Economic prediction: Flat

SPOKANE - Anyone expecting a big increase in salary this year is probably not being realistic. While the effect of that on the housing market was the focus, it applies across the board, an economics professor said on Thursday.

"Most occupations pay a modest wage," Grant Forsyth told about 465 in the real estate and related industries at the 2010 Real Estate Market Forum Thursday at the Spokane Convention Center. "Purchasing power has not changed since 2005."

More than half of households in Spokane and Kootenai counties earn less than $50,000 a year, and 75 percent make less than $75,000, he said. The median household wage in the region in 2008 was $47,000, and the rate of income growth has been flattening for several years. "The typical job is not $100,000 a year."

In Spokane County, the median wage for individuals is $32,150, and in Kootenai County even less, at $28,540.

The current recession is considerably worse than those of 1991 and 2001, Forsyth said. Those continued for about eight months, while this recession has gone on for 24 months.

That does not make job growth or improvements in unemployment rates likely for several more years, he said.

"Normal unemployment of 6 percent, we won't see until 2013, and in the U.S. 2014," Forsyth said. "This is the worst recession since World War II."

That will mean a continuation of slow home sales.

"The ability to buy a house isn't going to change in the next couple of years, and there will be little change in the next three years," Forsyth said.

The situation is not being helped by increased restrictions and paperwork for lenders, said Katie Marcus, of Mountain West Bank in Coeur d'Alene.

Laying out an alphabetic list of bureaucratic requirements - some already in effect, some pending - she said regulations will slow down the lending process.

MDIA, the Mortgage Disclosure Improvement Act that went into effect in July; HPML, or rules for high priced mortgage loans; HVCC, the Home Valuation Code of Conduct in effect since May 2009 and the S.A.F.E. Act, or Secure and Fair Enforcement for Mortgage Licensing, which begins in July, all mean extra work and extra caution and opportunity for error, Marcus said.

The rules are all meant to protect consumers in the wake of abuses in prior years that contributed to the national economic crisis. S.A.F.E. will require fingerprinting and background checks of individuals involved in lending.

"I though that was an invasion of privacy," Marcus said. "Then (a friend) asked me, 'Have you ever Googled yourself, Katie Marcus?' Hopefully, anybody with a criminal record will likely not be able to practice."

When preparing for her presentation, she was advised to inject humor into the discussion.

"I don't know what's funny about this," she said.

Ever optimistic Steve Griffitts, president of Jobs Plus, the Coeur d'Alene Economic Development Corp., said he prepared by looking through various financial publications for signs of good news. One after another, his response was, "Oops," as stocks declined and retail expectations diminished.

Idaho is a latter-day land of opportunity, however, with property taxes 41 percent below the national average, sales tax 14 percent below and income taxes 37 percent below the national averages, he said. Overall, the state ranks 46th in its tax burden, but to make that advantage work and improve the quality of life, education is critical.

A trained and available workforce and availability of affordable homes are part of the equation for economic success, he said.

Griffitts tempered his enthusiasm with a dose of reality.

"Construction is obviously going to have continuing hits," he said. "I firmly believe we have an opportunity not to be a victim."

He drew laughs with one remark.

"I don't know if you know, but closings are down the last couple of years," he said.