Trials and Tribulations of a Booming Real Estate Market

By: Pia Hallenberg
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.

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Article Source: Greater Spokane