When we look at home costs we focus on land, labor and lumber. Right now, all are in short supply causing a dramatically higher home price. With home prices in Spokane up 21% from this time last year, supply and demand is not the full story. We are in a housing crisis, no doubt. In a healthy housing market, a city should have between six and eight months of existing inventory-we have 11 days. And we wonder why prices are high.
A large contributor is the sky-high costs of lumber. In April of 2020, lumber was $259 per one-thousand feet, today it is $1,180, according to Nasdaq. Leaping 180% in just one year. This of course is passed on to the buyer adding about $20,000 to a new home. Economically we have seen that with every $1,000 increase, 200 families are now unable to afford a home. This, along with state mandated energy codes has put close to 9,000 Washington residents out of the market. Effectively eliminating their economic prosperity and opportunity associated with owning a home.
With labor shortages due to COVID, we see light at the end of the tunnel. Our County is moving in the right direction of opening up more. We can bounce back and put more people back to work building homes. These are good-paying jobs that are employed right here in Spokane through small businesses. If we want our economy to bounce back quickly let’s start by putting more people back to work and supporting our small businesses.
The housing market is hot, and in order to keep pace we need to keep building and providing a home to those not only in need, but those who have always wanted to realize the American Dream of being a homeowner. If Spokane is serious about fixing its current housing crisis, our leaders need to make a clear distinction about wanting to fix it. Because right now they are happy to let residents know they can’t own a home here and they will have to go someplace else.