The Spokane real estate market continues to benefit from real estate appreciation. In the past year, median home prices have actually increased 3.5 percent. Accordingly, median home prices are now resting at $176,900 in the Spokane housing market. The national average, however, is about $31,000 higher, making Spokane relatively affordable for investors and homeowners alike. Despite appreciating at a rate slower than the national average, Spokane has managed to pull itself out of a period of post-recession price weakness. For all intents and purposes, the Spokane real estate market is in a great position.
Prices in the Spokane real estate market continue to grow relative to last year. Homeowners have, therefore, been reintroduced to equity once lost. The following highlights how much equity has been gained relative to the year of the home’s purchase:
- Homes purchased in the Spokane housing market one year ago have appreciated, on average, by $8,508. The national average was $14,170 over the same period.
- Homes purchased in the Spokane housing market three years ago have appreciated, on average, by $26,806. The national average was $53,857 over the same period.
- Homes purchased in the Spokane housing market five years ago have appreciated, on average, by $22,368. The national average was $48,036 over the same period.
- Homes purchased in the Spokane housing market seven years ago have appreciated, on average, by $735. The national average was $13,870 over the same period.
- Homes purchased in the Spokane housing market nine years ago have appreciated, on average, by $29,700. The national average actually decreased $2,822 over the same period.
The city of Spokane has strong fundamentals in place, though not as strong as its neighbor to the west: Seattle. Nonetheless, local employment growth continues to be strong. At 2 percent, employment growth in Spokane is just over the national average. Fortunately, growth is on an upward trend, and should continue to progress in the coming year. Unemployment, on the other hand, is worse than the national average. At 7.6 percent, unemployment is weighing on the confidence of Spokane residents. At its current rate, Spokane unemployment increased 0.2 percent from this time last year and is 2 percent higher than the national average.
As of 2014, economic development hinged on the following industries: manufacturing, health sciences, professional services, information science and technology, finance and insurance as well as clean technology, and digital media. With an eye to the future, these industries should continue to support supply and demand within the Spokane housing market.
While the job sector could benefit from small improvements, affordability continues to support Spokane real estate investing and ownership. The cost of owning a home promotes activity, because it is more feasible for younger Americans to own in Spokane than most other cities across the country. In fact, Spokane homeowners only spend about 10 percent of their monthly income on mortgage payments, whereas the national average is more than 15 percent.
Affordability does not only help the average homeowner, but also Spokane real estate investing in general. The foreclosure market offers plenty of opportunity for real estate investors to capitalize on affordable properties with a promising return on investment (ROI). As recently as the first quarter of this year, the number of properties that received a foreclosure filing in Spokane was 22 percent lower than the previous quarter and 55 percent lower than the same time last year. However, Spokane real estate investing really benefits from distressed property discounts. Non-distressed home tend to sell for about $160,000. Conversely, distressed property sales average $114,000, or 29 percent less than non-distressed properties. That is a savings of about $46,000 per property.
While down nearly 60 percent from this time last year, foreclosures up for auction make up 57.5 percent of the distressed market. In a distant second, bank-owned foreclosures make up 34.2 percent of Spokane’s distressed real estate market. Finally, down 50 percent year-over-year, pre-foreclosures make up 8.3 percent of today’s market. With these numbers in mind, Spokane real estate investing will likely receive a number of its distressed properties from auctions.
Spokane real estate investing does not rely solely on foreclosures. In fact, investors have found some of their best gains in the most popular neighborhoods. Moreover, four out of the five most popular neighborhoods have seen listing prices increase on a weekly basis. According to Trulia, the most popular Spokane neighborhoods (zip codes) are as follows:
Northwest and Moran Prairie are the most popular, with respective listing prices of $146,806 and $373,076. Spokane real estate investing can really leave a positive impact in these areas. The whole Spokane region, for that matter, has a great looking forecast. Zillow expects home values to increase by as much as 3.5 percent over the next 12 months.
While Spokane may not be on the same level as Seattle, there is no doubting the progress that has been made in the city. Homes have rebounded from the recession and equity has returned to the market. For all intents and purposes, Spokane real estate investing should continue to thrive.
Spokane Real Estate Market Summary:
- Current Median Home Price: $176,900
- 1-Year Appreciation Rate: 3.5%
- Unemployment Rate: 7.6%
- 1-Year Job Growth Rate: 2%
- Population: 210,721
- Median Household Income: $47,485