A new decade begins
One of the great things about a new year is just that, its newness. It offers a clean slate and a chance to start over, building a better year than the last. Yet, as we begin the new year the prospects are cloudy. As we seek the bright spots in the real estate market we do see some glimmers of hope.
The signing of the tax cut and stimulus package of late 2010 is touted as containing measures that will "spur economic recovery." For commercial real estate at least there looks to be some benefit. Two tax extensions that may influence this segment of the market are the 15 percent tax rate on capital gains and the 15-year depreciation period for leasehold improvements. While these measures are not new, their extension does relieve some of the uncertainty that may have prevented investors from moving forward on the acquisition of properties. The commercial sector should benefit as, at least for the immediate future, the fear of increased taxes or the lack of deductions is abated.
Locally, we saw the passage of Kootenai County's comprehensive plan which will bring closure to some uncertainty there. Much of the restrictive language that caused developers pause has been eliminated and the density issues that were included in previous drafts has been left to planning and zoning ordinances where we believe they belong.
The National Association of Realtors (NAR) projects continued modest growth in the housing sector. Pending homes sales rose late in 2010 providing some cause for optimism that we will continue the slow climb out of the housing downturn. 2010 closed ahead of 2009 in total number of sales for the Coeur d'Alene Multiple Listing Service, the second consecutive year of increases.
According to the NAR's chief economist, Lawrence Yun, historically high affordability is boosting sales activity. The lower priced homes and super low interest rates have made a difference across the country. Our area is no exception as we see investors actively pursuing foreclosure inventory. Some recent foreclosure listings have created multiple offers leading to sales above the asking price for these undervalued properties. This is a phenomena seldom seen since the frenzied market of the recent real estate boom years.
New delinquencies on home loans declined late last year. Although more foreclosures are sure to hit the market the number appears to be slowing. As these properties are purchased, removing them from inventory, prices of non-delinquent properties should stabilize further. Locally, we have seen some stabilization although prices remain slightly below 2009 levels for most property types.
We can all agree that more jobs are needed to revive the economy. Thursday the Department of Labor released data that showed a decrease in jobless claims to the lowest level since 2008. Some experts believe this dip indicates a return to normalcy in unemployment. If true, more people are returning to work placing more people in a position to buy real estate eventually.
As we begin the new year, actually the new decade, we continue to monitor activity locally and nationally and we remain optimistic about the future of real estate. For up to date figures on the market in your neighborhood, ask your Realtor.
For a safe trip home, call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker, Realtor and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664 with your questions or commentary.