Spokane's once-suffering housing market now thrives

December 20, 1992|By Melanie J. Mavrides | Melanie J. Mavrides,New York Times News Service

SPOKANE, Wash. -- On a ridge overlooking Spokane Valley, Jim Frank is selling houses almost as fast as he can build them. Here, amid tall stands of Ponderosa pine and honey-colored fields, it's easy to imagine how the area used to be in the late 19th century when it was a train stop between Seattle and Minneapolis.

Certainly, Spokane, 280 miles east of Seattle and just a few miles from the Idaho border, is off the beaten track and isolated from major metropolitan areas. But enough people have discovered it to give Mr. Frank a place in what the National Association of Realtors says is one of the fastest-appreciating housing markets in the nation.

The valley, where apple orchards once thrived, has been carved up into numerous housing subdivisions, two shopping malls and the area's largest industrial park.

In contrast to real estate markets elsewhere in the 1980s, Spokane suffered. Its economic mainstays -- timber, mining and agriculture -- were in recession for most of the decade.

Silver prices plummeted, mines closed and people fled double-digit unemployment rates to places like Seattle, where Boeing Co. was booming.

In the process, some homeowners took big losses.

Today, as the rest of the nation languishes in recession, it's Spokane's turn to thrive.

Since 1986, Boeing and other companies have discovered the region and its labor force, opening factories and bringing 20,600 new jobs to a metropolitan area with a population of 377,000 (Spokane proper has a population of 180,800). Median household income in the period rose by 14.5 percent, to $25,769.

The good-life seekers, particularly Californians, are flocking here for jobs and a change of life style. As one of the few places left in the West not feeling the effects of pollution, crime and congestion, Spokane has a small-town feel.

And the job machine hasn't stopped. In the last several years, the city has become a medical center for eastern Washington, neighboring Idaho and Montana. Retailers and manufacturers are lured by the region's popularity.

Last year, Fairchild Air Force Base eluded the Pentagon's hit list for closings and announced it would add 1,100 jobs.

Spokane's turnaround was helped by a strong marketing campaign called Momentum 1987, begun the year before that by several local businessmen. Over five years, the group raised $11 million from businesses that pledged from $50 to $100,000 a year for the cause. In Spokane, the median price for one-family homes rose 26 percent in the first quarter this year, the fastest in the country, according to the National Association of Realtors. The rate settled at 19.7 percent in the last few months.

As booms go, this is no feverish West Coast expansion. There are no bidding wars on houses, no Hong Kong money flowing into the residential housing market, no California developers trying to cash in on the region's good fortune. Banks are cautious about making too many loans; developers, in the same vein, are trying not to overbuild, said Robert T. Curtis, a loan officer at the Washington Trust Bank.

Still, the demand for new houses is brisk. There is one problem: The demand for buildable lots is outpacing the city's ability to issue the permits needed to make land buildable. Annexing county land has been suggested but has met strong resistance from opponents of suburban sprawl.

Some people view the rise in house and land values as a mixed blessing. Geralyn Haas, 39 years old, who moved from Boulder, Colo., last year, bought a quarter-acre of undeveloped land for $70,000 on a lake in hope of someday building a house. A year later, a real estate broker offered to buy the land for $120,000, but Ms. Haas declined the offer.

"I had just left Colorado where things got crazy," she said. "There was an incredible influx of Californians, East Coasters, and New Yorkers who were driving up the prices. I'm afraid that will happen here."

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