Spokane, WA Real Estate Market Trends & Analysis [Updated 2021]

Jump To Another Year In The Spokane Real Estate Market:

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 as the virus runs its course. In particular, new listings and pending home sales appear to have avoided the worst-case scenario. In addition, activity has remained “stable,” which is largely attributed to affordability, demand, and perhaps even the opening of a new Amazon fulfillment center that 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.

Spokane Real Estate Market 2021 Overview

  • Median Home Value: $315,967
  • 1-Year Appreciation Rate: +17.3%
  • Median Home Value (1-Year Forecast): N/A
  • Median Rent Price: $1,295
  • Price-To-Rent Ratio: 20.33
  • Unemployment Rate: 6.5% (latest estimate by the Bureau Of Labor Statistics)
  • Population: 522,798 (latest estimate by the U.S. Census Bureau)
  • Median Household Income: $56,904 (latest estimate by the U.S. Census Bureau)
  • Percentage Of Vacant Homes: 7.40%
  • Foreclosure Rate: 1 in every 11,197 (0.8%)

Spokane housing market

2021 Spokane Real Estate Investing

The Spokane real estate investing community may be in store for a more active 2021 than many markets across the country. If for nothing else, the local market wasn’t hit as hard by the pandemic as many of its national counterparts. Whereas many markets were essentially stagnated over the course of the last 12 months, Spokane managed to maintain housing momentum. As a result, real estate investors in Spokane have managed to thrive in the face of rapid appreciation.

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
  • Lower borrowing costs can increase monthly cash flow from operations
  • 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 3.06%, according to Freddie Mac. It is important to note that rates are up year-to-date, but they are nonetheless historically low. Consequently, mortgage rates are doing their best to bring down the cost basis of today’s properties. 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. In fact, monthly operating cash flow is a lot more attractive under today’s rates than in the past. 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 20.33, rental property owners will find good rental demand since prices are relatively high. With fewer people able to afford to buy, 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 several viable exit strategies at its disposal. Still, 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.

2021 Foreclosure Statistics In Spokane

The Spokane real estate market has enjoyed a very healthy housing market for the better part of a decade. 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 over the course of the last ten years. However, recent events have increased foreclosures. The pandemic, in particular, has served as enough of a financial obstacle for many homeowners to fall into foreclosure. Today, one in every 11,197 homes is in some stage of distress. At that rate, 0.8% of Spokane’s homes are distressed, which is in line with the national average.

Of the distressed homes in the Spokane real estate market, the majority are either up for auction or will be at some point soon. While down 88.0% year-over-year, auction homes now make up about 75.0% of the city’s distressed inventory. As a result, the Spokane real estate investing community should consider speaking with local auctions to inquire about 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:

  • 99204: 1 in every 4,187 homes is distressed
  • 99202: 1 in every 7,795 homes is distressed
  • 99207: 1 in every 13,622 homes is distressed
  • 99205: 1 in every 19,184 homes is distressed

Currently, the neighborhoods listed above have the highest distributions of distressed homes in the Spokane housing market. However, the lasting impact 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. However, those who position themselves well today and line up financing could find the latter half of 2021 to be a great time to acquire a deal.

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2021 Median Home Prices In Spokane

The median home value in the Spokane real estate market is a very healthy $315,967. It is worth noting, however, that today’s price doesn’t tell the whole story. In fact, approximately nine 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 time since then, the local median home value has increased 112.0%. The national average increased 69.7% 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 10.6% over the last 12 months, the Spokane real estate market saw its median home value increase 17.3%. Spokane’s significantly higher rate of appreciation 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 historic pace.

Moving forward, the same momentum that has supported price appreciation in the past is expected to continue. Those who are looking to buy may view now as the perfect opportunity. There is a good chance increases will continue well into the future, as builders looking to increase inventory levels haven’t been working for several months. In addition, the lack of housing that has helped increase home prices for nine consecutive years is expected to continue, which will most likely push prices even higher.

Spokane Real Estate Market: 2020 Summary

  • 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%)

Spokane Real Estate Investing 2020

The pandemic is responsible for producing the most prominent Spokane real estate market trends in 2020. Not unlike everywhere else, real estate in Spokane received a rude awakening once the impact of the Coronavirus on the real estate market was made apparent. In just a matter of weeks, activity came to a standstill. Underwriters at banks stayed home, creating a bottleneck in the loan process, owners took their listings off the market, and buyers refused to enter houses due to fear and uncertainty. All of the momentum 2019 managed to build was torn down by the start of the second quarter.

However, in an attempt to bring the market back up to speed, the Fed dropped interest rates to their lowest point ever. The move was intended to encourage buyers to get back in the market, and it worked. With rates well below three percent, buyers came out in droves and began to compete over the little inventory that was made available. Prices increased almost immediately, as sellers found themselves with multiple offers. Demand turned into feverish competition once interest rates were dropped, and the median home value in Spokane increased almost exponentially. From the moment the Fed dropped rates to the end of the year, the median home value increased 11.7%, easily outpacing the national average.

Price increases forced the Spokane real estate investing community to rethink its strategies. Whereas “flipping” once dominated the scene, increasing home values all but destroyed profit margins. As a result, investors turned to long-term strategies to take advantage of lower borrowing costs and avoid low profit margins. Rental properties, in particular, became commodities amongst real estate investors in Spokane. Attractive interest rates simultaneously offset higher prices and increased cash flow from operations. Additionally, rental demand was up in the face of a lack of inventory. All things considered, 2020 was a great year to be a landlord in the Spokane real estate market.

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. As a result, 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 compared 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 most 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, median home prices actually increased 3.5%. Accordingly, median home prices reached $176,900 thanks to rapid appreciation. However, the national average 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.

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