Spokane Real Estate Market
The Spokane real estate market continues to be driven by inventory. We continue to see new listings getting multiple offers the first weekend they appear on the market.
Active listings are lagging 6% behind last year with only 1,335 properties on the market compared to 1,422 a year ago. Of the 764 homes that sold in June, the median time from listing to pending status was 19 days and most of them were under contract in around a week.
Even with the high demand, home sales in Spokane] County are down 17.2% compared to last year, this because of the low inventory. As you would expect in a market driven by supply and demand, housing prices continue to be on the increase.
At $289,308 the average sales price is up 7.9% over June a year ago when it was $268,039. The median price had a similar increase of 8.2% with the median priced home selling for $265,000 this June compared to $245,000 a year ago.
With so many eager buyers, even 1,335 homes on the market seems like a lot. That’s because most of this number is represented by overpriced homes that have been on the market for a while. The homes that are ready to sell and priced correctly, sell very quickly and aren’t on the market long while the overpriced homes continue to affect these statistics month after month.
In the past when a home has been on the market for about a month with no offers, it was time for the seller to consider a price reduction. That month is now a week. If a home has been on the market for more than week with quite a few showings but no offers, there is either an issue with the price or condition.
Is this an absolute? Should a well-priced home be under contract in one week? For a home in the median price range within the city limits of Spokane or Spokane Valley; Yes, this is pretty much an absolute.
Some markets just won’t move as quickly as others. Higher end homes and homes that are further out of town tend to take longer to sell. An 8,000 square foot luxury home in Elk will probably not be under contract in a week but well maintained 3 bedroom 2 bath rancher in the Valley should.
What does it mean to price your home correctly in a market like this? First off, look at the sold comparables. If you want your home to be on the market for a while, look at the prices of homes that have been on the market for a while. If you want to sell your home, look at what homes are selling for.
Look at your home from the perspective of a buyer. Be honest. Is it in good condition? Does it need updating? Then try to price your home as close to actual market value as you can without pricing it over market value. In this market, pricing a little low is safer than pricing a little high.
If the market value of a home is $265,000 and you price it at $260,000 you will likely get $270,000 but if you price the same home at $270,000 you will likely get $260,000. Clearly, this is a subjective statement but it is based on experience. The only way to truly determine value is with a willing seller and a qualified buyer when a sale is complete.
When a seller mistakenly prices their home a little high, buyers generally will not come in with a low offers right away. After the home has been on the market for a while, a buyer may bring a low offer. The resulting negotiation will likely result in a contract below the asking price.
For the many frustrated Spokane home buyers, when will this feeding frenzy of multiple offers end? As the inventory builds and the summer buying season slows down the market will start to normalize. The graphs on this page illustrate a seasonal market that slows down as summer nears fall. We can expect to see a decrease in both market activity and price.
Overpriced homes will either get price reductions or they will be taken off the market. Not all sellers have to sell, so many will take their homes off the market. There are many sellers who have had changes in life circumstances who really do need to sell their homes. Many of these homes have been on the market for an extended period of time and buyers have lost interest in them.
As sellers reduce the prices on these homes with the selling season coming to an end they still may be priced a little high because of the normal seasonal trends in the market. In other words, they will be chasing down the market with their price reductions. Because of this phenomenon, September and October can bring some good values.