Realtors optimistic about 2011

Don "Pepper" Smock sees hope on the local real estate frontier.

"For three years the national media has informed us that the housing market is bleak," the president of Windermere Coeur d'Alene Realty said. "However, the Realtor who showed up for work every day anyway and worked on their business enjoyed an abundant market in 2010.

"Am I optimistic? Absolutely. Success in the 2010 challenging market leads me to believe we can do it again."

There were 1,610 sales of single-family homes in Kootenai County in 2010, 5 percent less than the 1,695 in 2009, according to a recent report from the Coeur d'Alene Multiple Listing Service.

While a decrease for the year overall meant a more challenging market, there are signs of the market loosening up lately.

For example, according to a Windermere report, there were 204 residential sales in December compared to 196 during that month in 2009, 167 in 2008 and 199 in 2007.

Total vacant land sales were up 74 percent (200 to 349) from 2009 to 2010, residential with acreage up 37 percent (182 to 250), multi-family up 17 percent (41 to 48) and waterfront 9 percent (50 to 55), the Windermere report states.

"We have a lot to be grateful for," Smock said.

Meanwhile, new construction sales experienced a large change in 2010. Sales in that sector were down 29 percent from 2009, yet prices increased by 9 percent.

Still, Pete Faust of Century 21 Beutler and Associates, agrees it's not doom and gloom.

"I think the market is OK even though certain segments of it such as new construction need all the help they can get," he said. "The real winners were homes on acreage, being stick built or mobile, condos and anything on or near the water."

The average price for a single-family home dropped 3 percent to $187,160 in 2010 compared to $193,077 the year before, the MLS report states.

The Windermere report breaks the average pricing down according to the types of homes with steep declines in waterfront ($670,904 from $772,704), multi-family ($189,258 from $342,938) and vacant land ($90,610 from $153,185).

"The affordability is better than it has ever been with interest rates below 5 percent and a good inventory," said Pat Krug, Windermere managing broker.

The average prices increased for new construction ($216,921 from $196,388) and residential with acreage ($323,609 from $320,453).

Krug said the market has had "significant stabilization" in the past six months.

"In most categories from June to December there was an increase in values," she said. "To me, that says we may have hit the bottom through the summer months and are starting to stabilize. I think we have a relatively stable market right now."

That's a change from the previous two years when there was a downward spiral.

Another positive note is that about 75 percent of the sellers in 2010 were not in distress, meaning they lost their home due to foreclosure or had a short sale (selling a home for less than what is owed).

Short sales decreased 3 percent in 2010 compared to 2009, while sales of bank-owned properties increased 14 percent.

"They flipped," Krug said. "Unfortunately, a lot of properties attempting to be sold as short sales did not get through the process. Banks couldn't keep up with them."

A buyer's perspective

Investor Lisa Gallipoli of Coeur d'Alene said she's seen big differences as a buyer between last year and this year.

"There's a lot to see on the market right now," she said. "There's a huge spectrum of property. More options make it more difficult. Last year when we looked everything seemed clumped together and very comparable."

Gallipoli said she also made her purchase faster last year.

"We bought a duplex with a short sale within two weeks," she said, adding that she's been looking this year for about a month.

She's also found that sellers are not wanting to negotiate as much this year.

"I don't feel the same motivation or urgency from sellers this year," Gallipoli said, adding that one wouldn't budge on the price and the other came down 5 percent. "It seems to me that last year the sellers were more motivated."

Krug said buyers should be aware that times have also changed with the loan qualifying process.

"Loan qualifications are much more stringent than they were a few years ago," she said. "Loans are available, but you just have to follow all of the rules to get them."