As concerns about a potential recession grow, the Spokane housing market faces key challenges and opportunities. While home prices remain resilient nationwide, Spokane's real estate trends are shaped by a mix of high mortgage rates, limited inventory, and fluctuating buyer demand. Here’s what you need to know about the Spokane housing market recession impact and how it could affect buyers and sellers.
Home Prices: Will Spokane See a Market Correction?
Despite economic uncertainty, home prices in Spokane have remained stable. Industry analysts suggest that while some overinflated markets may see price drops, Spokane's low housing inventory should keep values from plummeting. Nationwide, prices are projected to rise modestly (around 2.7% in 2025), with Spokane following a similar trajectory. However, if a deep recession occurs, price stagnation or slight declines could be expected.
Mortgage Rates and Affordability Challenges
One of the biggest factors affecting Spokane’s housing market is the high cost of borrowing. Mortgage rates, which soared near 8% in 2023, have slightly eased but remain in the 6-7% range. If a recession leads to Federal Reserve rate cuts, Spokane homebuyers could see relief through lower mortgage costs, potentially reigniting demand. However, housing affordability remains strained, with many buyers waiting for more favorable conditions.
Buyer Demand: A Market in Limbo
High prices and borrowing costs have slowed buyer activity in Spokane, mirroring national trends. Home sales volumes are at historic lows, with many first-time buyers priced out. However, demand remains “on standby,” as seen when mortgage rates dipped in late 2023, prompting a 15% surge in home purchase loan applications. If mortgage rates drop further, Spokane could see a rebound in buyer interest.
Housing Inventory: The Key Market Driver
Low inventory continues to define the Spokane housing market recession impact. Homeowners locked into low mortgage rates are hesitant to sell, keeping supply tight. While new construction has helped somewhat, builders face cost constraints. The lack of available homes keeps prices stable, preventing significant declines even in a slowing economy. Spokane’s housing shortage is expected to persist, supporting home values in the near term.
Regional Trends: How Spokane Compares
Unlike overheated Sun Belt markets experiencing price corrections, Spokane’s housing market remains competitive due to limited supply. While some cities have seen home values decline, Spokane’s relative affordability compared to major metro areas keeps demand somewhat steady. The market remains seller-friendly, but buyers have more negotiating power than during the pandemic boom.
Investor Activity: A Mixed Influence
Real estate investors have been active in Spokane, targeting lower-priced homes for rentals. While investor purchases dropped in 2022 due to rising rates, activity rebounded in 2024 as buyers sought opportunities in a cooling market. Investors purchasing entry-level homes can increase competition for first-time buyers, keeping demand alive despite affordability struggles.
What This Means for Buyers
Challenges: High mortgage rates and limited inventory make homebuying tough.
Opportunities: Buyers have more negotiating power, with sellers offering concessions like closing cost coverage and mortgage rate buy-downs.
Key Takeaway: If mortgage rates decrease, buyer demand will rise, making now a good time to negotiate before competition heats up again.
What This Means for Sellers
Challenges: Slower sales and cautious buyers mean pricing a home correctly is crucial.
Opportunities: Spokane’s low inventory gives sellers an edge, and well-priced homes still attract strong interest.
Key Takeaway: Sellers who price realistically and offer incentives can still achieve successful sales in this shifting market.
Conclusion: What’s Next for Spokane’s Housing Market?
While a recession could bring economic challenges, the Spokane housing market remains resilient due to limited supply and pent-up demand. Whether you’re looking to buy or sell, staying informed about mortgage rates, local inventory trends, and economic shifts will be key to making smart real estate decisions in 2025 and beyond.
FAQs
Will Spokane home prices drop in a recession? Home prices in Spokane are expected to remain stable due to low inventory, though slight declines could occur if economic conditions worsen.
Are mortgage rates expected to decrease? While mortgage rates remain high, they may gradually decline if the Federal Reserve cuts interest rates in response to a recession.
Is now a good time to buy a home in Spokane? Buyers can negotiate better deals now than during the pandemic, but affordability remains a challenge. Those who can secure financing may benefit from reduced competition.
Should sellers wait to list their homes? Sellers should assess their financial situation. While demand is lower than in past years, Spokane’s tight inventory still favors well-priced listings.
How does Spokane’s housing market compare to other cities? Unlike some overheated markets experiencing price declines, Spokane’s limited housing supply keeps prices relatively stable.
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About Me
My name is Nick Briggs
Being born and raised in Spokane I grew up knowing what a special place this city is, and it was my dream to help others create a life in this wonderful community by guiding them in real estate. I spent many years in the customer service industry, the experience of listening and communication showed me how much I truly loved helping people. I attended Gonzaga University and earned a Bachelor’s Degree in Business Administration to add to my knowledge of guiding, managing, negotiating, and listening to individuals, helping them achieve their real estate goals.
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