Pullman/Moscow real estate market set for coming boom

Almost four years after the Great Recession ground it to a halt, the real estate market on the Palouse is about to pick up steam, a panel of realtors and land-use experts predicted in a meeting Tuesday.

“We’re definitely in an area that should be growing,” said Shelly Bennett, a realtor with Palouse Commercial Real Estate.

Bennett’s firm presented its second annual commercial market review at Pullman’s Belltower Tuesday.

Experts like Pullman Planner Pete Dickinson and Jeff Jones, director of Moscow’s urban renewal agency, reported increasing trends in construction and renovation of commercial properties in the Pullman-Moscow area.

Dickinson reported an increasing amount of permits have come through his office over the last 12 months.

“We’re seeing more of the kind of activity that we used to see before the recession,” said Dickinson.

While the value of construction projects between 2008 and 2011 was on par with pre-recession values, Dickinson pointed out that was skewed by large buildings like Wal-Mart in 2009 and Schweitzer Engineering Laboratories’ Solution Delivery Center last year.

He reported that the city did not issue a single permit for new construction in 2008 and 2010. Pullman has issued 26 permits in the last 12 months.

Jones reported Moscow construction peaked in 2009 and has sagged since.

While commercial real estate has been slow in the past four years, Dickinson said residential building is set to boom in Pullman as WSU seeks to increase enrollment on the Pullman campus by 7,000 students in the next eight years.

More than 500 units of housing are in the early planning stage to accommodate those students, he said.

Bennett said that new construction will help correct a market that is beyond a “healthy vacancy rate.” She said five percent vacancy is optimal for cities. Pullman residential vacancy rate is currently at .8 percent.

“With an increasing student population in Pullman, it’s going to be hard to find places to put people,” said Bennett.

Too low a vacancy rate means higher rents for tenants and less maintenance requirements by landlords who will be sure to find renters regardless of the properties’ condition.

The increasing student population should also continue to drive improvement in the commercial real estate market, said Bennett, as more students will require more services.

The commercial real estate market did improve in Pullman last year, she said. Vacancy rates along Bishop Boulevard fell from 4.8 percent n 2010 to 4.3 percent. In downtown Pullman, the vacancy rate fell from 9.9 percent to 7.7 percent.

Low prices in 2011 produced a lot of commercial real estate activity on the Palouse, she said.

Bennett added after the forum that conditions in Pullman and Moscow are still unique from the market in outlying communities in Whitman and Latah counties.