In my weekly video on Spokane real estate, I typically go over the current market stats and how the market is changing. This week, I decided to do something a little different. I received a comment asking me to compare the current state of Spokane real estate to what it was like before the crash in 2007-2008 during the global financial crisis. Many people have been comparing the two situations, with some saying that the circumstances are different now and we won’t see the same result, while others believe that the current market is a bubble and a crash is imminent.
To answer this question, I dug into the numbers and did a comparison of July 2007 to July 2022. One thing to note is that in the summer of 2007, the market had already started to drop in price, while we are currently starting to level off. However, I still wanted to do a comparison of apples to apples, so I looked at the data for both periods.
The average price per square foot in Spokane County for single-family homes on less than an acre was $98 in July 2007 and $229 in July 2022. In terms of inventory, we had 2,958 homes for sale in July 2007 and only 943 homes for sale in July 2022, which is about one-third of the inventory. The volume of houses sold in July 2007 was 706, and we have sold 761 houses so far in July 2022, which will likely top out at around 800 for the county. While the volume of houses sold is not much different, the huge difference in inventory is the main factor driving the change in median sold price, which was $203,000 in July 2007 and $460,000 in July 2022.
In July 2007, we had 4.2 months of inventory, which is considered a balanced market. In July 2022, we have only 1.2 months of inventory, which is a seller’s market. Low inventory combined with high demand is driving prices up. Another factor to consider is that mortgage rates are currently much lower than they were in 2007.
In conclusion, while there are some similarities between the current state of Spokane real estate and what it was like before the crash in 2007-2008, there are also significant differences. The main difference is the low inventory and high demand we are currently experiencing, which is driving prices up. Mortgage rates are also much lower now, which is a positive factor for buyers. It’s important to keep in mind that every market is unique and it’s difficult to predict what will happen in the future. If you have any questions about real estate, feel free to give me a call or reach out to me via email or text.