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

As of July 25, 2024, the Spokane real estate market is exhibiting signs of stabilization, with housing inventory slowly growing in both Spokane and Coeur d’Alene. This shift indicates a move towards a more balanced market, providing a glimmer of hope for potential homebuyers. Despite the challenges posed by high interest rates, the median price of a home in Spokane has remained steady at $425,000, reflecting the market’s resilience in the face of economic pressures.

One of the most encouraging developments is the significant increase in housing inventory. The number of homes on the market has surged by 31% compared to the previous year, offering a wider range of options for prospective buyers. This growth in inventory is a positive step towards what realtors consider the gold standard – a six-month supply of homes on the market. However, Spokane currently has a 2.4-month supply, indicating there’s still room for improvement in achieving a fully balanced market.

Interest Rates Continue to Shape Market Dynamics

Despite the increase in inventory, the sales pace in Spokane remains muted, primarily due to the persistently high interest rates. The national mortgage rate continues to hover around 7%, significantly impacting affordability for many potential buyers. This high-interest environment is causing buyers to hesitate, leading to a slower sales pace and forcing sellers to adjust their expectations.

The impact of these high rates is evident in the market dynamics, with sellers often needing to make improvements to their properties to secure full asking prices. This situation underscores the importance of presenting homes in the best possible condition to attract buyers in a more competitive market.

Regional Variations and Future Outlook

While Spokane grapples with these challenges, the nearby market of Coeur d’Alene presents a slightly different picture. The median home price in Coeur d’Alene was reported at $527,000, marking a 1.8% increase over 2023. However, homes in this market are averaging 94 days on the market before selling, indicating a slower pace of transactions.

Looking ahead, mortgage rates are expected to remain high for the foreseeable future, continuing to impact housing affordability across the region. This persistent high-interest environment suggests that the current market conditions may become the new normal for some time, requiring both buyers and sellers to adapt to these challenging circumstances. As the market continues to evolve, close monitoring of inventory levels, pricing trends, and interest rates will be crucial for all stakeholders in the Spokane and Coeur d’Alene real estate markets.