Spokane Real Estate Market Shows Signs of Balance Amid High Interest Rates

As of July 21, 2024, the Spokane and Coeur d’Alene real estate markets are experiencing a gradual shift towards equilibrium, with housing inventory steadily increasing. Compared to June 2023, there has been a notable 31% rise in available homes, signaling a potential easing of the tight market conditions that have prevailed in recent years. This growth in inventory is bringing a welcome change for potential buyers who have faced limited options in the past.

Despite the increase in available homes, the median price in Spokane has remained relatively stable at $425,000, mirroring figures from the same period last year. This price stability, coupled with the expanding inventory, suggests a market that is finding its footing amidst changing economic conditions. As of the end of June, there were 1,253 homes on the market, a significant increase from the previous year, providing more choices for prospective buyers.

Interest Rates Continue to Shape Market Dynamics

The current interest rate, hovering around 7%, continues to play a pivotal role in shaping market dynamics. This elevated rate has led to a muted sales pace, with many potential buyers adopting a wait-and-see approach. The impact of these high rates is evident in the extended time homes are spending on the market. In the Lake City area, for instance, properties are averaging around 94 days before selling, indicating a slower sales pace compared to recent years.

These market conditions are prompting sellers to adjust their strategies. Many are finding it necessary to reassess their pricing expectations and invest in property improvements to attract buyers in this more competitive environment. This shift represents a significant change from the seller’s market that has dominated in recent years, where homes often sold quickly and above asking price.

Regional Variations and Future Outlook

While Spokane’s median home price has remained steady, neighboring Kootenai County has seen a slight increase. At the end of June, the median home price in Kootenai County stood at $527,000, representing a 1.8% increase over 2023. This variation highlights the importance of considering local market conditions when evaluating real estate trends.

Looking ahead, real estate professionals anticipate that interest rates and consumer confidence will continue to be key factors influencing the market. The upcoming presidential election and ongoing concerns about inflation are also expected to play roles in shaping market trends. As inventory levels return to those seen in 2017-2018, the market appears to be moving towards a more balanced state, offering opportunities for both buyers and sellers who are prepared to navigate these evolving conditions.