Spokane home sales reached a 12-month low in January 2023, even as active inventory grew to over 1,400 available listings in our local market. Meanwhile, average sale prices dropped slightly below 2022 levels as homes averaged 25 to 35 days on market. But with mortgage rates settling into the 6% range, buyer activity is already picking up as we move into spring.
Pricing and Inventory Trends
Spokane active inventory started January 2023 with over 1,400 available homes, while average sale prices dropped slightly below 2022 levels. Closed sales hit their lowest point in twelve months during January, following a dip in new pending sales back in December. However, new listings began entering the market in February, pushing us closer to 2022 listing activity. Right now, our local market is running at a pending ratio of just over 50%. On top of that, homes are taking a bit longer to sell than they did last year. In fact, properties are averaging between 25 and 35 days on market across our local neighborhoods. So while average prices for both existing and newly listed homes sit just below 2022 levels, buyers are taking more time to evaluate their options before writing an offer. You can compare these figures to our December 2022 Spokane Real Estate Market Update.
Mortgage Rate and Economic Context
Spokane 30-year mortgage rates have leveled out between 6.0% and 6.5%, down significantly from the 7.0% to 7.5% rates seen late last year. Mortgage rates reacted well to recent Federal Reserve announcements, bringing much-needed stability to local home buyers. In its most recent meeting, the Fed slowed its pace by raising the overnight rate by 25 basis points rather than previous 50 basis point hikes. This smaller increase suggests inflation may have peaked or is finally slowing down. Because inflation is moderating, mortgage markets responded favorably by stabilizing rate options. Buyers with good credit can currently secure mortgage rates between 6.0% and 6.5%, depending on loan terms. As a result, affordability has improved compared to a few months ago. We expect inventory to remain tight through the first quarter into April because previous years borrowed some future sellers who moved their plans up early.
Advice for Home Sellers
Spokane home sellers must price accurately and bring their property into 10-out-of-10 condition because buyers are taking 25 to 35 days to make purchasing decisions. If you plan to sell your Spokane home early this year, proper positioning is more critical than ever. Higher interest rates make buying a home more expensive, so today’s shoppers are far more selective. In fact, buyers expect a home to be as close to 10 out of 10 condition as possible before making an offer. Because properties are sitting on the market longer, overpricing your listing will cause it to linger. So pricing your home right from day one will attract serious interest while competition remains low. If you want to know what your property is worth in today’s changing market, check out our Instant Spokane Home Valuation Tool.
Advice for Home Buyers
Spokane home buyers should take advantage of stabilized interest rates in the 6% range and higher inventory before spring competition picks up. Buying a home in early 2023 gives you a rare window of opportunity before inventory tightens further this spring. Since rates dropped from 7.5% down to the low 6% range, your monthly payment power has improved considerably. Plus, having over 1,400 active listings means you have more choices than buyers had at this time last year. However, housing supply will likely stay constrained through April because inventory remains historically low. So getting pre-approved now allows you to move quickly when the right home hits the market.
Looking to buy or sell? Visit spokanehomeguy.com or call 509-990-SOLD (7653) to get started!
FAQ
Spokane started January 2023 with over 1,400 active listings, representing higher inventory than the same time in 2022. Despite more inventory, closed sales hit a 12-month low due to fewer pending contracts written in December. However, new listing activity picked up significantly in February.
Spokane 30-year mortgage rates leveled out between 6.0% and 6.5% in early 2023 for buyers with solid credit. This rate drop offered noticeable relief compared to the 7.0% to 7.5% interest rates buyers experienced just a few months prior in late 2022.
Homes in the Spokane area took an average of 25 to 35 days to sell in early 2023, depending on the neighborhood. Because buyers are taking more time due to higher borrowing costs, sellers must price accurately and present homes in top condition.
Spokane inventory is expected to remain tight through the first quarter and into April 2023. Many homeowners accelerated their moving plans in previous years, which reduced available supply. However, buyer activity and new pending sales are expected to pick up as spring approaches.
