Business Barometer is a quarterly GSI publication that highlights significant economic indicators for the greater-Spokane region, as told by four local economists. The blog series contains eight posts; you’re reading post #4.
“Growth of consumer confidence is reflected not only in auto and consumer retail sales, but also in housing,” says Shaun O’L. Higgins, Managing Principal of The Oxalis Group LLC, and a longtime observer of the regional economy. “In the first quarter, for example, the community sold 207 more single-family dwellings than in the same quarter of 2014, a 27% increase.
The average selling price ($182,256) was up more than $7,500 from last year, a 4.2% increase, and the median price was up $10,000, a 6.3% increase. Again, early indicators show the second quarter is doing even better, with some homes selling within a day of their listing!”
“It’s great to see a strong growth rate,” says Steve Scranton, chief investment officer for Washington Trust Bank, “but I tend to be cautious when I see big numbers like this because this level of growth is not sustainable. I think the mild winter was probably a factor in these higher-than-average home sales in the first quarter. I’d much rather see a moderate, steady increase than a sudden surge.”
Avista Chief Economist Grant Forsyth characterizes it as, “a consistent story of recovery and increasing real estate activity. It is nowhere near the frantic pace leading up to the housing bubble, but instead is an orderly real estate market. The sharp drop in real estate sales and prices, thankfully, is now far behind us.”
Scranton says, “I think part of the reason for increased home prices is that Millennials, who have been putting off buying a home while they save up for a down payment, are buying before interest rates go up. This means increased competition, particularly for starter homes.”
Forsyth notes there are still many large apartment complexes being planned. He wonders when the market will become saturated and construction of these complexes will slow down.