Windermere North Spokane
Windermere North Spokane
| Home | Careers | Blog | Get approved On-line | Email Us |
Create an Account
Creating an Account allows you greater access to additional home search features.
Click Here To Begin
Spokane's Trickle Up Recovery
Posted on September 11, 2009
The Spokane real estate market is recovering nicely and here is the proof.....
Sometimes we get bombarded with stats and graphs and charts and expert opinions. They tend to vary widely based upon the experts political agenda and depending upon whether or not they are local, regional or national. But there is one fundamental statistic that says it all.
The basic economic fundamental of supply and demand is expressed as one simple number - Months of Inventory. If there is more than six months of inventory sellers are forced to drop prices in order to attract the scarce buyers. That's not a healthy market.
If there is less than 4 months of inventory buyers have to pay a premium as there are too many buyers chasing too few homes. That causes prices to rise rapidly, which is also not healthy because it isn't sustainable. At some point the market corrects and the people that bought during the run-up are the losers.
The sweet spot is 4-6 months of inventory. When the market falls into that groove it means that buyers and sellers have equal bargaining power. This is the basis for long-term sustainable price appreciation. That is the sign of a healthy market.
So here is what has happened this year in Spokane. In April every segment of the market had greater than six months inventory. However in May the $100-$150k priced homes dropped below six months; in June the $150-$200k priced homes dropped below six months; and in July the $200-$250k priced homes dropped into the sweet spot.
What's causing the trickle up? The First Time Home Buyer Tax Credit has stimulated sales in entry level homes. That enables those sellers to move up to the next level, and so on and so on. As a result the Spokane market is strong and healthy from $0-$250k!
August results will be out soon and we'll see if the trends continue!
