Over the last seven years of my real estate career here in Spokane, I have witnessed the ebb and flow of the real estate market firsthand. In those seven years, I've guided more than 130 people in achieving their dreams of homeownership. Amid various challenges, Spokane, Washington, remains a desirable and sought-after destination for many looking to find their perfect home.
As we venture into 2024, let's explore the current state of the Spokane real estate market, reflect on the trends of 2023, and predict the trends we might see in the year ahead.
The statistics below represent the entire Spokane MLS, serving counties like Pend Oreille, Stevens, Spokane, Lincoln and Whitman.
Current State of the Spokane Real Estate Market
The Spokane real estate market is currently in a phase of calm, a typical prelude to the flurry of activity we usually see in February and March. Historically, December and January are slower months in terms of sales and average pricing. However, we often observe an upward trajectory in both metrics starting in February, peaking around June or July.
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Reflecting on 2023
In 2023, Spokane's real estate market saw a total of 9,239 new listings across various categories like Single Family Residences (SFR), Condos, and Manufactured Homes/Land. This number indicates a decline in listings since 2017, down 7.8% from the previous year.
The median sales price in 2023 was $420,000, a slight decrease from 2022's $430,000. This shift in pricing coincided with the peak of the market in May 2022, just before a steep increase in mortgage rates that led to a gradual drop in sales and prices. However, the market managed to recoup much of these losses throughout 2023.
Overall, 2023 ended up being better than anyone could have expected, considering the economy, affordability challenges, and high interest rates.
Overall, 2023 ended up being better than anyone expected!
Predictions for 2024
For 2024, I predict a modest improvement in the number of homes for sale. This change will likely stem from homeowners adjusting to the rate environment and the desire to make lifestyle changes. Despite the slight decline in 2023, I foresee modest price growth in the coming year.
Mortgage rates, a critical factor in the real estate market, showed a significant drop in December 2023, reaching around 6.6%, the lowest since April of that year. Industry experts, including the National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA), predict a gradual easing of rates. If the market's optimism holds, average rates could hover around 6% for the year.
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Changes in Regulations for Buyers and Sellers in Washington State
Starting January 1, 2024, residential real estate brokers in Washington are required to have a signed brokerage services agreement before providing services to consumers. The Brokerage Services Agreement is a contract between a Real Estate Broker and their client and legalizes the relationship between a buyer and the broker they've chosen to hire.
This agreement, which also details the services and fees, has been optional until now but will become mandatory for greater transparency and consumer protection.
In response to the Burnett Trial Verdict, Washington State will see changes to the listing agreement. Notably, sellers will no longer be required to provide compensation to the buyer's agent. This change aligns with national, state, and local level amendments, offering sellers more flexibility in handling agent compensations.
Hot Areas in the Inland Northwest Market
In 2023, certain areas in the Inland Northwest emerged as particularly sought after. Neighborhoods like Lincoln Heights, Rockwood, and Manito on the South Hill became hotspots, while the northside area saw neighborhoods like Garland and West Central gaining popularity. Notably, new construction neighborhoods were highly favored, as they typically come free of deferred maintenance issues and often include enticing financing or purchase incentives, making them a viable choice for many buyers.
In 2024, popular neighborhoods will continue to be those mentioned on the north and south sides of Spokane, but also:
- Cliff/Cannon Park
- Browne’s Addition
- Morningside in Spokane Valley
- Rocky Hill in Liberty Lake
Looking forward to 2024, it appears to be a promising year for both buyers and sellers in Spokane. My hope is we see some relief from the high mortgage rates that stifled buyers in 2023, creating more room for affordability.
Popular neighborhoods in 2024 will include Cliff/Cannon, Morningside in Spokane Valley, and Rocky Hill in Liberty Lake
With potential relief from high mortgage rates and continued challenges with low inventory, the market dynamics will likely foster competitive situations, especially during the peak spring market (March - June). Success for sellers will hinge on effective home preparation and pricing, while buyers should be preparing early and diligently tracking interest rates when it comes time to purchase to ensure they get locked in at the best rate possible.
2024 is poised to be an eventful year in Spokane’s real estate landscape, marked by regulatory changes and evolving market trends. As always, staying informed and adaptable will be key to navigating these changes successfully.
Working with a knowledgeable and experienced Realtor is also beneficial, so if you’re ready to start your home buying or sell journey, reach out to me here!