2016 Year in ReviewResidential Market Trends

and OutlookJennifer Valerien, 2017 President

Residential Median Home Price - Spokane County

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

20000019

96

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

101,500

185,400195,000

Compound Annual Growth Rate 1996 - 2016 is 3.32%

Distressed Properties• Short Sales have seen double

digit declines over the past three years with a 26.2% drop in 2016.

• In 2016 we saw a significant drop in closed sales of bank owned properties. Sales were down 32%.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2011 2012 2013 2014 2015 2016

22.0%

14.0% 13.2% 13.4%10.7%

6.6%

% of REO Sales - Annually

Inventory Issues

2016 Number of Sales

Up 9.9%

2016 Inventory

Down 22.5%

Months of Inventory• Months of Inventory is a formula based upon current active listings and sold or

pending sales.

• Inventory divided by sales equals months of inventory.

• Under 4 months of inventory is a SELLER’S market.

• 5-6 months of inventory is a NEUTRAL market.

• Over 6 months of inventory is a BUYER’S market.

• Based on January sales Spokane County has about three months of inventory.

Inventory vs. Price Range

0 5 10 15

<$100,000

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

$500,000-$599,999

$600,000>

Current Spokane County Inventory in Months by Price

Months

$0-$99,999

$150,000-$199,999

$250,000-$299,999

$350,000-$399,999

$450,000-$499,999

$550,000-$599,999

$700,000-$799,999

9.118.5

24.720.3

12.56

3.72.1

1.20.70.40.30.20.2

2016- % of Sales by Price Range

Percentage

Valley

Current Months of Inventory: 3.6

2016 Average Sales Price: $234,189

2016 Unit Sales 2,175 up 11.9%

Northwest

Current Months of Inventory: 2.1

2016 Average Sales Price: $193,165

2016 Unit Sales 1,899 up 4.1%

Northeast

Current Months of Inventory: 2.8

2016 Average Sales Price: $161,176

2016 Unit Sales 1,187 up 8%

South

Current Months of Inventory: 2.5

2016 Average Sales Price: $245,878

2016 Unit Sales 1,692 up 13.9%

Downtown

Current Months of Inventory: 6.6

2016 Average Sale Price: $315,647

2016 Unit Sales 49 same as 2015

West Plains

Current Months of Inventory: 1.8

2016 Average Sales Price: $193,827

2016 Unit Sales 423 up 12.2%

New Construction

New Construction Sales in Spokane County

YEAR SALES AVERAGE PRICE MEDIAN PRICE

ALL AREAS

2016 850 290,399 267,357

2015 715 283,774 260,527

2014 652 273,372 254,199

2013 692 258,414 237,603

2012 540 245,691 219,594

2011 498 228,572 204,930

2010 554 231,974 206,392

2009 568 262,460 219,925

2008 805 286,677 248,944

2007 1,259 292,644 251,000

Factors to Consider in

2017

National Forecast

2016

• Mortgage rates are likely to increase throughout

2017.

$235,458

$225,974

$216,985

$208,471

$200,413

$180,000

$190,000

$200,000

$210,000

$220,000

$230,000

$240,000

4.25% 4.75% 5.25% 5.75% 6.25%

$1,500 Monthly Payment

Interest Rate Increase

• Inventory will continue to be a challenge in 2017.

• We should see an increase in first-time buyers.

• Affordability continues to be a major concern in the larger markets.

• Reduction in regulations may bring about more innovation in mortgage lending.

Spokane Market

• Inventory levels will stay at extremely low levels.

• We will continue to see an upward trend in new construction.

• Sales growth may slow.

• Price appreciation should stay about the same as 2016.

2017 Housing Forecast

Units Price

National Association of REALTORS® 1.8% 4%

Spokane Association of REALTORS® 3-5% 5-7%

Jennifer ValerienRE/MAX Inland Empirejvalerien@remax.net