HOUSING CHARACTERISTICS SUMMARIES
To better capture housing characteristics in the Green Bluff market, a survey over the last five years of Spokane Multiple Listing Service (SMLS) sales on 1 acre or more was performed.
Site Size Distribution
Site sizes range from 1 – 456 acres; the median site size is 8 acres. Most of the sites in this neighborhood are between 5 acres – 10 acres.
House Size Distribution
The smallest single-family sale was 980 sq.ft., and the largest was 8,010 sq. ft.; most ranged from 2,400 sq.ft. to 4,200 sq.ft.; the median house size is 3,100 sq.ft.
Year Built Distribution
The year built of houses ranges from 1890 – 2022. Most of the sales in this neighborhood were built between 1980 – 2001, and the median house age is 29.
MARKET CONDITIONS
The data summarized below is from the Green Bluff market area from the Spokane Multiple Listing Service (SMLS) during 2022 for properties on 1 acre or more.
Sales Volume / Activity
There were a total of 44 sales, which is 3.67 total sales per month. Of these total sales, there were 0 distressed sales (bank owned, short-sale) reported in the Spokane Multiple Listing Service (SMLS), and there were 44 non-distressed single-family sales.
Of these 44 non-distressed sales, 3 were new construction, and 41 were resales.
The price summaries of these sales are in the table below:
Property Values / Sale Prices
Sale prices ranged from $272,000 – $1,533,400; the median sale price was $771,000. The majority of sale prices were between $558,000 – $956,000. The sale price distribution for all of the resale and new construction homes in this market area is below.
Sale Price Distribution
In the last year, sale prices have decreased. There was an slight increase from the beginning of 2022 until May, but since then, prices have declined overall. See the following graphs below showing the sale price index and median sale price trend.
Sale Price Index over 12 months
Median Sale Price Trend
** For the month of Sep 2022, there was only 1 sale, which is not representative of the overall trend**
List to Sale Price (LPSP) Ratios
The median LPSP ratios over the last 12 months fluctuated. For most of 2022, properties were selling below their list prices. This indicates that the market is softening and buyers are starting to see more discounts on prices for properties. See the LPSP ratio graph that shows the trend.
Demand/Supply
The total months inventory in Green Bluff was higher during spring and summer, which is typical as more properties are for sale during the warmer months.
At the end of the year there was a 0.5 month supply, which is about a 15-day supply of homes for sales. This means that if no more houses were listed for sale, all of the homes on the market would sell in 15 days. It is expected that more houses will be listed for sale in the spring of 2023 as temperatures start to warm up and the snow starts to clear.
See the chart below that shows the inventory trend for 2022.
Marketing Times
Most properties over the last 12 months received an offer within 15 days on market. For this most recent quarter, the average DOM is 37 and the median is 25.
Marketing times are currently short. In the last 12 months prior to the effective date, 64% of properties are getting an offer within 0-30 days on the market. Another 20% of properties are getting an offer within 30-60 days on the market, which means that 84% of properties are getting an offer in 60 days or less.
While in the earlier part of 2022, properties most properties were getting an offer in 60 days or less; in recent months, it is now expected to take up to 90 days, or three months to get an offer on a property.
The chart below shows the trend over the last 12 months within time period groups.
DOM Analysis by Time Period Groups
The following chart shows the quarterly average and median days on market for 2021 and 2022. Marketing times have been increasing, meaning that it is taking longer to get an offer on a property once it is listed for sale.
DOM Quarterly Analysis
Payment Type for Property
Prices are heavily influenced by current loan rates. When loan interest rates are high, it makes property less affordable for buyers. When people can’t afford property, this results in more buyers getting out of the real estate market. Eventually, there is less demand for the properties that are on the market. Now if buyers aren’t competing with each other driving the prices up, eventually the market dynamic shifts to sellers competing with each other to sell their property. . . which results in pushing the prices DOWN.
Payment Type – Cash vs. Loan
Because most loans require an appraisal, if you have an overpriced listing, and the appraised opinion of value is less than your contract price, your chances of selling at that high price are low, in fact, about a 20% chance, which is the amount of cash buyers in the Green Bluff market. If you have a cash buyer, then they almost never get an appraisal.
Loan Types
In most cases, a buyer will pay with a loan, which means there will likely be an appraisal. In the Green Bluff market, the previous chart showed there is an 80% likelihood that there will be a loan and an appraisal.
So, you can price your property high, but just know that you may have to renegotiate the price if the appraisal is less than the contract price.
Loan Price Limits
Some loans have more strict lending requirements than others. Also, some loans have price limits, like FHA. For 2023, the current FHA loan limit for a single-family dwelling is $472,030 (https://fhaloans.guide/loan-limits/washington/spokane-county).
I’ve seen listings with prices well over that limit advertising that a buyer can use FHA financing. Image what happens when a buyer’s agent and a listing agent don’t know FHA has a price limit and a seller with a listing price over the FHA limit accepts an offer with FHA financing. Talk about a sale falling apart! Believe it or not, I’ve seen it happen. . . but not with me, mind you!
Loan Safety Requirement
Some loans have very specific safety requirements, like FHA or VA. When a buyer uses these types of loans, the appraiser checks the property to make sure all the boxes are checked for what’s generally called, “Minimum Property Requirements,” or MPRs for short. Features like the roof, water system, electrical system, exterior paint, etc. all have to meet rigorous safety requirements.
If a property doesn’t pass these requirements, either the seller or the buyer have to fix it so it passes. Otherwise, the lender won’t loan on the property and the deal falls apart. Imagine again, if you will, a buyer’s agent and a listing agent that don’t know these safety requirements. Again, a deal with problems just waiting to happen!
You can estimate your chances of getting one of these loan types just by looking at what types of loans are most common in the Green Bluff market. See the chart below:
Market Conditions Concluding Remarks
The Green Bluff real estate market for 2022 had its ups and downs, but the market correction was long overdue. Prices were increasing to the point where property was becoming unaffordable for locals and first-time home buyers. What about folks looking to get some land to farm, even just hobby farming? Forget it!
Last year’s real estate market forum for the Coeur d’Alene and Spokane region highlighted the incredible population growth happening. Many are moving from areas with property values double or triple the values in the Spokane area. Once those owners sell their property, the price tags in Spokane seem like small change.
They take their lump sum of cash and just pay the price here like it’s nothing. Sometimes just paying the price meant paying $50,000 to $100,000 over the list price. That’s hard to compete with. If you were a seller, it was great for you, but if you were a buyer, pain, sorrow, and heartache awaited you. Either in the form of making dozens of unaccepted offers, or eventually getting an offer accepted way above asking price, which puts a pinch on the pocket book.
Despite the outcry of inflation pains and increased loan rates, it has caused the insanity of crazy bidding wars to stop, or, at least, reduce significantly. According to loan trends from fred.stlouisfed.org, loan rates peaked about mid-November 2022 at just over 7%. This is almost a 4% interest rate increase from the beginning of 2022. This has been a major contributor to declining sale prices and increasing marketing times. The higher loan rates result in many buyers being priced out of the market, thus reducing the demand for housing. As a result, with less demand, there is less upward pressure on prices due to a lack of or reduced competition for homes.
Additional Listing Tips for 2023 based on Current Market
Patience is a Virtue
While prices are coming down, this is much needed to bring balance back to the market. Also, marketing times of 1-2 days is NOT NORMAL. If you’re putting a property up for sale in 2023, especially if loan rates continue to increase as they are expected, don’t panic if your house is on the market for 30, 60, or even 90+ days. Especially for properties on acreage, these are more normal times to get an offer.
Don’t panic if you’re not getting a offer in the first week or two. Marketing times depend on how the rest of the market is doing and depend on if the price is right. If your list price is too high, expect longer than normal marketing times. If the price is right, then it’s easy to tell how long it should take to get an offer.
The table below shows the days on market (DOM) for sales in the Green Bluff market for 2022. 64% got an offer within 30 days. Another 21% got an offer in 30-60 days, which means 85% of properties got an offer within 60 days on the market.
So, if the price is right, you’ve got some trail markers along the way. If you don’t have an offer within 30 days in this market, that’s when to consider a price reduction. But, that may not be necessary yet. Another group took up to 60 days.
Once you get past 60 days, most properties got an offer by that time. So, at the 60 day mark, if you haven’t reduced the price, it’s probably time to do so. Especially once you get to 90 days or more, it’s time to reduce the price!
Pricing a Property
When pricing a property, while current listings are nice to see what the competition is, it’s not a good idea to set the price of your house based on these listings. Many times, active listings are overpriced, and if you set your listing price based on the overpriced competition, your listing will also be overpriced. This just ends up being time wasted and usually money lost. Often, when a listing is overpriced, by the time it sells, it sells for less than what it was worth to start with because of one or more price reductions required to catch up to current market conditions. So, don’t waste your time or money. Start by pricing it right.
Ever hear the expression, “Time is money”? Well, in this market right now, time can be a loss of money. The chart below illustrates the point. The longer a property is on the market, the less it’s selling price will be.
On the left is the discount compared to the original listing price. Big discounts the longer a property is on the market. On the right is the price the listing was when it finally got a contract. This is the final list price after all price reductions, and even with this, the longer it’s on the market, the contract prices are still less than the final listing price.
Again, time is money. . . or sometimes time is a loss of money!
You can price it right by setting a baseline using market area sales. Their prices are a fact and indicate the past market performance. It’s ok to use sales from several months ago, or even a year or more. All that has to be taken into account is how prices have changed.
For example, if a property similar to yours sold 12 months ago for $500,000 and prices have declined by 10%, then in order to estimate what that same property would sell for today, its price 12 months ago would need to be reduced by 10%. This would mean that property is worth $450,000 in today’s market.
Use the Right Sales
What’s also important is to use sales of properties that are similar to yours. Think “apples to apples,” not “apples to oranges.” Just because a neighbor’s house sold for $500,000 doesn’t mean your property is worth the same. It could be worth more or less.
Remember, if your house is an “apple,” but the neighbor’s house is an “orange,” then they’re not similar, and it’s not a good idea to use it to set a price for yours. Find the other apples with their prices and see how they all compare to get an idea what your price might be.
Need a private appraisal for an estate valuation, separation agreement, or a private party sale?
Selling in 2023 and need to list your property for sale?
Call Cody Kerr
509.944.5071
Licensed Appraiser
Realtor/Agent
Expert in properties on acreage and Green Bluff Real Estate Specialist
Great info. Thanks for keeping us posted on the market