Spokane tabbed among 'four hottest markets'

Seattle-area real estate technology company Redfin has named Spokane as one of the "four hottest markets for affordability-seeking homebuyers in the next decade." Other cities to make the list are Las Vegas, Charlotte, and Orlando.  

As expensive coastal metros struggle to find solutions to rising housing costs, homebuyers have begun looking to smaller more affordable metros where land is cheap and incomes are growing. Already, Spokane, Las Vegas, Charlotte and Orlando are attracting out-of-town homebuyers and, thanks to the low cost of acquiring and developing land for new home construction, each is poised to attract homebuyers for years to come. That makes these the four metros primed for growth over the next decade.

Spokane, Washington

Sales of new homes increased 37% in Spokane from Q4 of 2018 to Q4 of 2019 compared to only 5% growth in existing homes. The city is currently the most competitive housing market in the country with a Compete Score™ of 89. That’s in part thanks to significant homebuyer interest from out-of-towners—73% of Redfin searches for homes in Spokane come from homebuyers located outside the metro.

Conveniently, Spokane is well suited to absorb all of the potential new migrants. That’s because in Spokane land is cheap and therefore homebuilding is inexpensive. The cost of acquiring land to develop on is a major reason housing supply has lagged behind demand in big expensive cities. In Seattle, land comprises 42% of the value of the homes, but in Spokane, land comprises only 23% of the value of homes, making it harder for homebuilders to turn a profit on land in Seattle than in Spokane. Seattlites, who are used to a median home price of $570,000, will find Spokane homes extremely affordable, regardless of whether they are buying an existing home with a median price of $255,000 or a new home with a median price of $350,000.  

“Tons of people are moving in from the coasts because Spokane is more affordable and less crowded,” said Redfin market manager Michelle Kendrick. “Spokane has all of the basics you would want in a city, but at a great price. It feels like we are in a construction boom. A lot of the new construction is happening on the outskirts of the city, which contributes to our version of traffic. To people from out of town the traffic is nothing, but if you have lived here a long time you do notice it. Job growth has also been a draw for out-of-towners. We have a new Amazon distribution center, the airport is expanding, and the medical industry is big and growing.”