2021 Buyer/Seller Guide

SPECIAL SECTION

W E D N E S D AY, A P R I L 2 8 , 2 0 2 1

SPOKANE AREA’S HOT SPRING HOUSING MARKET

INSIDE

NOW OR LATER?

IT’S TOUGH OUT THERE

COVID CHANGES THINGS

BIDDING WAR SURVIVAL

Difficulty finding the right home may have you thinking about building new, but today’s reality means deciding if it’s worth the wait. Build or buy – both have pluses and minuses.

As prime buying season gets underway, those searching for a home will find few houses on the market and plenty of competition when it comes offer time.

Buyers are wanting more – more square feet, more space indoors and more room outdoors – and sellers are adapting. Find out what to expect from the market.

Transplants looking for affordability, mobility and livability are arriving with cash in hand. One home, several buyers, escalating offers. How do you win the battle?

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E2 • Wednesday • April 28, 2021

Special Section

BUYERS GUIDE

BUY OR BUILD?

Market observers say both have advantages and disadvantages

By Amy Edelen

THE SPOKESMAN-REVIEW

As inventory of existing single-family properties in the Spokane area’s competitive housing market has dipped to record-low levels, more buyers are considering the option to build their own homes.

“There’s a gigantic influx of people wanting to build new homes due to lack of existing homes,” said Corey Condron, CEO and owner of Spokane-based homebuilding company Condron Homes. “We are seeing a very high percentage of out-of-area buyers and they are coming from the I-5 corridor.”

Building a new home gives buyers from Washington’s West Side and others the ability to customize their budget, features and amenities, Condron said.

“You don’t have to settle. Your budget is all you have to settle on. You get what you want, and get to pick out all the colors and amenities,” Condron said.

“That’s a big advantage of building a new home.”

Condron said maintenance expenses are typically lower for new construction, compared with existing homes that could require more upkeep.

“You are getting a brand-new home. You are 20 years down the road before you are looking at major expenses,” he said.

New construction provides buyers with an array of options, but the homebuilding process brings its own set of challenges, such as increasing costs for land,

JESSE TINSLEY/THE SPOKESMAN-REVIEW

Airway Heights is experiencing an explosion of housing development. More buyers are considering building on their own properties rather than purchasing existing homes in Spokane’s hot housing market. lumber and labor.

Framing lumber prices have jumped more than 200% since April 2020, causing the average price of a new single-family home to increase by more than $24,000, according to the National Association of Home Builders.

“We are also up against a very slim inventory of land to build on … that’s another factor constricting us,” Condron said.

Homebuilders are wait-listing clients for new construction

because of extended building times caused by a shortage of skilled labor and the pandemic’s impact on supply chains, Condron said, adding his company is transparent with buyers about building time frames.

The nationwide median sales price of new houses sold in February was $349,400, according to data from the National Association of Home Builders.

March data was not available at deadline for this story.

Although building a new

home takes longer than purchasing an existing home, buyers may be able to avoid bidding wars occurring in the existing single-family home market, Condron said.

“If you can find new construction, there’s a chance you won’t be competing with as many people. The downside is you have to wait to get your home built,” Condron said, adding the homebuilding process can take more than a year.

While it could be beneficial

for some buyers to build their own homes, it might make more financial sense to purchase an existing home for others.

The median closing price for single-family homes on less than 1 acre was $341,750 in March, according to data from the Spokane Association of Realtors.

“Existing homes are typically going to be a little bit less money per square foot,” said Eric Johnson, president of the Spokane Association of Realtors. “A lot of times with buying an existing home, you have the landscaping included. The window coverings are there. There tends to be more things included in a resale home versus new construction.”

Installation of fencing and landscaping could potentially add 5% to 10% to the cost of a new home, Johnson added.

A key benefit of purchasing an existing home is buyers can close on the property within 30 to 60 days, compared with waiting for more than a year to build and move into a new home, Johnson said.

Condron encourages buyers to research both options to figure out whether building a new home or purchasing an existing property is right for them.

“It doesn’t hurt to test the waters and see what’s out there,” Condron said. “New construction will always be there. If you find an existing home, great. If you don’t, take the step to see if you can build.”

Amy Edelen can be reached at (509) 459-5581 or at amye@ spokesman.com.

“It doesn’t hurt to test the waters and see what’s out there. New construction will always be there.

If you find an existing home, great. If you don’t, take the step to see if you can build.”

Corey Condron CEO and owner of Spokane-based Condron Homes

Special Section

April 28, 2021 • Wednesday • E3

BUYERS GUIDE

Buyers can find a home with persistence Spokane area’s homebuying season kicks off amid few available properties often attracting multiple offers

By Amy Edelen

THE SPOKESMAN-REVIEW

When Bethany and Caleb Alcamo began their home search in Spokane, the couple knew they wanted a property in a nice neighborhood with space to raise their family.

But they didn’t anticipate their search would span nearly three years.

The first-time homebuyers submitted dozens of offers on properties but were outbid repeatedly, prompting the couple to put their search on hold a couple of times before entering the market again this year.

“We’ve been renting a house for the last year and a half. Our family is still growing and we want to own our own place,” Bethany Alcamo said in early April. “We decided to start looking again. We’ve put in a couple of offers. We’re hopeful we can get something.”

The Alcamos are among several homebuyers facing intense competition in the hot housing market in Spokane, which is an area that has gained nationwide recognition for its quality of life, proximity to outdoor activities and relative affordability when compared with larger West Coast metro areas, such as Seattle and Los Angeles.

The rise of remote work during the coronavirus pandemic has further accelerated the trend of out-of-area buyers fleeing larger cities for midsize metros.

Realtors expect demand will continue to outpace the number of properties on the market during Spokane’s spring homebuying season, which is typically one of the busiest times of the year in real estate.

“I can’t imagine we’re going to experience a spring market that’s currently hotter than what we are in,” said Tom Clark, a broker with Kestell Co. Realtors and governmental affairs committee

chair for the Spokane Association of Realtors. “We are very restricted by the amount of inventory that we have.”

Spokane County’s median closing price soared to its highest level in history last month at $341,750, a 17.9% increase over $289,900 in March 2020, according to data from the Spokane Association of Realtors. The median closing price was $325,000 in February.

Housing inventory in the county dropped to 209 properties in March, representing an 11-day supply of homes on the market. That means it would take 11 days to sell all available homes on the market. By comparison, the county had 592 homes on the market in March 2020.

Also in March, Realtor.com named Spokane the 10th-hottest housing market in the nation based on how fast homes are selling and how many page views each listing received on the Realtor.com website.

The national median existing home sales price was $313,000 in February, up 15.8% from $270,400 in February 2020, according to the National Association of Realtors. March data has not yet been released.

Buyers are competing against 10 to 12 offers and many are writing escalation clauses into their offer, allowing them to incrementally increase the amount they are willing to pay to avoid getting outbid, Clark said.

“There are more cash offers.

Most of those are people coming in from outside the area,” Clark said. “We’re also seeing buyers getting more creative with their offers.”

There’s an uptick in the number of buyers including appraisal gap addendums in their offers that specify they will pay the difference between a lender’s appraisal on the home and the asking price.

Clark encourages elected offi-

COLIN MULVANY/THE SPOKESMAN-REVIEW

Bethany and Caleb Alcamo speak with Realtor Tom Clark, center, in the house they are purchasing on the North Side. As with many properties on the market this spring, the seller received multiple offers.

SPOKANE COUNTY’S MEDIAN HOME CLOSING PRICE

$341,750

$269,900

2020 April

May

June

July

Aug.

2021 Sept.

Source: Spokane Association of Realtors

Oct.

Nov.

Dec.

Jan.

Feb.

March

MOLLY QUINN/THE SPOKESMAN-REVIEW

cials to come up with solutions to reduce barriers to home ownership by addressing the county’s housing supply issue, which is

attributed to a variety of factors, including a shortage of new construction following the Great Recession.

The lack of supply issue is further compounded by skyrocketing prices for land, lumber and materials, in addition to new impact fees resulting from the state’s new energy code that could add $10,000 to $15,000 to the cost of an entry-level home, Clark added.

Although Spokane’s housing market is challenging for buyers, it’s a bright spot for sellers, said Jodi Mouchett, Spokane-based broker with John L. Scott Real Estate.

“Right now, if you are a seller, you are making good money. The asking price is kind of a starting point. It’s not really what it’s going to end at,” she said. “Sellers are cashing in on some well-deserved equity. Buyers are struggling. They are paying more for the house than the list price. It’s a tougher market for buyers, but it’s not completely impossible.”

Because homes are fetching thousands over asking price, it may provide an opportunity for sellers looking to move up in the See SEASON, 7

E4 • Wednesday • April 28, 2021

Special Section

BUYERS GUIDE

Spokane, Coeur d’Alene among nation’s hottest markets

By Amy Edelen

THE SPOKESMAN-REVIEW

After Realtor Chad Oakland listed a home on the market earlier this year for clients moving from Coeur d’Alene to Colorado, the property had eight showings scheduled by 10 a.m. for the following day.

“In 30 years of selling, I’ve never seen a market like this,” said Oakland, who is also co-owner of Coeur d’Alene-based Northwest Realty Group.

The secret has been out for

years about the Spokane area’s quality of life and affordability compared with larger metro areas and proximity to outdoor activities.

Now, Coeur d’Alene also is gaining national attention.

Real estate website Realtor. com recently named Spokane the 10th-hottest housing market in March. Coeur d’Alene was ranked the 16th hottest last month after ranking in the top 10 the previous month.

Both cities were evaluated on how fast homes are selling and

how many page views listings received on Realtor.com’s website.

Manchester-Nashua, New Hampshire, was deemed the top housing market in March.

“Around the country, smaller outlying markets continued to rise in the rankings in March.

While affordability tends to be a factor in driving homebuyer demand, the hottest markets saw median listing prices 18.9% higher, on average, than the national price in March,” Realtor.com’s hottest housing market report said. “This may reflect a willing-

ness of buyers to pursue pricier homes as they aim to lock in favorable mortgage rates, which have been increasing lately and are projected to keep climbing.”

The report indicated homes in Spokane remained on the market for a median 19 days. Homes in Coeur d’Alene were on the market for a median 23 days.

The median list price in Spokane was $435,000 in Spokane and $799,000 in Coeur d’Alene, according to Realtor.com.

Those numbers differ from the Coeur d’Alene and Spokane Mul-

tiple Listing Service data cited by local real estate agents because they likely don’t categorize sales by acreage or if they are waterfront properties.

In Spokane County, the median closed sales price for single-family homes and condos on less than 1 acre was $341,750 in March, a 17.9% increase from $289,900 in March 2020, according to data from the Spokane Association of Realtors.

Oakland, who recently opened See HOT, 7

WATERFRONT WITHIN REACH

COURTESY PHOTOS

This three-bedroom, three-bathroom home in the Nine Mile area sits on 4.97 acres and was priced at $900,000 this month.

Willingness to go a bit farther afield can get positive results

By Nina Culver

FOR THE SPOKESMAN-REVIEW

A tight housing market has led to higher prices and more competition for available homes, a trend that has carried over to waterfront homes.

But experts say there’s still a way for people to achieve their dream of having a lake home as long as they are willing to make a few concessions.

Bill Fanning, a Realtor with Century 21 Waterfront, recommends that people avoid popular lakes like Coeur d’Alene, Hayden and Pend Oreille and instead look at properties on smaller, less well-known lakes.

“I’d like to believe that anyone can own waterfront today, but it depends a lot on where you go,” he said.

Another option to consider is a secondary waterfront property. The home itself isn’t right on the beach, but it will have a good view of the water. The property should also come with deeded beach access and a boat slip, Fanning said.

“The price drops considerably,” he said.

Waterfront properties on some sections of the Pend Oreille River and on the shores of the smaller lakes north of Spokane are good options, Fanning said. People should also consider Lake Roosevelt, the Columbia River by Kettle Falls, Deep Lake by Colville and Kelso Lake.

“There’s lots of small bodies of water with great recreational opportunities,” he said. “They’re out there.”

The catch is that people have to be willing to drive to get to their new property. Most waterfront homes located close to larger cities like Spokane and Coeur d’Alene as well as amenities like restau-

This two-bedroom, two-bathroom home was available on the shore of Medical Lake for $399,900. rants and grocery stores will have a higher price tag than those that require more than a 45-minute drive to get to, Fanning said.

Greg Rowley, a Realtor and luxury property specialist with Coldwell Banker Schneidmiller Realty, agrees with Fanning.

“What makes the waterfront search so hard in North Idaho is that affordable properties are further out,” he said. “Maybe look a little further.”

At the same time, the less-expensive

waterfront homes won’t be fancy, Rowley said. “Most of those are modest homes in more remote locations.”

Though picking a property on a smaller lake or river that’s farther away will lower the price, buying a waterfront property still won’t be cheap. Like everything else in real estate, the prices have gone up, Fanning said.

“The waterfront market tends to parallel the local residential market,” Fanning said.

“It’s probably gone up a good 25 to 30%.

We’ve seen a big spike from August of last year to the present. The reason is the inventory has dropped dramatically.”

This month, a two-bedroom, two-bathroom home was available on the shore of Medical Lake at 119 N. Jefferson Street for $399,900. Part of the reason for the affordable price is that the home was built in 1895. A higher-priced, more modern home was available at 11321 N. Nine Mile Road. Perched just above the water, the three-bedroom, three-bathroom home sits on 4.97 acres and was priced at $900,000.

The reason for the reduced inventory is that people appear to be holding onto their properties in the hopes of riding the wave of increasing prices to its peak so they can get the most profit, Fanning said.

The area is also a retirement destination and appears to be drawing in people from other markets, he said.

The Spokane-Coeur d’Alene area is blessed because it’s easy to get to.

“We have clean water, low crime,” Fanning said. “We have a four-season climate.”

Rowley said he’s seeing a lot of buyers from Seattle and California.

“They don’t bat an eye at our prices here,” he said.

Those people are buying up waterfront homes as well as traditional homes, cutting into inventory and driving up prices.

“The bottom end of our market has virtually disappeared,” Rowley said. “First-time homebuyers are being priced out of the market. There’s literally more Realtors in North Idaho than there are homes available.”

The purchasing strategy is the same for a waterfront home as it is for a home in a neighborhood cul-de-sac.

“A buyer needs to be ready and willing to pay full price or more,” Rowley said.

Special Section

April 28, 2021 • Wednesday • E5

BUYERS GUIDE HOME FEATURES COVID-19 has changed the home features people want, according to the 2020 Market Recovery Survey.

In general, have your clients changed what home features are important in a new home due to COVID-19? (Check all that apply.)

No, the search criteria is about the same

65% 24%

Home office Space to accommodate family (older adult relative, baby, pet)

15%

Larger size house for more personal space

13%

Yard for growing fruit/vegetables

11%

Yard for exercise

8%

Broadband internet access

8%

Bigger kitchen

8%

Acreage

8%

Swimming pool

8%

Safe place for packages/ doorman to accept packages

3%

Other

4%

Source: National Association of Realtors

Pandemic impact alters what homebuyers look for in a property Larger houses sought to accommodate requirements for work, study from home

By Amy Edelen

THE SPOKESMAN-REVIEW

When the coronavirus took hold in the nation last year, it prompted shifts in buyers’ homebuying and selling preferences.

Buyers began prioritizing affordable, midsized cities over larger metro areas.

They sought homes with more square footage as statewide stay-at-home orders forced many to work from home and attend school online.

People also desired more space for home gyms, yards to grow food and chef-friendly kitchens, according to the National Realtors Association’s 2020 Profile of Home Buyers and Sellers.

“The coronavirus without a doubt led home buyers to reassess their housing situations and even reconsider home sizes and destinations,” Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors, said in a statement.

The pandemic has caused home purchases to spike among those renting an apartment or house. More than 45% of homebuyers after April 2020 were previously renters, compared with 36% prior to the pandemic, according to the NAR. Spokane became a popular relocation choice during the pandemic for out-of-area buyers searching for a better quality of life and outdoor activities.

“They are looking for homes close to recreation or on land,” said Kaya Kennedy, broker with Kelley Right Real Estate Spokane. ” I’m seeing a lot of people moving from bigger cities to escape the crowds, and a lot of people are requesting fiber (internet) because they are working from home more.”

The report indicated downsizing has become less popular. Eighteen percent of sellers who sold their home after March 2020 reported the main reason for putting their property on the market was because “it felt too small,” compared to 13% of consumers who sold homes prior to the pandemic.

Buyers’ interest in multigenerational homes increased during the pandemic for a variety of reasons, including cost savings, desire to spend more time with aging parents and relatives, and the need to accommodate delayed independence of children.

They also indicated buying a multigenerational home allowed them to pool multiple incomes to purchase a larger property, according to the NAR survey.

“It’s getting to where people are looking for four to five bedrooms, and I’m seeing where they want family to come over or even live with them because of the situation with affordability and more people out-of-work (during the pandemic),” Kennedy said.

COVID-19 also has changed how people buy homes, with a new emphasis on incorporating technology into the process as they researched, viewed photos and took virtual tours from their computers and smartphones.

The NAR study found 97% of buyers searched for their home online –

an increase from 93% in 2019. Buyers spent eight weeks looking for a home last year, marking the shortest amount of time people spent searching for properties since 2007, according to the NAR. EXIT Real Estate Professionals broker Laura Branning said she’s conducted several video tours via FaceTime for out-of-area clients, some of whom purchased a home in the Spokane area sight unseen.

“We did a half-hour long video tour.

We looked at every nook and cranny of the home,” she said. “I did that for a number of clients and made sure I was there when they got the keys to the house.”

Branning echoed that buyers are placing more emphasis on larger homes with room for home gyms or for guests or family members coming to live with them because of aging or work-related situations.

Properties with views of nature also have become more important as homes turned into multipurpose spaces during the pandemic, she added.

“There has been a paradigm shift of ‘it’s not just a place to rest your head,’” she said.

Changes affect sellers

Sellers also are approaching the listing process differently during the pandemic.

To prevent the spread of COVID-19, property showings, inspections and appraisals are limited to 10 people on-site and by appointment only for counties in Phase 3 of the state’s Healthy Washington – Roadmap to Recovery plan.

Because of strong buyer demand, some listing agents are scheduling viewing appointments in 15-minute increments, said Ken Sax, managing broker for Professional Realty Services.

“That’s not enough time because that’s rushing buyers into making a decision,” Sax said. “We’re trying to get listing agents to allow more time for buyers and even second showings because we want a buyer to be comfortable and certain in their decision.”

Sax said there’s been an increase in what he calls a “flub rate” – or number of contract terminations – as buyers are rapidly submitting offers in the area’s competitive market.

Sax says sellers should verify buyers’ funding before going under contract and carefully evaluate the first offer on the home before accepting it.

“Our flub rate is higher right now and that’s due to buyers’ remorse because they are pulling the trigger so fast,” he said. “If I’m a seller, I may not necessarily want to take the first offer because that’s not going to help me if I go back on the market in two weeks.”

Sax also thinks virtual meetings with buyers and sellers via Zoom and other platforms are here to stay.

“The funny thing is we’ve always had Zoom and it’s so efficient … now that we use it daily – sometimes all day – it makes me think what else do we have currently that would help us?,” Sax said.

Amy Edelen can be reached at (509) 4595581 or at amye@spokesman.com.

E6 • Wednesday • April 28, 2021

Special Section

BUYERS GUIDE “We are seeing multiple offers on pretty much everything. We have so many buyers that don’t have that cash to put down, so it’s important to find other ways that are as successful as cash.”

Rachel Wilson Spokane-based Redfin agent

JESSE TINSLEY/THE SPOKESMAN-REVIEW

Rachel Wilson, a Spokane agent with Redfin real estate, stands near one of her company’s listings in a row of townhomes in the Kendall Yards development near downtown Spokane on April 14.

Cash, creativity key to landing home Tapping into sellers’ emotions and expectations can enhance your offer in a bidding war

By Amy Edelen

THE SPOKESMAN-REVIEW

With battles for homes leading to a sharp increase in bidding wars in Spokane’s fiercely competitive real estate market, buyers are finding they need to be creative with the offer for the

home of their dreams.

Seattle-based real estate technology company Redfin found nearly 64% of single-family home offers written by their agents nationwide in March faced multiple bidders.

The company indicated in a study that prospective homebuy-

ers who offer cash nearly quadruple their chances of winning a bidding war, making it the most effective strategy to come out on top in a competitive situation.

For buyers who may not have the option to pay cash for homes, it’s essential to work with an agent who can help make their

offers more attractive – sometimes it’s increasing the down payment, waiving contingencies or figuring out what sellers want, Spokane-based Redfin agent Rachel Wilson said.

“We are seeing multiple offers on pretty much everything. We have so many buyers that don’t

have that cash to put down, so it’s important to find other ways that are as successful as cash,” Wilson said. “I had one (instance) where we didn’t compete with other offers, but otherwise we’re up against one to 30 possibly, deSee BIDDING, 7

Special Section

April 28, 2021 • Wednesday • E7

BUYERS GUIDE HOT

Realtor Michelle Mendez sits April 14 in a home considered to be a fixer-upper in north Spokane she recently sold.

Mendez is a licensed agent with Keller Williams, but works with the Lee Arnold Team.

Continued from 4

LIBBY KAMROWSKI/ THE SPOKESMAN-REVIEW

AN ENDANGERED SPECIES

Traditional fixer-uppers a rarity in current market

By Thomas Clouse

THE SPOKESMAN-REVIEW

One of the first things Spokane-area home buyers tell real estate broker Bryan Crabbe is that they are searching for a deal.

Once a market littered with homes with potential, also known as fixer-uppers, the Spokane market’s current lack of inventory has redefined what many would consider a find, said Crabbe, who works with Five Star Real Estate Group.

“The first statement I hear out of all of them: They are looking for a deal under market value,” Crabbe said. But “that market value is a different thing than it was a year ago. Even the dregs of the home market are going for asking price and over.”

Just 10 years ago, former Spokane City Councilman Rob Higgins said about 20% of Spokane homes sold for less than $100,000. Currently, only 0.6% sell under that mark.

Higgins, executive vice president of Spokane Association of Realtors, said that new benchmark for a “fixer-upper” now probably sells for $150,000 to $200,000.

The higher prices have reduced the list of affordable homes for first-time buyers, who often don’t have as much money to put down as

BIDDING

Continued from 6 pending on the house.”

Wilson said clients should set aside some cash as a cushion in case they must increase their bid and look at listings that have been on the market for a while.

In the past, a “stale listing” in Spokane would have been a home on the market for about a month, but now it’s a property that didn’t sell within the first weekend of listing, Wilson said.

“Homes that don’t sell on first weekend – those are huge if you keep an eye on them,” she said, adding she encourages buyers to save listings and revisit them midweek to see if they are still active.

In the instance in which Wilson’s clients weren’t up against competing offers, photos in the listing were dimly lit and the home had green carpet.

“Come to find out, the seller was taking out the carpet and installed hardwood floors, so the buyer ended up with a good house,” she said.

Considering rural listings is also a great option – if broadband internet is available, she added.

“In addition to that, I try to plan out offers accordingly,” she said. “‘What can we do to make it more strong and appealing to sellers? I like to reach out to agents before making an offer to see if there’s anything important (that) sellers want.

“Some just really want

SEASON

Continued from 3 market, Clark said.

“If you sell in this market, chances are you are going to have some available cash when you go to buy,” Clark said. “Sellers think they can’t sell because there’s nothing for them to buy.

It’s not true that you won’t find a home if you sell … most sellers in today’s market would be very qualified buyers. Cash-in-hand buy-

speculative buyers, or previous home owners, who have money left over from the sale of their previous houses, Crabbe said.

“You have the first-time buyers who are willing to consider a home they wouldn’t normally consider. But, the price has gone up so much, that’s all they can afford,” Crabbe said. “They are competing with people who are downsizing or people who are looking to fix-and-flip or fixand-rent them out.

“So, you have this large group of people shopping for the same pool of homes,” he said.

Some 90% of the business that Michelle Mendez does are homes her company purchases and then resells.

Mendez, the director of operations for the Lee Arnold Team, which is licensed with Keller Williams, said her company buys fixer-uppers and then remarkets them.

“We buy homes directly from sellers who might have probate issues, tax issues or code enforcement issues,” she said. “We work with them to help them sell their homes and get cash quick.”

In the past, Mendez would focus on those things that buyers tend to look for, which include upgraded kitchens and bathrooms, to ensure they would sell for a higher. price But right now, homes are moving regardless of the upgrades.

“We used to do granite counter tops, gut the kitchen, gut the bathroom and put in wood floors,” Mendez said. “Now it’s like, ‘That carpet looks pretty good. Let’s clean it.’ People just

someone who will love and cherish the home like they did. I had one couple that beat out two other offers because they had the intention to close and loved the property.”

Jodi Mouchett, a Spokane-based broker for John L. Scott Real Estate, had clients who were up against more than two dozen offers for a home in the Garland District in the $350,000 price range. Her clients’ offer was approved as a backup offer because they agreed to an appraisal gap addendum.

In an appraisal gap addendum – also known as a Form 22AD – buyers agree to pay the difference between a lender’s appraised value of the property and the offer price.

“Buyers are having to be a little more creative with offers by not asking for things from sellers and limiting contingencies as far as financing goes,” Mouchett said. “If you can put down more, it makes you a stronger buyer … if it’s a financed purchase, we are seeing more of the 22AD when the appraisal comes in low.

In the last year, (a Form 22AD) has become more common, but in the past three to six months, it’s become a necessity.”

The second-most effective bidding strategy is to waive the financing contingency, boosting buyers’ odds of winning by 66%, according to Redfin. A financing contingency is a clause in a real estate contract that specifies that a buyer’s offer is dependent on financing approval for the home.

It’s important to note, however, there is risk involved with waiving the financing contingency. If the lender doesn’t approve the mortgage loan for the asking price, buyers have to either make up the difference in cash or lose their earnest money deposit if they walk away from the deal.

Other strategies that buyers can use to make an offer more competitive are to waive inspection or appraisal contingencies, or include an escalation clause, which allows them to increase their suggested purchase price incrementally to avoid getting outbid for homes.

In a fast-paced market like Spokane, communication is imperative between lenders and agents, Mouchett said.

Mouchett said buyers should work with agents who keep in contact with the listing agent to inquire what sellers are looking for in an offer, among other things.

Wilson echoes that an appraisal gap addendum is “huge on the contract side of things” because it helps buyers remain competitive.

Most of all, Wilson advises buyers to be patient when encountering a bidding wars on homes.

“It gets less difficult every single time, and when you do win one, it’s an awesome celebration,” she said. “We are seeing multiple offers on pretty much everything. We have so many buyers that don’t have that cash to put down, so it’s important to find other ways that are as successful as cash.”

ers – they can compete a lot in this market.”

Clark advises buyers to work with an experienced Realtor who can help position them to write the best possible offer.

From her homebuying experience, Bethany Alcamo suggests buyers do their research on lenders, mortgage rates and Realtors. She also advises buyers to check property listings every day.

The Alcamos ended their three-year home search

this month. The couple’s offer was accepted on an 1,800-square-foot rancher on a half-acre lot. They are currently going through the closing process.

“Stick with it and eventually something will come along,” Bethany Alcamo said. “It’s just a timing game and waiting game.

It will happen when it’s meant to happen.”

Amy Edelen can be reached at (509) 459-5581 or at amye@spokesman.com.

want something that is clean and livable.”

The market has become so tight that Mendez often must agree to rent the homes back to the seller for six months so that they can find another home to purchase, she said.

“That’s our biggest stumbling block, is people who are reluctant to sell their house because they don’t have a place to go,” Mendez said.

The popularity of television shows about refurbishing homes makes many of the old improvements moot, she said.

“What we have found is that the buyer doesn’t necessarily like what we have chosen,” she said. “They want to fix it up themselves.”

But buyers must also consider the hidden costs of trying to make that fixer-upper into the home of their dreams, Crabbe said.

“They are not for everybody. It has to be the right person,” he said. “There is going to be work that needs to go into it. They need to consider those costs as part of the purchase price.”

An added problem is that lumber prices have recently skyrocketed to new highs. And, because so many homes are under construction, homeowners may have difficulty finding contractors with time to consider home improvement projects.

“If they are relying on subcontractors, most are tied up with jobs for bigger contracts,” Crabbe said. “You can get into a home for a fair price, but it if sits there for four months unoccupied, you still are paying taxes, utilities and mortgage.”

an office in Sandpoint in response to the growing real estate demand in North Idaho, said the ability to work remotely and access to outdoor activities during statewide stay-home orders accelerated an influx of out-of-state buyers moving to the area.

“It was different for us on lockdown,” he said, referring to stayhome orders that occurred as the pandemic took hold nationwide a year ago. “We were still able get out and walk Centennial Trail, but imagine if you are in a big city and you are in lockdown. You really can’t go anywhere.”

Although Coeur d’Alene’s housing market is gaining national attention, it’s a “Catch-22” for local buyers and sellers, Oakland said.

“It’s definitely sad for a lot of local people because if you are making out-of-area money, it goes a lot further,” he said. “I hear frustration with buyers when talking to them, and all you can do is empathize with them. It’s tough to people trying to compete.”

At one point last month, Spokane County had 209 homes on the market, representing an 11-day supply, meaning it would take eleven days to sell all available homes. A balanced housing market typically contains six months of supply.

“It’s like the ‘Hunger Games’ for buyers.

Our inventory is still so minimal, which makes us see multiple offers,” Sax said. “Buyers are becoming greater risk-takers after they lose out on a handful of homes.

This article, originally published in the Spokesman-Review on March 28, has been updated and condensedfor purposes here.

E8 • Wednesday • April 28, 2021

Special Section

BUYERS GUIDE

Slow condo price growth may help first-timers

By Zach Wichter BANKRATE.COM

The data firm reports that single-family home prices grew by 12.3% on average in 2020 – the highest appreciation rate since 1992 – but condos aren’t gaining as quickly. This could be an opportunity, especially for first-time homebuyers, in a market that is starved for inventory and where bidding wars are commonplace in many areas.

What’s going on with condo pricing?

Condo pricing was soft in 2020, according to Andy Walden, vice president of market research at Black Knight.

“What we’re seeing right now is an extremely hot housing market, but it’s really being driven primarily by single-family residences,” he said. Although single-family prices rose by 12.3% last year on average, condo prices only increased by about 6.4%.

“That in and of itself is interesting, but when you take a 30-year look at the housing market, the way the housing market typically works is that when the housing market is hot you tend to see condos outpace single-families,” Walden said. “Given how hot the housing market is right now, you’d expect condos to outpace single-families, but they’re running at roughly half that rate.”

He said he suspects that the trend is mostly driven by people leaving the densest parts of cities for areas where they can buy properties with a little more space.

Single-family homes were especially popular in 2020 as people sought extra rooms and ditched their commutes.

“Folks that lived in those urban areas or worked in those urban areas have maybe seen a dislocation or a change in lifestyle because of the COVID pandemic,” Walden said. “Now maybe they want a home office or things of that nature, so you’re seeing a broader change in dynamic in the market as a whole.”

Why does it matter?

Condo prices are often on the extreme ends of the market, according to Walden: higher when the market is high, and lower when the market is low, so it’s rare for condo prices to diverge from the rest of the market the way they’re doing now.

“There’s really dueling forces putting pressure up on home prices right now.

It’s record-low interest rates that we saw last year and there’s lack of supply out there in the market, which has worsened in the single-family space over the

Condos aren’t for everyone, but can be a great way to experience homeownership without all of the upkeep from a single-family home.

TRIBUNE NEWS SERVICE

last couple of months,” he said. “Both of those things are putting upward pressure on prices in the single-family space. In the condo space, it’s a little bit less pressure on the side of inventory, so we can kind of narrow it down and isolate the interest rate impact a little bit more and maybe glean some upcoming inflection points about the single-family market based on what we’re seeing in condos.”

The housing shortage is not a new issue, but a hot market has intensified its impact this year, and there’s little hope the trend will reverse in the near term. However, condos are generally more available than single-family homes given current real estate trends, so that’s part of what is driving the pricing disparity.

“Supply/demand imbalance is noticeably different in condos versus single-families; I think you’re going to see that throughout at least 2021. That’s really the big question in the market right now.

Where do you see that inflow of inventory coming from?” Walden said.

“One of the potentials was that distressed inventory sitting out there in the market because of forbearance plan extensions, that’s not likely to come if at all until late 2021, early 2022. The other potential inflow was missed listings from last year and the natural rebound in new

listing volumes this year, we haven’t seen that yet,” he added. “In fact, we’re seeing new listing volumes down for this year.

We haven’t seen the answer start to show itself yet in terms of where that inventory is going to come from.”

In some especially competitive housing markets, condo prices are trending even lower than the national average.

According to Black Knight’s data, single-family home prices in San Francisco were up 11% year-over-year, but condo prices were actually down. Meanwhile, in nearby San Jose, single-family home prices were again up by around 11%, but condo prices only rose about 2% yearover-year.

“There’s five key markets: San Francisco, San Jose, New York, Boston and Seattle where you’re all seeing single-families appreciate 9 to 10% faster than condos,” Walden said

Can first-time homebuyers benefit from this trend?

First-time homebuyers always stand to benefit when any segment of the housing market shows relative affordability.

First-timers are also usually more likely to be interested in condos to begin with. But are first-time buyers still following that trend during the pandemic?

The relatively soft prices “may suggest

that they’re not as interested in urban areas as they have been in the past. It could potentially be an opportunity for some of those homebuyers,” Walden said. “For some of the folks that are out there who are really struggling and looking at inventory or finding homes for sale, you may see first-time homebuyers stretch back into that condo space depending on what happens with single-family residences inventory levels this year.”

With high housing competition this spring, first-time buyers are likely to need any advantages they can get to close the deal. Check out Bankrate’s tips for firsttime homebuyers if you’re not sure where to start.

Bottom line

Condo prices aren’t rising as quickly as single-family home prices in the current real estate market, which highlights changing property preferences among buyers and could present opportunities for prospective first-timers who are still comfortable living in dense urban areas.

It may be too early to say if the condo pricing trend portends any other shifts in the real estate market, but one thing is certain: Competition for housing will remain high at virtually every price point this spring.

SPECIAL SECTION

W E D N E S D AY, A P R I L 2 8 , 2 0 2 1

SPOKANE AREA’S HOT SPRING HOUSING MARKET

INSIDE

VALUE PROPOSITION

NOW MAY BE THE TIME

CENTER STAGE

RUSHING TO SELL HIGH?

Equity is a magic word in real estate, and building it is a homeowner’s goldmine.

It’s money in the bank at closing – and so are key home improvements and upkeep.

Local observers have never seen a market so weighted toward sellers like the current one, a perfect storm driven by unimaginably low inventory and ever-growing demand.

There’s little doubt a home put on the Spokane-area market will sell within days, but helping buyers see themselves in your home will impact how much they are willing to pay.

Talk of a second housing bubble has homeowners weighing whether to sell and buyers waiting for prices to drop. But this isn’t history repeating itself.

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T2 • Wednesday • April 28, 2021

Special Section

SELLERS GUJIDE “... Having a home will pay off in the long run. Reach as far as you can. Live like a pauper if you can.

In 10 years, you will turn around and say, ‘Man, I’m glad I did that.’”

Rob Higgins Executive vice president of the Spokane Association of Realtors

THE NEST EGG OF EQUITY Homeowners who push limit on what they can afford may reap solid payoff later

By Thomas Clouse

THE SPOKESMAN-REVIEW

For most Americans, the biggest investment they make in their lifetimes is buying the place they call home.

Except for only a few historical exceptions, the value of a standard home only increases over time. That’s why longtime Realtor Rob Higgins always coaches those shopping for houses to buy as much home as they can afford so they can eventually take advantage of its value or equity.

“Even if you have to do some work on them, having a home will pay off in the long run,” said Higgins, who is the executive vice president of the Spokane Association of Realtors. “Reach as far as you can. Live like a pauper if you can. In 10 years, you will turn around and say, ‘Man, I’m glad I did that.’ ” While it sounds obvious, simply paying the mortgage on time begins the process to equity growth, said Greg Deckard, chairman and CEO of State Bank Northwest.

Otherwise, homeowners can do a number of things to build equity faster. One is paying just a bit more every month, such as rounding up the mortgage payment a couple hundred dollars, he said. Every little bit pays the house off faster, which reduces the amount of interest paid over the life of the mortgage.

“One of the tried and true ways is to refinance your house to the lowest rate you can,” Deckard

said. “If you make two-half payments a month, the mortgage goes down faster.”

The other no-brainer advice Deckard had was to make sure the house stays in good working order.

“Obviously, keep it in good condition and show a pride of ownership,” he said.

Michelle Mendez, the director of operations for the Lee Arnold Team, which specializes in selling fixer-uppers, agreed. She said the main value of the home is tied to the big-ticket items, especially when it comes time to sell.

“Make sure the roof and (heating, ventilation and air conditioning) system is good, and not any problems with the plumbing,” Mendez said. “Those are the things I would really worry about because paint and carpet are really easy to fix down the road.”

Bryan Crabbe, with Five Star Real Estate Group, said some sellers clean the carpet, splash some fresh paint on the walls and call it good.

“That’s all well and good,” he said. “The best projects I’ve seen are those people who put a little more effort into it. They fix everything to the nth degree … so the next buyer doesn’t have to fix something.”

The difference in selling price could be everything from an offer below list price to a bidding war, he said.

“Everybody knows that kitchens and bathrooms really are what sells a house,” Crabbe said.

“Make sure they are in good con-

LIBBY KAMROWSKI/ THE SPOKESMAN-REVIEW

Realtor Michelle Mendez says the largest value items of a home are big ticket items, such as the roof and heating-and-cooling system. dition. Comfortable is a very big part, too. Make sure the yard is presentable so the next buyer can come along and see the value in what they are buying.”

Homeowners looking for major upgrades to an existing home will find difficulty finding available contractors, who are stretched thin during the current housing boom, he said.

“Everybody has a budget. Their budget doesn’t expand generally as much as the housing market is at the moment,” he said. “Income doesn’t rise 10% or more a year.

But, housing is outpacing that because of the lack of inventory.”

Mendez said one of the advantages of buying an older home is that homeowners get a chance to reshape it in their image.

“You can make that house the home you dreamed of versus moving into someone else’s dream,” she said. “Yeah, new construction is fantastic. But I think the older homes have better bones.”

Joel White, executive director of the Spokane Home Builders Association, agreed with Mendez that communities like Spokane have vast untapped potential with many older, existing homes.

“I see that as a big future of Spokane, which has an aging housing stock,” he said. “As housing prices go up, you will see investors and private individuals upgrading their homes. Certain pockets will struggle. But as owners take pride in their neighborhood and start to rebuild, that’s

going to be a real positive.

White saw that transformation in downtown Vancouver, Washington, when he lived there.

People tired of living in Portland began investing in older homes in Vancouver and reshaped it.

“You hit momentum in your neighborhood when a lot of people are doing it,” he said. In Vancouver “it was a dynamic improvement to a downtrodden area.”

With home values in Spokane seeing percentage increases in the double digits, existing homeowners have seen home values skyrocket. David Flood, chief loan officer for STCU, cautioned homeowners about trying to cash See EQUITY, 7

Special Section

April 28, 2021 • Wednesday • T3

SELLERS GUIDE

TYLER TJOMSLAND/THE SPOKESMAN-REVIEW

Two out of four vacant lots are marked “sold” on April 20 at the intersection West Lyons Court and North Conestoga Street in northwest Spokane.

The lots sold within days of being put on the market.

Surging prices, bidding wars: Area market leaves real estate veterans flabbergasted Spokane currently facing perfect storm with supply, demand benefiting sellers

By Thomas Clouse

THE SPOKESMAN-REVIEW

Rob Higgins has been selling homes in Spokane for 36 years.

He’s worked through booms, stagnations, slips, dips and backslides.

But, Higgins said he’s never

seen a seller’s market like the current state of affairs in the Spokane region.

Higgins, the executive vice president of the Spokane Association of Realtors, noted the median price of a Spokane home had climbed to $341,000 in March.

“I didn’t think they would ever

go to this price,” Higgins said. “It wasn’t that long ago that the median price was $150,000. It’s like, I’m in a fog.”

The low supply of homes has pushed prices higher for whatever homes come onto the market.

It’s the opposite of a buyer’s market, where prospective buyers can choose and potentially offer less money than the asking price because so many homes are for sale, he said.

“I’ve been doing this since

1985. We used to say that the normal market is four months worth of inventory,” Higgins said.

He explained that the inventory time frame is how long it would take to sell all the homes currently available on the market.

“Today it’s 11 days,” Higgins said. “That’s the lowest number I have ever seen. That’s hard to even wrap your head around.”

The low inventory has created a feast-or-famine situation for

real estate agents, he said.

“If you have a listing, it’s going to sell,” Higgins said. “But if you are a buyer’s agent, you’ve got a tough job. You’ll be working seven days a week to present offers to buyers. They are being rejected because there are so many buyers.”

Higgins said he did a random sample of homes that sold in the $350,000-$400,000 range in See SELLERS, 7

T4 • Wednesday • April 28, 2021

Special Section

SELLERS GUIDE

Staging helps potential buyers visualize home’s potential Properly done, it increases offers and sale price while reducing number of days on the market

By Amy Edelen

THE SPOKESMAN-REVIEW

In Spokane’s real estate market, it’s not a question of if a home will sell – but for how much.

And home staging plays a big part in what buyers are willing to pay for properties, according to a recent survey by the National Association of Realtors.

Some 23% percent of

real estate agents indicated in the survey that home staging raised the amount offered from 1% to 5% over list price, compared with homes on the market that had not been staged.

About 18% of agents surveyed said staging could increase the price above asking by 6% to 10%.

Staging maximizes a property’s appeal by allowing potential buyers to

Amy Barragan, owner of Affordable Home Staging, adds decor to a home on South Helena Street in Spokane on April 12. Her father and employee, Jim Guest, is in the background.

visualize it as their future home, said Amy Barragan, owner of Spokane-based Affordable Home Staging.

“I’ll tell sellers their house could sell vacant, but if they can get enough people to come to the home because it looks good online, they have a way higher chance of bids going higher and higher,” See STAGING, 8

DAN PELLE/THE SPOKESMAN-REVIEW

“Some homes that had been on the market for years upon years sold last year. There’s not a lot left.”

Realtor Greg Rowley

LUXURY NOT IMMUNE TO MARKET LIMITATIONS

COURTESY PHOTOS

The 12,808-square-foot home on Covey Run Lane in the Ridge at Hangman community was listed at $3.8 million earlier this month. The 12,808-square-foot home has six bedrooms, nine bathrooms and six fireplaces and sits on almost 9 acres.

Two lake properties in North Idaho are steepest in area, at $27 million

By Nina Culver

FOR THE SPOKESMAN-REVIEW

The luxury home market in Spokane and North Idaho is following some of the same trends as other housing segments in the area – inventory is down and homes are selling faster than usual.

Fast is a relative term, however.

With a limited pool of buyers that can afford homes priced north of $5 million, the homes are spending weeks or months on the market instead of years.

What was considered a luxury home is changing, too. High-priced properties used to be waterfront homes and ranches, said Rob Orth, Tomlinson Sotheby’s International Realty president. But now traditional family homes are increasingly cracking the $1 million mark.

“The prices from two years ago have basically doubled,” Orth said.

“What used to be a $500,000 home is now a million-dollar home. There’s now million-dollar homes on the See LUXURY, 5

The asking price for the Copper Rock Estate at Mica Bay on Lake Coeur d’Alene, one of its balcony decks pictured above, at right, was $27 million earlier this month. The main home of 9,000 square feet comes with 30 acres of land and 738 feet of lake frontage.

Special Section

April 28, 2021 • Wednesday • T5

SELLERS GUIDE

COLIN MULVANY/THE SPOKESMAN-REVIEW

These homes are being built by Greenstone Homes in Liberty Lake. Experts and economists expect that Spokane-area housing prices will slow but not drop like they did during the Great Recession.

Bubble shouldn’t burst Spokane home prices are expected to decline | but nothing resembling the Great Recession

By Thomas Clouse

THE SPOKESMAN-REVIEW

The last time Spokane had a major run-up in home prices, it didn’t end well.

The area suffered a fouryear stretch during which home values dropped.

But observers of area real estate and the local economy believe the economic underpinnings of the current surge in prices won’t suffer the same fate as the local housing market during the Great Recession.

That economic disaster followed a flurry of loans by lending institutions that rushed to lend money without checking whether the borrowers had the ability to repay the loans, said Grant Forsyth, chief economist for Avista Corp.

“I would say the biggest thing, from what I’m being told from the banking sector, there is a big difference in loan quality and loan standards than there was in that 2004 to 2006 period,” Forsyth said. “It’s not as easy as it was during the housing bubble to lend money to people who have apparently dubious ability to pay.”

LUXURY

Continued from 4 prairie.”

Recent listings showed 15 properties priced more than $5 million in North Idaho. The two priciest are listed at $27 million. Only a limited number of buyers can afford that, Orth said.

“That’s for the high-end, specific buyer,” he said.

“People who have this type of money typically have other homes.”

It used to take two to three years for such properties to sell, Orth said. But last year a property valued at $30 million on Lake Coeur d’Alene sold after only 119 days on the market.

“That tells us something,” he said. “Historically, stuff like that would sit around.”

Realtor Greg Rowley, a luxury property specialist with Coldwell Banker Schneidmiller Realty, is the listing agent for the two most expensive properties for sale in North Idaho. He said he wouldn’t be surprised if one of them sells this summer.

“It is an interesting time,” he said. “Some homes that had been on the market for years upon years sold last year. There’s not a lot left.”

The asking price for the Copper Rock Estate at Mica Bay on Lake Coeur d’Alene

David Flood, chief lending officer for STCU, agreed. He said during the run-up to the Great Recession “there was a lot of pressure for more people to make more loans. They were making loans that weren’t necessarily in the best interest of the owners.”

Both agreed that the current increase in Spokane-area housing prices largely is driven by a lack of inventory. Because of more people moving to the area and fewer homes on the market, it has created a seller’s market in which home owners are often receiving several bids that exceed their asking prices.

“We just have so many people moving in that we can’t keep up,” Flood said.

“I don’t think we have a bubble – that we will have this big collapse like we did in 2010. The prices may come down a bit, but I don’t think they’ll come down to where they were just a couple years ago.”

Rob Higgins, executive vice president of the Spokane Association of Realtors, said he expects current market conditions to last a couple of more years

is $27 million. The main home of 9,000 square feet comes with 30 acres of land and 738 feet of lake frontage. Shown by appointment only, it also includes a guest house, a huge shop and caretaker’s quarters.

The home has four bedrooms and 4.5 bathrooms.

The home is automated and includes a game room, theater, soda bar, a home fitness center and vaulted ceilings with huge wooden beams. There’s an outdoor living room with an openair kitchen for warm summer days.

Thunder Ranch, perched above Bottle Bay on Lake Pend Oreille on 48 acres, is also priced at $27 million.

The main house is more than 14,000 square feet and has four bedrooms and seven bathrooms. There’s a bunkhouse and a guesthouse. The ranch includes a stable with living quarters as well as several barns and shops, an orchard and a caretaker’s house. There’s even a business office with workstations, high-speed internet and multiple phone lines.

The home has more than 5,000 square feet of decking and an infinity pool overlooks views of the lake.

Five wells supply water to the property. The 1,600 feet of lake frontage includes

“and then it will start to level off.”

“Real estate is a cyclical business,” he said. “The prices generally don’t go down. They do moderate.”

The one big surprise was how local housing prices continued to increase during the coronavirus pandemic, Higgins said.

“We were headed this way anyway,” he said of the higher home prices. “What COVID-19 did, it just accelerated that. ‘Heck, I’m living in Seattle. I’m tired of the traffic. I have a job where I can work from home. I’m coming to Spokane and buying something with cash. I’ll just keep bidding it up until I get it.’ ”

The downturn

Joel White, executive director of the Spokane Home Builders Association, is more pessimistic about the current situation that has led to record home prices.

“We are still seeing people moving in. That’s what’s driving us. But there are clouds on the horizon,” White said. “What happens when that stimulus See BUBBLE, 8

multiple docks with room for three boats and four jet skis. The home includes a game room and wine cellar, and there’s a helipad next to one of the pastures.

“It is quite the spread,” Rowley said.

By contrast, the Spokane area didn’t have any homes available priced more than $5 million, Eric Johnson, Spokane Association of Realtors president, said earlier this month. The huge estate homes tend to be across the state line, he said.

“North Idaho really draws,” he said.

The most expensive home available at the time was at 13310 S. Covey Run Lane and priced at $3.8 million. It sits on almost 9 acres in the Ridge at Hangman community. The 12,808-square-foot home has six bedrooms, nine bathrooms and six fireplaces. The house, with domes and multiple peaked roofs, looks something like a castle.

“This house is all stone,” Johnson said. “It looks like a slate roof.”

The interior boasts dual sweeping staircases and custom woodwork.

“It is just out-of-thisworld beautiful,” Johnson said. “It looks like a banquet hall, not a house. Everything is super high end.”

COURTESY PHOTO

Thunder Ranch, perched above Bottle Bay on Lake Pend Oreille on 48 acres, is priced at $27 million.

T6 • Wednesday • April 28, 2021

Special Section

SELLERS GUIDE “As hot as the market is, having the ability for somebody to be able to walk through the house virtually, I think, is key.”

Jeff Nitschke Capture NW owner

TYLER TJOMSLAND/THE SPOKESMAN-REVIEW

Jeff Nitschke of Capture NW stands next to some of the specialized camera equipment he uses to create virtual tours with Matterport 3D technology, at a new home in Spokane on April 13.

Greater focus put on 3D virtual tours in pandemic Move to buyer-friendly online tools to show, sell homes likely here to stay

By Amy Edelen

THE SPOKESMAN-REVIEW

From comparing prices to virtual tours, consumers have become accustomed to the con-

venience of shopping for homes online, a shift that was further accelerated by the coronavirus pandemic.

Real estate agents and industry veterans say the trend of us-

ing online tools to buy and sell homes may be here to stay, pandemic or not.

Twenty-seven percent of sellers indicated their real estate agents have used virtual tours to market properties during the pandemic, compared with 17% of those prepandemic, according to the National Association of Realtors.

Capture NW owner Jeff Nitschke, whose company offers real estate photography services as well as Zillow and Matterport 3D virtual tours, has noticed an uptick in business inquiries during the past year.

Nitschke shoots about three to five virtual tours a week of properties ranging from fixer-uppers to multimillion dollar homes in

North Idaho and Eastern Washington.

“As hot as the market is, having the ability for somebody to be able to walk through the house virtually, I think, is key,” said Nitschke, adding that virtual tours are an additional convenience to out-of-state buyers See VIRTUAL, 8

Special Section

April 28, 2021 • Wednesday • T7

SELLERS GUIDE

Growth bursting on Spokane’s edges More attention must be paid to infrastructure

Bankrate.com

By Thomas Clouse

THE SPOKESMAN-REVIEW

When he was a kid, Rob Higgins used to float on an inner tube in a drainage ditch along what is now MeadowWood Golf Course in Liberty Lake.

What once was nothing but open fields is now packed with large homes as residential growth expands out of Spokane and has begun to explode in places like Airway Heights, Cheney, Post Falls, Deer Park and Spokane Valley.

“You get to my age, and it’s like, ‘Wow. That happened faster than I thought it would,’” said Higgins, 72, who is a former Spokane City Council member. “But, it took forever.”

With a residential housing boom and seller’s market driving housing prices to record levels, the pressure for growth in Spokane County has continued north and east. But the West Plains, with the addition of the massive Amazon fulfillment center in 2020 and access to flat, buildable land, appears to be one of those areas set to reap the benefit of the current growth.

“Spokane is fortunate.

We can grow in 360 degrees,” Higgins said. “We aren’t hemmed in by mountains. We just need to make sure we plan for that growth. We need to think 20, 30, 40 years out.”

Cheryl Stewart, executive director of the Inland Northwest Associated General Contractors, agreed, saying that local governments have worked to improve infrastructure, but much work remains.

“As residential booms,

SELLERS

Continued from 3 March.

“The average increase over list price was over $20,000,” he said. “That means the price is being bid up.”

Grant Forsyth, the chief economist for Avista Corp., said the seller’s market is good for those trying to sell their homes, but it could push out younger buyers who are trying to purchase their first new home.

“These are largely native-born people who want to stay here,” he said of the first-time buyers. “They are in competition against a lot of people who can bring a lot of cash to the table. So, there is an affordability issue with these long cash runs.”

Higgins agreed, saying the seller’s market can push some first-time buyers either to wait or force them to rent.

“For the first-time homebuyer, their big issue is to save enough money to make a down payment,” he said. “Almost all of the sales are conventional, which requires a lot. Affordability is going to become a significant issue. “

Population influx

Joel White, the executive director of the Spokane Home Builders Association, said much of the current seller’s market is coming from folks moving to Spokane from the higher-priced real estate markets in the Seattle area.

“It’s not because our

EQUITY

Continued from 2 in on the boom.

“Just because you have equity, I wouldn’t say go use it,” Flood said. “Prices do drop. I’d say be smart about it.”

Deckard, of State Bank Northwest, agreed.

“Take good care of it.

Don’t use the equity in your home to pay off personal expenses, like vacations,” he said. “Don’t put a car on it or other person-

Recovery to influence rate trajectory

TYLER TJOMSLAND/THE SPOKESMAN-REVIEW

Workers complete a home on Bogen Court on April 20 in Airway Heights. The West Plains is one of the outer areas experiencing rapid housing growth in the Spokane area. everything that goes with it needs to grow: schools, water, energy and sewage,” she said. “Right now, we don’t have enough to maintain and keep our current roads let alone build new ones.

“We are going to have to invest in our infrastructure because it’s going to impact everyone.”

Joel White, executive director of the Spokane Home Builders Association, sits on the Spokane County Growth Management Steering Committee. He said a 2016 settlement of four lawsuits limits the county from expanding its urban growth boundary until 2025.

Spokane County adopted that boundary in 2013, which designates development within the boundary as urban and dictates where utilities, such as sewer, can be extended to make way for future growth.

As a result, Spokane County’s expansion has fallen behind places

such as Kootenai County across the Idaho border, White said. Last year alone, Post Falls approved more building permits for homes than all of Spokane County.

“If you drive across the (Rathdrum) Prairie, it’s housing development after housing development,” White said.

“Because of the lack of available land or the price point, they are going over to Idaho.”

Despite the growth to the east, developers are still adding homes north of Spokane, in Spokane Valley and to the west, White said.

“The city of Spokane really is not growing very fast,” he said. “West Plains is really starting to grow.

The North Side ... and the south Valley are the largest areas of growth.”

Higgins, who is executive vice president of the Spokane Association of Realtors, said you could ride 50 feet up in a hot air balloon 35 years ago and it was obvious where

economy is doing so much better,” White said. “We have a great quality of life here. They can buy a nice home in Spokane where they may have been living in a small house or condominium in Seattle that was worth $1.5 million.”

As the inventory remains low, the pressure for contractors to build more homes has increased, White said.

“When these homebuyers call us and ask us, ‘Can you give us a builder?’ We say, ‘Yes. But heads up, you will probably have to wait a year before they can build your home,’ ” he said. “Builders are unable to meet the demand. They are basically turning away business.”

In addition to the normal price increases caused by demand, contractors are currently facing record lumber prices that are adding about $45,000 to the cost of a median-priced home.

“We still have builders building speculative homes, but that activity has died down,” White said. “As soon as they get final plat approval and put a yard stake down, it’s purchased. Buyers are so desperate.”

All that activity has been a boon to local banks as well.

David Flood, the chief title lending officer for STCU, said his company has been doing a robust business with mortgages and refinancing of existing mortgages as buyers and owners take advantage of historically low interest

rates.

He said in 2018, STCU did about $183 million worth of mortgage lending.

That jumped to $442 million in 2019 and it nearly doubled to $731 million in 2020 despite the pandemic. For the first quarter of this year, STCU has already done $221 million worth of mortgages.

“We have more demand for homes than supply,” Flood said. “That gives the seller a pretty big advantage at the moment. We have a lot of buyers for the same home and it’s driving up prices.

Forsyth, the Avista economist, said he expects it may take a combination of market influences for the current seller’s market to cool off.

“My guess is that the home-price gains are going to be pretty sensitive to interest-rate changes,” he said. “And, if suddenly there is a downshift to the number people moving here to the region.”

Higgins, a former Spokane City Council member, doesn’t expect the flow of new residents to stop soon.

He noted the median price of a home in Seattle is still more than double Spokane’s record level.

And, homes in Spokane remain competitive to other regions in the nation, he said.

“Lots of people are coming over from the West Side or California,” Higgins said. “They are looking at the prices and saying, ‘Heck, we had those prices 10 year ago. What are you guys complaining about?’ ”

al expenses. That’s a lien against your house. That will reduce your equity.”

That said, the only way for anyone to cash in on the value built up in their home is to sell it, or borrow against it.

For homeowners that sell, “You still have to buy something in this hot market, too,” Deckard said.

Still, Higgins, a former member of the Spokane City Council, said that record housing prices are adding wealth to homeowners who were willing

and able to survive those early days of scrounging to pay the mortgage.

“It’s not the best financial investment. You can do better investing in other things,” Higgins said.

“But, you are going to need a place to live. So, get that house, even if it is a fixer-upper. For most of middle America, that’s their nest egg.”

Thomas Clouse can be reached at tomc@spokesman.com or at (509) 9530561

services needed to be extended in Spokane.

“Back in the ‘80s, we used to sit around and look at the crystal ball,” Higgins said. “We have all this growth going east towards Coeur d’Alene and growth going north. But downtown is sitting at the end. Nothing is going west. We said we better get sewer and water out to the West Plains and start doing that.”

Growth in Airway Heights began to boom after Northern Quest Resort & Casino opened in December 2000 and steadily began to expand.

Now, 20 years later, Amazon brought thousands of jobs when it opened the fulfillment center.

“There’s all kinds of land out there for housing,” Higgins said. “There is more growth with jobs on the West Plains. It makes sense.”

Higgins said when he unsuccessfully ran for Spokane mayor in 1989, he thought Spokane was poised for prosperity.

“I was 30 years off,” he said. “But my thought always was that the intermountain West, Boise, Salt Lake City, Spokane, those areas are going to be where people are going to want to live.

“It’s away from the congestion of the West Coast, but it’s where we have water and that’s gold. We need to make sure we are preserving that as best we can.”

Higgins said he agreed with Stewart that local leaders shouldn’t get so consumed by fostering growth that they lose sight of providing the infrastructure needed to sustain what residents already have.

“We are fortunate here, but we need to be thinking in the future,” he said.

“Those water and sewer lines are expensive. It just takes common sense to manage our growth.”

Reporter Thomas Clouse can be reached at tomc@ spokesman.com or at (509) 953-0561

Mortgage rates plumbed new depths in December and January, setting all-time lows south of 3%.

Rates have climbed since then, and their trajectory for the rest of the year depends on the strength of the economic recovery.

That’s according to Greg McBride, CFA, Bankrate chief financial analyst.

With coronavirus vaccines now widely available, there’s new optimism about the U.S. economy.

“Bond yields and mortgage rates have climbed since the beginning of the year but now reflect pretty lofty expectations for economic growth,” McBride said. “If economic reality doesn’t live up to expectations, rates are likely to pull back.”

Housing economists say the growing optimism is putting upward pressure on rates. The Mortgage Bankers Association, for instance, expects rates to reach 3.6% by the end of 2021. Its forecast three months ago called for rates to hit 3.5% in late 2021.

If rates continue to trend upward, the refinancing boom of 2020 will slow dramatically by the second half of 2021, said Michael Fratantoni, chief economist at the Mortgage Bankers Association.

“We think refi volume is going to fall off pretty sharply, particularly in the second half of 2021 as the economy really finds its footing,” Fratantoni said.

While mortgage rates will increase enough to discourage refinancing, they’ll remain low enough to make homebuying attractive, Fratantoni said.

“Even if mortgage rates are going to be high enough to curtail refi, they’re still going to be low enough to keep housing affordable,” he added.

T8 • Wednesday • April 28, 2021

Special Section

SELLERS GUIDE STAGING

VIRTUAL

said Barragan, who specializes in vacant-home staging. “The general statistics out there are that usually it could sell 10% over (listing price).

If you sell your house for $400,000, that’s $40,000 more you can get when your home looks really nice.”

Home staging also gives buyers looking at online listings a way to see how different spaces can be used, Barragan said.

“A lot of times, too, with staging, if it’s done well – smaller spaces look bigger,” she said.

Some 31% of agents in NAR’s survey said home staging “greatly decreased” the amount of time a home spent on the market.

Living rooms, kitchens, master bedrooms and dining rooms are the most common areas to stage, but many people are also opting to stage a home office space, with more people working remotely because of the pandemic, according to the NAR survey.

“Staging a home helps consumers see the full potential of a given space or property,” Jessica Lautz, NAR’s vice president of demographics and behav-

who aren’t able to see homes in-person.

Matterport, a California-based computer vision technology company founded in 2011, released a camera that’s capable of providing 360-degree, interactive virtual property walk-throughs in which prospective homebuyers can digitally measure rooms, walls and windows inside a house to ensure furniture will fit or to prepare for a remodel.

In addition, Matterport has the ability to scan and create a 3D “digital twin” of a property’s floorplan.

That feature is particularly helpful with historic homes, which might not have the original blueprints available, Nitschke said.

In May, Matterport released its Capture app, which provides smartphone users with the ability to create, edit and share 3D digital floor plans of properties with the touch of a screen.

Nitschke, who also is seeing a greater demand for 3D virtual tours for commercial properties, anticipates Capture NW will gain even more business as the spring homebuying season gets under-

Continued from 4

Continued from 6

DAN PELLE/THE SPOKESMAN-REVIEW

Amy Barragan, owner of Affordable Home Staging, outfits the South Helena Street home on April 12 with artwork and other touches prior to its showing. ioral insights, said in a statement. “It features the home in its best light and helps would-be buyers envision its various possibilities.”

Seventy-three percent of buyers’ agents said in NAR’s survey that having videos and virtual tours for listings became even more important during the COVID-19 pandemic.

“At the start of the pandemic, in-person open house tours either diminished or were halted altogether, so buyers had to rely on photos and virtual tours in search of their dream home,” Lautz said.

“These features become even more important as housing inventory is limited and buyers need to plan their in-person tours stra-

BUBBLE

Continued from 5 runs out? The (Federal Reserve) intentionally held interest rates down. That can’t continue forever.”

Even a 1% increase in interest rates will have a dramatic affect on the amount of home someone can purchase, he said.

“There is going to be a kick.

We are going to feel a pain,” White said. “Hopefully, the vaccines work and people go back to work.”

He noted that housing permits in Spokane County have started to decline. Multifamily homes and apartment complexes are

tegically.”

Because buyers make a decision of whether a home is right for them within seconds of visiting, Barragan recommends sellers stage the front entrance with a welcome mat or wreath hung on the door.

She also advises sellers to ensure their home is free of clutter and smells fresh, to maximize its appeal.

“This is your one chance to get buyers in here,” Barragan said. “You want to eliminate as many distractions as possible so people can see what your house has to offer.”

Amy Edelen can be reached at (509) 459-5581 or at amye@spokesman.com.

being built “because that’s what the average home income can afford,” he said.

Forsyth agrees with White about the potential for the interest rates and with Higgins that the housing prices likely will not continue to see the double-digit percentage increases of the past year.

Since the mid-1980s, the average price increase of Spokane homes has been 4.5% a year, Forsyth said, referring to charts that graph the price of local homes over time.

But home prices declined from 2008 to 2012 during and following the Great Recession.

“We didn’t start to see positive price growth in these homes,

tracked by this index, until 2013,” he said. “I don’t necessarily anticipate that kind of prolonged of adjustment” to the current prices.

Forsyth said he would have expected the pandemic to force local housing prices down, but it didn’t.

“The COVID-induced recession did not curtail in-migration like recessions did in the past,” Forsyth said. “That outcome has definitely increased the demand.”

Cheryl Stewart, executive director of the Inland Northwest Associated General Contractors, agreed with the others that the current housing prices tend to have better financial backing

way in the region.

Seattle-based real estate technology company Redfin launched a feature in March 2020 for homebuyers to request agentled, video-chat tours via its website and app. The company has been offering 3-D virtual tours since 2014.

Views of 3D walkthroughs on Redfin’s website have increased 603% since February 2020. Agent-led, video-chat tours account for 10% to 12% of home-tour requests, Redfin spokeswoman Angela Cherry said in an email earlier this month “While this is down from its initial peak of nearly 33% in early April 2020, it’s held steady at this level over the past 10 months or so, a trend we think will continue even post-pandemic,” said Cherry, referring to the video-chat tours.

Realtor Collin Kelley, of eXp Realty in Spokane, said he’s been using Matterport virtual tours since 2018 and finds it particularly helpful when showing properties to out-ofstate buyers.

“I see so many people moving up from California, Arizona and Nevada, and it’s so beneficial,” he said. “They are able to get that feeling like they are actually there.”

than during the period of questionable loans years ago.

“Residential is crazy busy, but we are not crazy busy,” said Stewart, whose organization represents all contractors except homebuilders. “With the coming of the Amazons of the world, I think (the local economy) is going to continue to grow.”

She, too, expects housing prices to eventually dip.

“While we are expecting it to slow down, we are not expecting the ‘hockey stick’ down,” Stewart said. “It will be more gradual.”

Forsyth was teaching at Eastern Washington University when the housing bubble collapsed from the Great Reces-

In addition to virtual tours, Kelley uses a tool called DJI Mimo, which enhances video quality when showing properties to clients via FaceTime.

Kelley, who sells homes in North Idaho and the Spokane area, said he’s noticed an increase in the number of people buying homes sight unseen with the use of virtual tours.

“I would like to see that done en masse because it would save so much time for everyone,” he said, adding that while the pandemic has accelerated the use of Matterport, it’s been slow to catch on in the Spokane area when compared to other markets.

There’s a paradigm shift occurring in the real estate world when it comes to embracing new technology to make buying and selling homes easier, Kelley said.

“The cost of great technology is getting lower and lower, and that’s only going to enhance the consumer experience through time,” he said. “No competitive advantage lasts forever, but these are big things that will make buying and selling real estate better for the consumer.”

Amy Edelen can be reached at (509) 459-5581 or at amye@spokesman. com.

sion. He said he had a student at the time who was working for a lender that was approving loans without asking for proof of income.

“My sense is there is a lot less of that going around,” he said. “That being said, I don’t necessarily expect home prices to continue with double-digit rates.

“I could imagine that we see a correction in the market, but not like the correction we saw in 2008, 2009 and 2010. A lot of that reflects the underlying loan quality.”

Reporter Thomas Clouse can be reached at tomc@spokesman.com or at (509) 953-0561