Some real estate industry experts say rising interest rates are behind the market downturn across the commercial and residential real estate sectors in Spokane and Kootenai counties this year.
“Business is down about half of what it was in 2021 and even 2022…It was actually a record year for us,” said Dave Black, CEO of Spokane-based commercial brokerage firm NAI Black. says.
Commercial real estate activity during the pandemic has improved significantly due to strong industrial and investment markets, Black said, adding that the impact of interest rates will slow commercial activity in these and other markets in 2023.
The hospitality and retail real estate market has seen an increase in vacancies due to the closure of some restaurants and brick-and-mortar retailers.
Black said multifamily occupancy has remained steady at about 95%, down from a high of 99% during the pandemic to 100%.
He said multifamily occupancy is “at a more normal level right now.” “New projects are harder to rent than in the past, and rents have remained roughly flat.”
Black said he expects interest rates to trend slightly lower as the 2024 presidential election approaches, although it is unlikely they will fall significantly.
jared McFarland Coeur d’Alene Area Realtors Chairman of the Board says many: As people wait out the election year, he expects residential real estate will likely continue to slow in 2024.
McFarland, who is also an agent with Coeur d’Alene-based Century 21 Beutler & Associates, said the housing contraction gives homebuyers peace of mind.
“We had to slow down a little bit because it was an overhyped market with very low inventory and prices rising very quickly, so we had to pull back,” he says.
The market downturn has increased inventory levels, he said, resulting in fewer bidding wars, more bargaining power for buyers and improved purchasing terms.
However, if interest rates become even slightly more affordable, we can expect an influx of buyers due to pent-up demand. McFarland says.
Overall, McFarland said he expects residential real estate activity to be stable in the new year.
Patrick Jones, Executive Director According to the Institute for Public Policy and Economic Analysis at Eastern Washington University:Spokane Trend Home Price Index Shows Affordability is Declining Steadily Spokane County has had a score of 68.4 in the third quarter since 2018. An index of 100 or higher indicates that housing is more affordable.
“It’s pretty affordable for first-time homebuyers,” Jones says, noting the group’s index score of 51 in the third quarter.
TThe median single-family home price in Kootenai County in November was $525,000, down 4.5% from the November 2022 median price, according to information in the Coeur d’Alene Area Realtors Market Snapshot Report.
Year-to-date through November, 2,006 homes were sold in Kootenai County, down 17.6% from the same period last year. According to the snapshot, the number of active listings as of Dec. 5 increased by 3.6% year-on-year.
The median single-family home price in the Spokane area was $407,750 in November, an increase of 3.2% from the same month last year, according to Spokane Realtors’ latest home sales report.FloFrom January to November However, house prices fell by 2.1% compared to the same period last year.
In the Spokane area, 5,139 homes were sold from January to November, a decrease of 18.1% from the same period last year. The number of new listings in November totaled 562, an increase of 17.3% from the 479 new listings reported in November 2022.