Multi-family market

COEUR d'ALENE - The old adage, "They don't build them like they used to," might well apply to the market for multi-family homes. And smaller is definitely better. "Apartment values are down, but not distressed," said Pat Eberlin, one of five agents from Coldwell Banker Commercial who discussed the prospects for investors in Kootenai County real estate.

COEUR d'ALENE - The old adage, "They don't build them like they used to," might well apply to the market for multi-family homes.

And smaller is definitely better.

"Apartment values are down, but not distressed," said Pat Eberlin, one of five agents from Coldwell Banker Commercial who discussed the prospects for investors in Kootenai County real estate.

Units built between 1975 and 1995 have a stable occupancy rate and because they are generally less expensive to buy offer a better rate of return, he told about 300 in the real estate and related industries who attended the third annual Kootenai County Market Forum presented by the Schneidmiller Realty commercial division Thursday at the Kroc Center.

Those who take good care of their investments can do particularly well, he said.

"A hands-on, well-maintained property will have a better occupancy rate," Eberlin said.

The over-abundance of single-family homes on the market, are part of the "shadow stock" that includes distressed houses and failed condominium projects, and contribute to higher overall vacancy rates of nearly 11 percent.

One newer housing development with 268 homes includes 170 available for rent.

Nearly one in four rentals with three bedrooms and two baths are vacant, and two-bedroom, two-bath units are nearly 13 percent vacant.

Apartments with one bedroom and one bath are fewer in number, and are maintaining a 6.6 percent vacancy rate, Eberlin said.

His information was based on 1,386 apartments with average rents of 75 cents per square foot.

The older units hit a sweeter spot in the market, with rents in the $575 to $590 per month, compared to $746 on average for newer units.

Vacancy rates closely tracked unemployment rates in the past few years, he said.

The glut follows a boom in multi-family construction that peaked at $91 million in 2006, dropping to $51 million in 2007, $12 million in 2008 and $9 million in 2009.

There are several projects in progress or planned this year, however, with more than 100 units ranging from those for St. Vincent de Paul housing to mid-range and low-maintenance mid-range models.

"I do feel we have reached the bottom," Eberlin said.

The data used in the Kootenai County Market Forum is available online at www.cbcsr.com.