever had … of closed sales in Spokane County.”
The record of 8,373 sales was set in 2005, prior to the Great Recession.
Dallas Becker, owner and designated broker of Windermere North Spokane LLC, adds, however, “It’s interesting to note in seven out of the last eight months in 2018, if you looked at year-over-year sales, we were actually down compared to 2017. So, the trend line is certainly negative relative to the total sales.”
Becker attributes that to a lack of available inventory and the rising home prices.
The median sales price for all of 2018 was $235,000, up 11.9 percent compared with 2017, during which median sales price was $210,000.
Becker contends the lack of inventory is causing a dramatic increase in prices.
“Especially in the entry-level housing—anything between $100,000 and $200,000—there just is virtually no inventory, so when something does come on the market, you have multiple offers and very competitive bidding situations,” says Becker. “It’s just making it tough on that first-time buyer.”
University of Washington’s Runstad Center for Real Estate Studies, in Seattle, reported Spokane County had a home affordability index of 154.3 in the first quarter of 2018, which over the year dipped to 133.5 in Q2 and 133 in Q3. No data was available for the fourth quarter at the time of publication.
On that index, the higher the score, the more people in that market can afford to buy a home. An index rating greater than 100 indicates a family with a median household income can purchase a median-priced home.
Despite the decline in affordability, Spokane County still had one of the highest affordability ratings in the state, according to the report.
Meanwhile, the MLS report shows inventory was down 21 percent in December compared with the year-earlier month. The December inventory of 798 properties represents 1.4 months of supply, making it a strong sellers’ market.
The MLS had an inventory of 1,010 properties listed in December 2017.
“The supply side is not there,” says Higgins. “That lack of inventory has created headwinds (in 2018) and will continue to create headwinds as far as homeownership … we just haven’t had enough new housing starts over the last 10 years since the downturn, and it’s coming home to roost.”
Becker adds, “Typically, in a market where resale inventory gets tight, the builders pick up the slack and they’re built as fast as they can, but with the limited availability … the new construction just hasn’t been able to pick up the slack.”
Becker predicts sales will decline nearly 10 percent and home prices will increase between 7 percent and 9 percent, while Higgins says he is hoping for a 1 percent to 3 percent increase in sales.
Higgins admits, however, most national reports are predicting a decrease in sales for Spokane County in 2019.