Realtors expect home price stabilization

Local home prices keep coming down, reflecting a trend at most major cities nationwide.

But some Realtors believe the downward swing will come to an end locally this year, stabilize and perhaps prices will rise in 2012.

The average prices for single-family homes have dropped 8 percent in Kootenai County - from $179,018 to $164,439 - compared to last year at this time, according to the latest Coeur d'Alene Multiple Listing Service report.

"This year I think we'll see that stabilization that people have been looking for," said Joel Elgee, a Realtor with Coldwell Banker Schneidmiller Realty. "We should get closer to normal numbers."

Year-to-year statistics also show a local decrease. The median price in North Idaho dropped 3 percent from $167,500 to $162,875 between 2009 and 2010 and the average price also dropped 3 percent from $193,077 to $187,160.

Since the peak of the market in 2005, local prices have dropped 25 to 28 percent. However, the slide has been slower than in some states such as California, where it has been nearly 60 percent.

Elgee said the drop is due to normal supply-and-demand factors.

"A lot of it has been because our demand went down," Elgee said. "It is a natural market correction."

High unemployment and tighter lending requirements have kept many people from entering the market.

Foreclosures and short sales - when the lender agrees to accept less than what the buyer owes on the mortgage - have also pulled down home values. While distressed sales dominated headlines, three out of four local sales in 2010 did not involve a foreclosure or short sale, which helped stave off drastic changes as seen in other states.

"We still have a good level of health in our market," Elgee said.

But Elgee senses a change with prices this year.

"There was 15 percent less inventory on the market through the end of February and there was a 3 percent increase in demand," he said. "If those trends continue, we'll see prices go up."

Elgee said national and regional forecasts call for a slight movement in prices - perhaps 1 or 2 percent in either direction.

According to a recent report from Windermere Coeur d'Alene Realty, there were 1,735 active listings in all of Kootenai County and 264 home sales through Feb. 28. Homes were for sale an average of 133 days.

Pat Krug, managing broker for Windermere Coeur d'Alene Realty, agrees there are signs that prices will come up slightly.

"I think there's a lot of optimism out there," she said. "We've certainly seen an increase in our showings."

Analysts expect further price declines in most cities in the coming months.

The Standard & Poor's/Case-Shiller index released Tuesday shows home prices dropped in 19 cities from December to January. Eleven of them are at their lowest level since the housing bust in 2006 and 2007.

The index fell for the sixth straight month.

Home values in Atlanta, Las Vegas, Detroit and Cleveland are now below January 2000 levels. A majority of the metro areas tracked by the index now have home prices at levels dating back to 2003 just as the housing boom began.

The only market where prices rose was Washington, D.C., where homes prices gained .1 percent month over month.

"The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's.

The housing market remains the heaviest burden on the economy, which is showing signs of strength elsewhere. Unemployment benefit applications are at pre-recession lows, consumers are spending more money and manufacturing activity is growing at its fastest rate in seven years.

By contrast, the national housing market is coming off its worst year in more than a decade for sales of previously occupied homes and its worst in a half-century for sales of new homes.

"A lot of people are thinking the best thing to do is to stay put or delay until conditions improve," said Jonathan Basile, economist at Credit Suisse Securities.

The Associated Press contributed to this report.