Will Spokane property prices keep rising in 2022? This is what local brokers expect

Home buyers who have historically been handicapped by soaring Spokane house prices and bidding war after bidding war may give cause for optimism in the New Year.

While they can expect rising property prices, high demand, and low inventory, the housing market won’t be as hectic as it is in 2021, according to area brokers.

“Selling prices will continue to rise, but not as quickly as in 2021. I believe the reason for the rise is the lack of supply and demand will remain strong,” said Rob Higgins, executive officer of the Spokane Association of Realtors.

The average home price in Spokane County hit a record $ 395,000 in July. The median price for single-family homes sold in 2021 was $ 370,000, up 23.3% from the annual median of $ 300,000 for homes sold in 2020, according to data from the Spokane Association of Realtors.

“That is significant. In fact, this could be the highest average sales price increase we’ve ever seen, “Higgins said, referring to the percentage change from last year. “I think that will weaken a bit with a view to 2022, but the situation will be very similar – the demand is strong, the supply is low and that will drive up prices.”

Eric Johnson, former SAR President and Head of Training for Northwest Real Estate Brokers, agreed that the Spokane housing market won’t be as hectic as it is in 2021 due to the possibility of rising interest rates and the end of mortgage debt under the CARES Act.

The Federal Reserve indicated at a December meeting that it might consider hike rates earlier than expected. If mortgage rates rise, it could slow home price growth.

Freddie Mac said the interest rate on a 30-year fixed-rate mortgage rose from 3.11% the previous week to 3.22% in the first week of 2022 – the highest since May 2020.

Homebuyers nearing the end of mortgage deferral conditions could choose to put their homes in the market, which would result in a slight increase in the housing stock this year, Johnson said.

More than 47% of buyers across the country said they would feel more urgent about buying a home if mortgage rates rose above 3.5%, according to a report released Friday by Redfin, a Seattle-based technology-based real estate agent.

“Ideally, buyers will have more choices than they have in 2021 … difficult to guarantee, but market dynamics make it more likely this year,” said Johnson.

Johnson added that despite potential rate hikes, demand in the Spokane property market will remain strong this year.

“I assume this is a pretty healthy market with the same sales but probably not the same price increases as last year,” he said. “With our amenities, schools and leisure activities, we are still a very attractive place to live from a municipal point of view. I think we’re pretty attractive as a subway area to people moving here. “

The average Spokane County’s closed home price for homes less than 1 acre was $ 390,000 as of December, up 23.8% from the average price of $ 315,000 in December 2020, according to data from the Spokane Association of Realtors.

According to the National Association of Realtors, the national median existing home prices for all apartment types was $ 353,900 in November, up 13.9% from $ 310,800 in November 2020. December data is not yet available.

“Disruptions in the supply chain for new home construction and labor shortages have prevented more inventory from being brought to market,” NAR chief economist Lawrence Yun said in a statement. “This is why real estate prices continue to rise due to the almost record-low supply level.”

Spokane County had 224 homes in the market as of December, the equivalent of a 10-day inventory supply. That means it would take less than two weeks to sell all of the available homes. For comparison: In December 2020, the district had a portfolio of 236 properties on the market.

Spokane County’s housing stock hit a record low of nine days in February, according to SAR data. Higgins anticipates a slight increase in inventories this year.

“We’re starting the year with a 10-day supply so the change is not that big, but we expect we will see an increase in inventory,” he said. “People will use the equity they have built up – maybe retirees are downsizing, providing houses, or some want to take their equity and move into a different type of home.

“So there will be people who take advantage of that and bring their house to market.”

Higgins predicts that home sales in the Spokane area will grow 2% to 4% this year, with demand fueled mainly by senior millennials to buy homes and remote workers moving to the area.

According to a real estate market forecast from Real Estate Market.

Higgins predicts Spokane could see a slight return to seasonality in the real estate market in 2022. Typically, transactions and house prices rise in the summer, while activity typically slows down in the winter. This trend was absent in 2020 as the pandemic resulted in an increase in activity throughout the year.

However, last fall saw signs of cooling as fewer homes sold above list prices and stayed in the market longer.

Higgins said there are a number of variables that affect the seasonality of the market, including continued immigration of shoppers outside of the area and people choosing to stay in their homes longer.

During the pandemic, Spokane has attracted shoppers outside of the area, some of whom are retirees or remote workers who have left more expensive metropolitan areas like Seattle and San Francisco in search of more affordable homes with more space.

Zillow economists predict that teleworkers will continue to seek affordable midsize markets in 2022, and traditional bond markets are likely to see increased demand amid great resignation – the large number of Americans who were looking for jobs during the pandemic have given up better careers or better retirement.

Realtor.com predicts Spokane will be the third hottest housing market in the country this year, behind Salt Lake City and Boise, due to its relative affordability compared to larger West Coast subways, robust labor market, schools, and proximity to outdoor activities will.

“Remote workers are here to stay … I think some people are looking for a way out of the big cities,” Higgins said. “Although our median sales price is increasing dramatically, it is still significantly lower than in other cities.”