Spokane Real Estate Market Shows Signs of Cooling Amidst Rising Inventory

The Spokane real estate market is exhibiting signs of a cooling trend as we move into the second half of 2024. Home sales in June experienced a significant decline, dropping nearly 15% compared to the same period last year and 6% from May 2024. This downturn in sales activity marks a shift in the market dynamics that have dominated the region since the onset of the pandemic.

Despite the slowdown in transactions, the median home price in Spokane has continued to climb, albeit at a more modest pace. With a 1.5% increase, bringing the median price to $415,000, the market is showing resilience in the face of changing conditions. This modest price growth, coupled with a substantial increase in available inventory, suggests that the Spokane housing market is entering a new phase of its cycle.

Inventory Surge and Market Balance

One of the most notable changes in the Spokane real estate landscape is the surge in available homes. The inventory has increased by over 30%, with nearly 1,260 homes now listed for sale in the Spokane area, compared to 960 a year earlier. This influx of properties has expanded the supply to 2.4 months, a significant improvement from the 1.5-month supply observed last year.

While this increase in inventory is a positive sign for buyers who have been struggling with limited options, it’s important to note that the market is still far from balanced. Typically, a five to six-month supply is considered indicative of a balanced market. The current 2.4-month supply, although an improvement, continues to favor sellers to some extent.

Market Outlook and Influencing Factors

Looking at the broader picture, the Spokane real estate market appears to be at the beginning of a new cycle. After years of surging prices and constrained inventory during the pandemic, activity is now moderating. This shift is influenced by various factors, including higher mortgage rates and other inflationary pressures that are affecting affordability for potential buyers.

Despite the recent decline in sales activity, there’s reason for optimism in the Spokane market. Year-to-date sales figures show only a slight 1.4% decline compared to the first half of 2023, with a total of 2,700 homes changing hands. Surges in sales activity during February and April helped to offset decreases in other months. Looking ahead, the market is expected to continue with modest price growth and increased inventory, driven by factors such as economic growth, population influx, and relatively low mortgage rates compared to historical standards. As the market finds its new equilibrium, both buyers and sellers will need to adjust their strategies to navigate these evolving conditions.