Housing market in flux

COEUR d’ALENE - The North Idaho housing market ended 2022 different than it started.

According to year-end results from the Coeur d’Alene Regional Realtors, 2,557 single-family homes on less than two acres were sold in Kootenai County in 2022, down nearly 30% from 3,510 sold in 2021.

The median price, however, rose from $480,000 to $550,000, a 14.6% increase.

In Shoshone County, 201 homes sold in 2022, also down nearly 30% from 2021, according to Coeur d'Alene Regional Realtors. The median price was $274,500, up 14.4% from December 2021.

Jennifer Smock, co-owner, managing broker with Windermere Coeur d'Alene Realty/Post Falls, said the first two quarters of 2022 were a sellers' market with buyers competing for homes.

But mid-year, with a dramatic rise in interest rates, the housing market “experienced a quick shift and a serious slowdown.”

“When interest rates jumped up close to 7% buyers found themselves unable to purchase at the current home price values,” Smock wrote. “Sellers realized quickly that if they wanted to be successful, they would need to negotiate, give incentives and/or reduce their sales price. "

There are many more properties on the market today for buyers to consider than one year ago. As of Jan. 5, according to Coeur d'Alene Regional Realtors, there were 634 active residential listings in Kootenai County, up from 184 in January 2021.

While it seemed a house in the $500,000 range was considered a good deal not long ago, prices have edged down in light of interest rates.

A few homes on the market in Coeur d’Alene as of Tuesday included:

• A three-bedroom, one-bath, 888-square-foot home on Melrose St. listed at $352,500 had an offer after a $10,000 price drop.
• A three-bedroom, one-bath, 1,656 home on N. 16th Street listed at $299,000 also had an offer following an $11,000 price drop.
• A two-bedroom, two-bath, 1,455 mobile home on Dartmouth Circle in Oak Crest Mobile Home Park was listed at $145,000. The homeowners association fees were $795.
• A three-bedroom, two-bath, 1,904-square-foot foot home on Satre Avenue was offered at $440,000.

But some reports indicate potential buyers shouldn't expect the market to bottom out.

“After a couple of red-hot years for the housing market, there are indicators a correction is underway — but it’s been slow-going. Mortgage rates are still hovering around double what they were a year ago,” according to a recent report on forbes.com. "And nationwide home prices are still increasing on a monthly basis despite a decline in total sales. This continues to make it harder for many homebuyers to access affordable housing."

Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors, wrote that mortgage interest rates will likely stabilize below 6% this year. She expects inflation to slow and the housing market to turn around in 2023 and rebound in 2024.

Still, consumers remain skeptical for many reason, Smock said. They are curious what interests' rates will do, if values will come down even more and contemplating if now is a good time to buy or sell.

“Much of what will happen in 2023 will depend largely on interest rates and affordability,” Smock wrote. “Inventory will continue to be on the lower side, keeping a bit more pressure on buyers, but certainly nothing like we have experienced in the past few years here in North Idaho.”

Smock said values, more likely than not, will still come down a bit.

“We experienced an extreme increase in a short timeframe, and the market will have a correction of sorts,” she wrote. “How much is hard to anticipate given that our area is still very desirable for many and we are still seeing cash buyers and retirees who are not dependent on wages, enter our market."