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Trials and Tribulations of a Booming Real Estate Market

Article By: Pia Hallenberg, featuring Eric Johnson
Owner, Content by Pia

It is not just the summer weather that has been unseasonably hot – the Spokane real estate market followed right along. Homes stayed on the market for just a few days, and almost every buyer has a story of the teeth-gnashing bidding war they had to endure before they got the keys.

“I’d say we’re about 30,000 housing units off in Spokane,” said Eric Johnson, president of Spokane Association of Realtors and director of training for Northwest Real Estate Brokers. “How did it get this bad? It’s a hangover from the recession. To catch up we would have to produce at least 1,800 units a year, and we did 500.”

Spokane’s housing challenges began long before the pandemic hit, and as the recession lifted Johnson said “everyone” wanted to buy a home.

“We didn’t have the labor pool to build,” Johnson said, “and when the pandemic hit it didn’t shut down demand as expected. In times of crisis, people seek to meet their basic needs and housing is just one of those needs.”

Swelling demand for housing was also brought on by an influx of people moving to Spokane at a higher rate than in previous years. Remote workers, recently released from the confines of an office by the pandemic, are seeking away from the big metro areas, looking for a quality of life that can be found here.

“It’s a great market for real estate investors who specialize in coming in and buying things up,” Johnson said. “Guys like me should be super happy. But at the same time, I care deeply about people, and we want to solve this housing issue.”

Like others, Johnson expects that some downtown office space will remain vacant. The same goes for retail space.

“There is likely to be more vacant commercial property into fall,” Johnson said. “And there are chances that some of those downtown buildings could be repurposed. We have to be very mindful of how we use those spaces.”

To solve the housing challenges there is only one way forward: build more.

Johnson said he hopes the city will work with developers and builders on streamlining permitting and rezoning some areas, to make construction easier.

“Infill development is all we can do right now and that may not be enough,” Johnson said, adding that perhaps declaring a housing crisis could allow some changes on a state level with the growth management act. “It can be very difficult to impact change on a state level.”

When Mayor Nadine Woodward proclaimed a housing emergency in late July, Johnson welcomed the proposed changes as a step in the right direction.

“Allowing four housing units per lot in the city is pretty aggressive, but it’s important to remember that there are still building codes, parking requirements and services that need to be present for it to be feasible,” Johnson said about one change that would allow for higher density in residential neighborhoods.

Johnson added that he doesn’t think the mayor’s proclamation will lead to “massive changes” but it may increase the number of rentals or condominium offerings which will give Spokanites more choices when it comes to housing.

“It opens the doors for accessory dwelling units as well as re-development of dilapidated homes and that may incentivize replacement with multi-unit residences,” Johnson said.

Overall, Johnson is optimistic about the future, and he is not worried that the market will implode like it did around the dot.com crisis.

“Real estate follows employment,” Johnson said. “As employment gets stronger, we will still be pretty bullish going forward. And the market will stabilize.”

Eric Johnson, President of Spokane Association of Realtors.

Thank you to our partner for this project, The Spokane Journal of Business. View the full GSI Connect Magazine here.

Thank you to Rogue Heart Media for capturing the image featured in this story!

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