Stabilization of Spokane’s Real Estate Market Amid Foreclosure Concerns

After several years of sharp increases, and record numbers of foreclosures in the years following the pandemic, the average home price in Spokane County experienced a slight decline this year, marking the first decrease in over ten years and suggesting that the market may finally be stabilizing.

After a nearly $100,000 increase from 2021 to 2022 and a 2.4% increase from 2022 to 2023, this year the average home value across Spokane County dropped from $431,728 to $428,617—a modest decline of just 0.72%, but one that could signal a positive trend in Spokane’s housing market.

Homeowners have begun receiving property appraisal assessments for the 2025 fiscal year. These January 1 appraisals are generally lower than market prices and vary by neighborhood. According to an expert, an increase in appraised value does not necessarily translate into higher taxes. The tool provided on the county’s website allows you to calculate the value of your upcoming bills.

It’s important to note that in Spokane County, the majority of property taxes are primarily used to fund schools. Smaller portions go toward fire departments, towns, county government operations, and the maintenance of libraries, roads, and parks.

According to the same expert cited earlier, since the real estate market began recovering from the pandemic-induced lows, it has seen a slowdown due to high interest rates, and many people eager to buy a home are choosing to wait, hoping for better rates in the future.

When interest rates drop, it’s likely the housing market will surge, but that depends on the decisions of the Federal Reserve, which has refrained from making cuts due to nationwide inflation, which has recovered more slowly than expected.

Speaking of current figures, the average 30-year fixed mortgage rate was 7.01% on Monday, according to Bankrate, almost triple the record low of 2.65% in January 2021.

Although it varies by location, and despite a slight national slowdown in sales, we can see that home prices across the country tend to be stabilizing, indicating a gradual return to normalcy after the crises of 2020 and 2021.

Despite stable home values, many Spokane residents are still struggling to become first-time homeowners. Prices remain high, and interest rates exacerbate affordability issues, said Patrick Jones, executive director of the Institute for Public Policy and Economic Analysis at Eastern Washington University. It’s also important to note that wages have not risen at the same pace as housing prices, as Spokane’s wages remain below both the state and national averages.

Jones’ team uses the Housing Affordability Index from Washington’s Real Estate Research Center to assess regional housing affordability. The index measures the ability of a median-income family to afford a home with a 20% down payment and a 30-year fixed mortgage, assuming no more than 25% of income goes toward principal and interest.

It has been found that since 2020, median-income families in Spokane County have exceeded the 25% affordability threshold. First-time buyers, who are assumed to have lower incomes and seek cheaper homes, have not met this threshold since late 2017, though homes in Spokane County are slightly more affordable than the Washington state average.

Foreclosures Available:

Spokane: 150 homes available
Spokane Valley: 75 homes available
Cheney: 30 homes available

By Elias DaSilva | September 27, 2024