Strong job market key to housing industry
Residential real estate sales were strong in 2002

Michael Guilfoil
Staff writer

Click image to enlarge, or view Kootenai County housing sales. At a glance Interview with Scot Auble

Scot Auble studied criminal justice at Washington State University. Three days after graduation, he went to work for his father's real estate consulting firm.

Auble, who now runs the company, said the lessons he learned in college paid off. "We do a lot of investigating," he explained.

At 41, Auble is one of the main number crunchers behind a semiannual publication, "The Real Estate Report," devoted to Spokane and Kootenai counties. How did the region fare last year?

"Based on the number of jobs we didn't create, I was fairly impressed with the housing market's performance," he said.

Spokane residential sales handled by Realtors increased 5.6 percent, to a record 6,240. Kootenai County saw an even bigger jump -- 12 percent -- with more than 1,900 home transactions reported to the Multiple Listing Service.

"That's not surprising," said Auble. "When the economy is poor in dense urban areas, we get a lot of in-migration by people who may or may not have employment, or don't need it.

"When you've lost a lucrative job, it's easy to move to a quality-of-life area like ours, where there's less-expensive housing."

The flip side, Auble said, is that rising interest rates and/or a national economic recovery could swing things back the other direction -- fewer people will move here, and some might leave for better job markets.

"I don't think our current housing market has legs if we can't create jobs," he said. "We need to put things in place so that once this national recession is over, we have something to offer besides quality of life."

Within the region's overall real estate market, Auble notes bright spots. And none is brighter than downtown Spokane.

"We're seeing an extraordinary revitalization," he said. "We've already had some great things happen -- River Park Square and the Davenport Hotel. But there are so many other little things that have happened, are happening or are going to happen that it's unbelievable, really."

Auble was impressed that Susie Luby and Steve Thosath were able to pre-sell all 11 of their Blue Chip Lofts along Railroad Alley in just two months. "And that's not a sure-bet location by any means," he pointed out.

"I predict there will be three new residential condominium projects announced this year in what we consider our downtown area," said Auble. "One condo project is being considered for the urban core, and several others are being considered for the periphery."

Is it time to invest in downtown real estate?

"I think it's a really opportune time, because downtown is changing," Auble said. "And that's when you want to invest -- at the beginning of the change."

Downtown's real estate picture is not without its dark clouds, though. While Class A office buildings boast 98 percent occupancy and $19-per-square-foot rents, Class B downtown space is only 86 percent occupied. And $11-a-foot Class C space sits almost half empty.

Also hurting is Spokane's Northpointe area.

"The only reason that area is suffering is that it's overbuilt," Auble explained. "The absorption rate up there has been very healthy. They just built at a faster pace than absorption would allow," resulting in a 20 percent vacancy rate.

Consumer confidence will continue to drive the fortunes of retail real estate, said Auble.

"Problems that cause us to lose confidence -- things such as war or a national recession -- certainly will have an impact on that market," he said.

Conversely, credible talk of a national recovery could have a positive impact.

"Seeing the stock market do well also can drive consumer confidence," said Auble. "But it seems we're probably in for another year of pretty much the same in the retail market."

Auble said the relative prosperity of Spokane and Kootenai counties is mostly in the hands of legislators.

"State issues -- workers comp rates, ergonomic rules, growth management -- have an impact on Spokane's ability to compete with Idaho for jobs," Auble said, "and sooner or later the retail follows those rooftops."

Citing Buck Knives' decision to move its corporate headquarters and manufacturing plant from California to Post Falls instead of runner-up Spokane, Auble observed, "If they're getting jobs over there and building a lot more houses over there, sooner or later our retail is going to start bleeding over there, too.

"That's good for Idaho," said Auble, "but bad for Spokane."

Real estate facts