Positive Trends in Real Estate

Written By Marie Pence

With so much negative media attention surrounding the country’s housing market, it is necessary to educate consumers in Spokane about Washington’s amazing housing market. Washington State’s housing market is one of the strongest and most stable in the nation. The foreclosure rates are the same today as they were ten years ago, and less than one percent of all mortgages in Washington end in default. Sub-prime mortgages (which tend to be at greatest risk of defaulting) accounted for about 20% of home loans nationally whereas only 6% of Washington mortgages were sub-prime. Home appreciation in Washington continues to out-perform the rest of the nation with year to year price increases since 1995.

According to Forbes Magazine, prices in Washington State have increased over 9% since the same time last year with Spokane increasing 10.4%. Many counties however, have experienced much higher hikes like Chelan 29.8%, Okanogan 24.5%, Douglas 22.2%, and Lewis County at 19.3%. Spokane also ranked 9th in median home price appreciation of over 150 metropolitan areas surveyed by the National Association of Realtors. Over the next few months, existing home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors.

It is projected that Spokane’s home prices will increase 2-4 % this year with roughly 7000 homes selling in the area. Washington’s housing market is not keeping pace with the growth of the states population, which is continuing to increase at 1.8% per year. It is estimated that the states population will increase by nearly one million over the next decade and reach approximately 6.8 million by 2010.

About two-thirds of the growth is due to inmigration; the rest is a result of the growth of families already living here. Spokane County led Washington in job growth last year, creating almost 10,000 new jobs. Steady job and population growth in the region could help isolate the area from problems plaguing the national scene. The area’s job base is both stable and diverse, benefiting from expanded health care opportunities, high tech manufacturing, and a boom in construction and development. Spokane was also recently listed by Forbes Magazine as the 20th best place to do business in the nation.

Looking at the housing market graphically over the past 25 yrs, it is evident there are periods when conditions make it the perfect time to buy a home. The numbers show the housing market typically has a 6-7 year boom followed by less than a two year decline. The decline represents an ideal opportunity to buy because homes can be purchased at a premium value. This also allows more bargaining power, creating many ideal options for consumers. With low interest rates and a healthy supply of homes to choose from, it has become an ideal buyer and investor market.

Equity, income and good credit are necessary to get the most favorable terms for a mortgage, it is important to know how low interest rates are at this time. There is now a greater flexibility and broader range of mortgage products so qualified buyers can get great deals. Jumbo loans have jumped to $417,000.00 and above allowing conventional loan rates to remain at low interest rates although the industry has returned to more prudent underwriting and scrutiny. The current 30 year mortgage interest rates are 5.75% and the 15 year fixed rates are at 5.5%. (Rates quoted January 12, 2008.) Many lenders are feeling that the rates may still get even lower and even if you are not thinking about buying a home at this time, it’s a great time to refinance.

Last year with the slight downturn of Inland Northwest home construction and home sales, it likely translates into mixed news for would-be home buyers: Consumers may find fewer new homes for sale, but they might capitalize on favorable mortgage rates and increased negotiating power as more existing properties sit on the market. Builders are being more cautious and construction this year will likely be filling the demand for affordable housing. More new apartments and duplexes are going to be built due to vacancy rates of rental living being about 3 percent. Many first time buyers are expected to rent longer and wait to qualify for loans due to the sub-prime mortgage crisis. This can be a positive, preventing unqualified buyers from running into trouble later.

It is important to share these facts with our community and we must correct the perception that our real estate market is falling apart before perception becomes a reality.

I was born and raised in Spokane and would never move away from the area. After spending 9 yrs in City Government I changed careers and began selling Real Estate for Coldwell Banker Northwest Group last September. My real passion in Real Estate started over 5 yrs ago when my husband and I began purchasing several rental properties in the Spokane area and managing them as a side business. We are also working on expanding our family at this time while building our dream home in Northeast Spokane. I have two daughters, Payten, 12, (going on 16) and Morgan, 9, keep me grounded and yet, crazy busy.