Spokane, WA Real Estate Market Trends & Analysis [Updated 2020]

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The Spokane real estate market has been disproportionately unaffected by the presence of the Coronavirus. To be clear, that’s not to say real estate in Spokane hasn’t experienced any setbacks due to the presence of COVID-19, but rather that the city seems to have fared particularly well over the first half of 2020. In particular, new listings and pending home sales appear to have avoided the nationwide downward trend in March and April. Activity has remained “stable,” which is largely being attributed to affordability, demand, and perhaps even the opening of a new Amazon fulfillment center which is expected to infuse the local economy with thousands of jobs. All things considered, the Spokane real estate market has thrived at a time when others have shuttered, and there’s nothing to suggest the trend won’t continue moving forward. Local buyers, sellers and investors could be in store for an active 2020.

Spokane Real Estate Market 2020 Overview

  • Median Home Value: $264,212

  • 1-Year Appreciation Rate: +13.1%

  • Median Home Value (1-Year Forecast): +1.4%

  • Median Rent Price: $1,295

  • Price-To-Rent Ratio: 17.00

  • Unemployment Rate: 15.8% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 522,798 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $54,852 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 7.40%

  • Foreclosure Rate: 1 in every 8,612 (1.1%)

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Spokane housing market

2020 Spokane Real Estate Investing

The Spokane real estate investing community may be in store for a more active spring than many markets across the country. If for nothing else, the local market has yet to be impacted by the quarantine on the same level as most other municipalities. Whereas many markets were essentially closed, Spokane managed to maintain housing momentum over the first half of 2020. As a result, real estate investors in Spokane have managed to thrive. Those who were selling in the first quarter, in particular, were rewarded with very attractive returns on investment (ROI).

Among 108 metropolitan statistical areas with at least 1,000 single-family home and condo sales in the first quarter of 2020, those in western states continued to reap the highest returns on investment, with concentrations on or near the west coast. Metro areas with the highest home seller ROIs were in San Jose, CA (81.8 percent); San Francisco, CA (67.7 percent); Seattle, WA (63.6 percent); Spokane, WA (61.8 percent) and Boise, ID (59.1 percent),” according to Attom Data Solutions.

It is worth noting, however, that years of appreciation have tilted the scales heavily in favor of long-term investing strategies. While it’s clear there’s still money to be made in the rehab market, there are three specific indicators catering to passive income investors:

  • Interest rates on traditional loans are historically low

  • Years of cash flow can easily justify today’s higher acquisition costs

  • The price-to-rent ratio suggests high home prices will increase rental demand

While rehabbing has been the most popular real estate exit strategy over the last decade, it may be time for investors to switch gears. Attractive profit margins are still available, but today’s market indicators look to favor buy-and-hold investors. Most notably, traditional borrowing costs are just about as low as they have ever been. As of April, the average rate on a 30-year fixed-rate loan was 3.31%, according to Freddie Mac. April marked the lowest average mortgage rate for an entire month ever. Consequently, mortgage rates are doing their best to bring down the cost basis of today’s properties, making them more affordable. Investors who take advantage of today’s mortgage rates could easily detract thousands of dollars from the overall cost of their purchase.

In addition to lower borrowing costs, the median rent price in the Spokane real estate market appears entirely capable of offsetting the average monthly mortgage expense. Several years of cash flow, in fact, can warrant an acquisition at today’s higher prices. With a median rent price of $1,295, many long-term investors should be able to pay down their mortgage using someone else’s money. In doing so, they will be building equity in a physical asset that has proven to appreciate more often than not.

Last, but certainly not least, the Spokane real estate investing community appears positioned to benefit from increasing demand. With a price-to-rent ratio of 17.00, rental property owners will find good rental demand since prices are relatively. With fewer people able to afford buying, more people will turn to renting. The demand (alone) should enable savvy investors to increase their cash flow in today’s market.

The Spokane real estate investing community is lucky to have a number of viable exit strategies at its disposal, but none appear more attractive than building a proper rental property portfolio at the moment. Too many important market indicators are pointing towards becoming a buy-and-hold investor to ignore.

2020 Foreclosure Statistics In Spokane

The Spokane real estate market has enjoyed a very healthy housing market for the better part of a decade. Recently, however, real estate in Spokane has begun to look stronger and stronger. In particular, an improving economy and confidence in the housing sector has significantly detracted from the city’s foreclosure rate. As recently as April, “the number of properties that received a foreclosure filing in Spokane, WA was 75% lower than the previous month and 81% lower than the same time last year,” according to RealyTrac.

Following the steep drop in foreclosures, only about one home in every 8,612 is distressed; that’s a foreclosure rate of about 1.1%. While low, however, Spokane does currently appear to be above the national average. To put things into perspective, one in every 9,569 homes across the United States is distressed.

Of the distressed homes in the Spokane real estate market, the majority are bank-owned assets. While down 66.7% year-over-year, bank-owned homes now make up about 57.1% of the city’s distressed inventory. As a result, the Spokane real estate investing community should consider speaking with their local banks to inquire about any potential deals. If for nothing else, going straight to the source may increase investors’ odds of landing a new deal at a discounted price.

Investors looking for distressed homes in the Spokane real estate market should prioritize the following neighborhoods, as they currently represent the areas with the highest distributions of foreclosures:

  • 99212: 1 in every 4,568

  • 99207: 1 in every 6,811

  • 99206: 1 in every 7,747

  • 99208: 1 in every 22,034

At the moment, the neighborhoods listed above have the highest distributions of distressed homes in the Spokane housing market. However, the presence of the Coronavirus is expected to change things. While it’s still too soon to tell how big of an impact COVID-19 will have on the market, there’s a good chance the number of foreclosures in Spokane will increase. Subsequently, there may be a spike in foreclosures once forbearance programs run their course. Therefore, those who position themselves well today and line up financing could find the latter half of 2020 to be a great time to acquire a deal.

2020 Median Home Prices In Spokane

The median home value in the Spokane real estate market is a very healthy $264,212. It is worth noting, however, that today’s price doesn’t tell the whole story. In fact, no more than eight years ago (June 2012) the median home value across the city was about $149,000. It was at that time home prices bottomed out during the Great Recession. Since then, however, real estate in Spokane has appreciated at an accelerated rate. In the eight years spanning June 2012 to today, the local median home value has increased 77.3%. The national average increased 53.6% over the same period of time.

The difference in appreciation may largely be attributed to the last year. Whereas the median home value in the United States increased 4.1% over the last 12 months, the Spokane real estate market saw its median home value increase 13.1%; that’s more than three times the national average. The significantly higher rate of appreciation in Spokane is likely due to the Amazon fulfillment center that is due to open. The facility is expected to bring thousands of jobs and opportunities, creating demand that has driven up prices at a historical pace.

Moving forward, the same momentum that has supported price appreciation in the past is expected to continue. While the country as a whole is expecting a modest 1.5% drop in median home values, Spokane is expected to remain the beneficiary of increases, to the tune of 1.4% over the next year.

Those who are looking to buy may view now as the perfect opportunity. Appreciation rates have tempered from last year because of the presence of the Coronavirus, but the trend doesn’t appear to be permanent. In fact, there’ a good chance increases will continue well into the future, as builders looking to increase inventory levels haven’t been working for several months. The lack of housing that has helped increase home prices for eight consecutive years is expected to continue, which will most likely push prices even higher.

Spokane Real Estate Market: 2016 Summary

  • Median Home Price: $209,500

  • 1-Year Appreciation Rate: 9.5%

  • 3-Year Appreciation Rate: 19.9%

  • Unemployment Rate: 6.5%

  • 1-Year Job Growth Rate: 2.2%

  • Population: 210,270

  • Median Household Income: $46,463

Spokane Real Estate Investing 2016

According to Spokane real estate news at the time, the housing sector was thriving in 2016. Home prices grew relative to the previous year, although never surpassed the national average. Appreciation rates skyrocketed, however, as gains in the previous three years extended the trend of positive price growth since the recession. Helping to support the growth of the Spokane housing market in 2016 was new housing construction, which vastly outpaced the national average, along with the local economy and home affordability.

The median home price was $209,500 during the second quarter of 2016, compared to the national average of $239,167. Although still below the rest of the country, home prices for Spokane real estate continued to grow relative to the previous year. The second quarter also saw surprising increases in appreciation rates. One-year appreciation rates for Spokane real estate were 9.5%, while three-year rates reached 19.9%, compared to one-year and three year rates of 4.9% and 17.8% achieved by the national average.

One factor helping the market during the second quarter was the local economy. Although unemployment was higher than the national average, reaching 6.5% compared to 4.9%, employment held up and was on an upward trend. One-year job growth was 2.2% during the second quarter, in comparison to the 1.9% witnessed by the national average.  When all was said and done, the city’s economy was in a better position than a majority of those across the country in 2016.

Spokane Real Estate Market: 2015 Summary

  • 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

Spokane Real Estate Investing 2015

The Spokane real estate market was the beneficiary of high appreciation rates in 2015. In one year’s time, median home prices actually increased 3.5%. Accordingly, median home prices reached $176,900 thanks to rapid appreciation. The national average, however, was about $31,000 higher, making Spokane relatively affordable for investors and homeowners alike. Despite appreciating at a rate slower than the national average, the city managed to pull itself out of a period of post-recession price weakness. Since then, trends have worked in favor of the eastern Washington city.

Spokane had strong fundamentals in place in 2015, though not as strong as its neighbor to the west: Seattle. Nonetheless, local employment growth continued its strong gains. At 2.0%, employment growth in Spokane was just over the national average. Fortunately, growth was on an upward trend, and continued to progress over the next year. Unemployment, on the other hand, was worse than the national average. At 7.6%, unemployment was weighing on the confidence of Spokane residents.

Affordability worked in favor of homeownership in Spokane. It was more feasible for younger Americans to own in Spokane than most other cities across the country. In fact, Spokane homeowners only spent about 10.0% of their monthly income on mortgage payments, whereas the national average was closer to 15.0%.

Spokane County Map:

Map of Spokane neighborhoods

Spokane Real Estate Market Summary

The Spokane real estate market may not have the reputation of its Washington counterpart Seattle, but the eastern city has enjoyed a great start to 2020. While most cities have downgraded forecasts, real estate in Spokane appears ready and willing to maintain the momentum it generated last year. Thanks largely, in part, to the opening of a new Amazon fulfillment center, Spokane is set to become the beneficiary of thousands of jobs, demand and economic activity. As a result, the Spokane real estate investing community may be able to view today as a great time to get their next deal, regardless of the intended exit strategy.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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