Real estate market is 'unbelievable'
| November 11, 2010 8:00 PM
COEUR d'ALENE - The real estate market in Kootenai County is unbelievable.
And that might not necessarily be the best thing for the county's 2011 outlook.
"I tell them it's unbelievable," said John Beutler, of Century 21 Beutler and Associates, on how he describes the market to those who inquire. "And you can take that any way you want."
Following last year's inaugural gathering, The Urban Land Institute hosted its real estate trend and forecast conference Wednesday at the Parkside Center to examine the national scene and predict what the Inland Northwest can expect next year.
The bad news: Commercial real estate will be hurting, both nationally and locally. Vacancy rates are as high as ever.
The good news: The residential market has bottomed out, and improvement could be on the way.
"We're not in a good place," said Dean Schwanke, senior vice president and director for ULI center for capital markets, about the nation's real estate outlook, "but we're trying to turn the corner."
While next year's market is an improvement over last year's dreary 2010 forecast, Schwanke advised the group of 70 guests to "temper expectations" for the coming year.
But there are signs of life. People prefer infill districts neighboring downtown in the new economy over the big spreads on the outskirts. People who lose or move from homes have moved into apartments, increasing that demand.
"The apartment market is the one bright spot," said John Stone, of John Stone Development, about the increased demand at the local level as well. "It's been a real turnaround in that area."
Beutler, Stone, Jim Lemieux, senior manager of Potlatch Corporation and Randy Barcus, chief economist for Avista Corp., comprise the panel that relays what the local market could expect.
The commercial sector generally lags two years behind residential, and the residential market is on its way up. Gone are the robust days of the multi-million dollar secondary home being somewhat the norm, but for the first time in three years, Beutler's business has noticed an increase in sales. While distress sales skew the market, the appreciation from 2001 is around 3 or 4 percent. Not the boom years of 2005, but an increase.
"We're at the bottom," he said.
Uncertainty in the banking and taxing worlds has hamstrung the market. Tight lending requirements make movement difficult, and questions about whether the Bush tax cuts will be extended are variables yet to play out.
"The days of the credit purchase are pretty much over," Lemieux said. "It's a buyer's market, but you have to have the money."
But the unknown could be an opportunity, Schwanke said. Idaho could look to California and neighboring states to recruit businesses searching for more stable economic ground.
"In some respects we're better off in North Idaho and eastern Washington because we didn't crash as badly as other places," Barcus said after the presentation. "We have uncomfortably high vacancy rates, but it's half of what other places are experiencing. We need to remember we haven't had the meltdown other places have and that's a good thing."