Spokane Real Estate Market Poised for Growth in 2024

The Spokane real estate market is showing signs of recovery as we move into 2024, according to recent forecasts from the National Association of Realtors (NAR). After a challenging year in 2023, where home sales dipped to levels reminiscent of 2008 or 1995, experts are predicting a more optimistic outlook for the coming year. This positive shift is expected to bring higher sales volumes and lower interest rates, potentially reinvigorating the local housing market.

Despite the overall decline in home sales during 2023, there have been some bright spots in the market. New home sales have seen a notable increase, rising by 4.5% and marking one of the best years since 2008. This growth in new construction is a positive indicator for the market’s recovery and may help address some of the inventory challenges that have persisted in recent years.

Rental Market Trends and Their Impact

The rental market has also been experiencing significant changes, with a notable increase in multi-family construction nationwide. This surge in apartment and condominium development is helping to ease rental increases, providing some relief for tenants. Private sector data indicates that rent increases have softened considerably, dropping to approximately 1%, a stark contrast to the official 6.8% reported by governmental data.

These shifts in the rental market are expected to have far-reaching effects on the broader economy. The softening of rent increases is likely to contribute to a lower Consumer Price Index (CPI), which could prompt the Federal Reserve to cut interest rates. Such a move would have significant implications for the housing market, potentially making homeownership more accessible for many prospective buyers.

Local Market Dynamics and Challenges

In Spokane County, the real estate landscape reflects both the challenges and opportunities present in the current market. As of November 2023, the median home price in the county stands at $407,400. This figure, while lower than the West Coast median of $560,000 (excluding large markets like Seattle and San Francisco), still represents a significant increase over the past few years. In fact, Washington State has seen a 43.8% increase in home prices over the last three years, a trend that has been even more pronounced in other Western states.

One of the primary challenges facing the Spokane market, and indeed many markets across the country, is the low inventory of homes for sale. Current inventory levels are about half of what was seen in 2017, creating a competitive environment for buyers, particularly in the entry-level housing segment. As interest rates potentially decrease in the coming year, more buyers are expected to qualify for entry-level housing, which could further intensify competition in this already tight market segment. Despite these challenges, the overall outlook for the Spokane real estate market in 2024 remains cautiously optimistic, with opportunities for growth and recovery on the horizon.