Spokane Attracts New Businesses with a Prosperous Real Estate Market
Spokane's real estate market is thriving, and not just the housing market–commercial real estate as well.
This past year hasn’t exactly encouraged new business opportunities or home relocation, but Washington’s Spokane seemingly has nothing to sweat over. Seattle’s cooler cousin, also known as Lilac City, has equally majestic parks and trails to keep people immersed in the outdoors, but at a sliver of the price. Seattle is 86.7% more expensive than Spokane, with housing costs 228% higher. Seattle’s claim to fame is their booming tech industry and in turn consistent real estate growth – both commercial and residential – but the Emerald City can take a seat as Spokane leads the way this year. Nearly 7.2% of Spokane’s workforce worked from home back in 2019 which is only expected to increase as working from home becomes more common. This allows a variety of new jobs for those living in Spokane and will likely attract more technology workers. As Cambria Henry, Haven Real Estate Group owner, shares, “Spokane could become a mini Seattle in coming years.”
The uncertainty of the housing market during 2020 was concerning for buyers and sellers alike, but overall held strong throughout the year. The president of Spokane Association of Realtors, Tom Clark, expressed, “It should have just brought the real estate market to a screeching halt. But it didn’t.” This past August, home sales were only down by 0.008% in Spokane, and experts see this city, along with similar others, at a large advantage considering the lower housing prices, mortgage rates, job creation, and proximity to more metropolitan areas with a suburban feel. In 2018, Spokane had the largest percentage of people relocating from West Coast areas – 23.8% – and is the third most appealing destination for West Coasters looking to move, following more commonly known Phoenix and Dallas. This out of state migration is likely to cause economic and labor force development.
While Spokane has seen their fair share of struggling businesses amidst COVID-19, the President of NAI Black Commercial Inc., Jeff Johnson, makes it clear that they have job creation and newcomers moving to the beloved city. A slew of new business owners have been fighting for a spot in the Lilac City, Johnson says.
Business owners are taking note of the growth and affordability of Spokane’s real estate market, as hubs such as Seattle continue to become clogged up with new corporations and in turn a more densely populated community which is not the most attractive characteristic these days. Over the past 6 months or so, Spokane has seen an array of new jobs from medical technology to new cafes.
When it comes to up and coming cities such as Spokane, commercial and residential real estate go hand in hand. With job creation comes homebuyers. The real issue has been the shortage of inventory paired with the high demand, which has been an issue in Spokane long before the pandemic. As of now, Clark says, “Folks are realizing, ‘Gee, I don’t have to live in downtown Seattle or other downtown metropolises. They think, ‘I can live a little bit more rural, I can have a little bit more of my social distancing, and I don’t have to go to the office nearly as often because COVID has taught me I can work remotely pretty darn effectively.'” Back in late summer, Johnson guessed that Spokane’s real estate market would finish 2020 strong, and he was spot on. Spokane made the list of NAR’s 10 markets that should perform well in a “post-pandemic environment”, considering the strength it showcased throughout 2020.
It comes as no surprise that the businesses who were hit the hardest in 2020 were crowded places that needed to be shut down for COVID related health and safety reasons, such as gyms, retailers, and restaurants. Johnson speaks warmly of the Spokane community and their drive to support cherished local businesses as well as its residents, which is reflected in their rental related covid relief programs. Spokane’s Eviction Rental Assistance Program (ERAP) aims to assist households that need financial help urgently before facing eviction. With rather minimal requirements, this program hopes to reach a great number of people in need.
The continuously extended date for eviction moratoriums in cities across the country caused a great deal of stress amongst renters and landlords alike. Since February of 2020, the state of Washington has had an eviction moratorium banning landlords from issuing evictions for any reason aside from criminal offenses or selling their property. The eviction moratorium is now extended through March 31, 2021, offering a sense of peace for renters, for now. Washington is working on a new bill, Senate Bill 5139, which would enact a six-month ban on rent increases once the eviction moratorium expires. This bill would also guarantee tenants 60 days notice of any rent increase and 30 days notice for those who live in subsidized housing. This assistance will not only help renters survive but also goes to show how important community assistance and mutual aid is to a neighborhood. Often, it’s more expensive to evict tenants and find new ones anyhow, so ideally landlords and renters can work together to find solutions to help them both. As state senator Mona Das expresses, “I think we need to give renters a little bit of time to breathe, to figure out next steps without worrying about whether they’re going to be priced out of where they live permanently or get evicted.”
The financial battle that the majority of the country is facing, heightened by the pandemic, has put a spotlight on the imbalance of jobs and housing. As of now, January 2021, 2.7 million mortgages are in forbearance according to mortgage data and technology company Black Knight. That’s 5.2% of mortgages.
As we finally enter 2021, experts are predicting yet another strong housing market – a silver lining on the cloud of 2020. Just as they saw this past year, there will be increased demand, especially from buyers who paused their hunt when the pandemic hit as well as those accepting their need for an ample home office as working from home becomes the new standard. Speaking of new standards, the ease and advances in technology when it comes to touring properties (and even purchasing them) virtually will only simplify the buying process from here on out.
In 2020, millennials were snatching up the majority of homes, making up 38% of home buyers. This may not be the case during this year if the median household income continues to increase. In 2019, the median household income for first-time home buyers was $68,703 and jumped t0 $80,000 in 2020. As for repeat buyers, it was $106,700. While a great deal of cities have seen homes fly off the market over asking price, it’s unsure if that will be the case in the near future.
These predictions and slight switch in the real estate market doesn’t necessarily mean the market will suffer or even slow down, the weight will just be more balanced between buyers and sellers. With the encouragement of new jobs and enterprises, newcomers will continue to fall in love with Spokane and everything it has to offer. The “mini Seattle” will attract both buyers looking to settle down and those looking to invest in an up and coming city.