Spokane Real Estate Market Shows Signs of Resilience Amid Challenging Conditions

The Spokane real estate market is demonstrating remarkable resilience in the face of challenging economic conditions. As of June 2024, the market witnessed a significant 9.1% increase in available homes compared to the previous month, with 1,480 properties on the market. This surge in inventory provides potential buyers with more options and could potentially ease some of the competitive pressure that has characterized the market in recent months.

Despite the increase in available homes, the Spokane market remains competitive, with 37.1% of properties selling above the asking price. This statistic underscores the continued demand for housing in the area, even as the average sale time has increased by 28% to 18 days. The extension in sale time, while still indicative of a brisk pace of transactions, suggests a slight cooling of the market that may benefit buyers who have been struggling to keep up with rapid sales.

Interest Rates and Market Dynamics

One of the most significant factors influencing the Spokane real estate market is the current interest rate environment. With the average rate for a 30-year mortgage term sitting at 7.28%, many potential buyers are facing increased borrowing costs. These high mortgage interest rates have had a cooling effect on the housing market both locally and nationally, contributing to a slight decrease in home values year over year in Spokane County.

The average Spokane County home value saw a minimal 0.72% decrease from $431,728 to $428,617 over the past year. While this represents a slight dip, it’s important to note that the Spokane housing market has generally exhibited a trend of modest appreciation over recent years. This resilience in the face of challenging economic conditions speaks to the underlying strength of the local real estate market.

Looking Ahead: Economic Factors and Market Uncertainty

Economists have dubbed 2024 as the year of the head fake, reflecting the slower-than-expected recovery in the housing market. This characterization underscores the complexity of the current economic landscape and the challenges in predicting market trends. Adding to this uncertainty is the recent settlement by the National Association of Realtors (NAR), which removes buyer agent compensation from Multiple Listing Services (MLSs). This change has created additional uncertainty, particularly for first-time and underserved buyers who may face new challenges in navigating the home buying process.

Looking ahead, the Federal Reserve’s policy decisions will play a crucial role in shaping the Spokane real estate market. The potential for rate cuts in 2024 could significantly influence mortgage interest rates and, by extension, the overall housing market. As these economic factors continue to evolve, both buyers and sellers in the Spokane area will need to stay informed and adaptable to navigate the changing real estate landscape successfully.