Good news hard to ignore

We are as delighted as anyone that there is good news about the real estate market at almost every turn. The national television news has recently featured two stories on booming housing markets. Even so, we are reluctant to predict similar activity locally. True, we are selling more real estate these days. One newspaper reported that we didn't think foreclosure activity had dampened sales. Well, I guess that is true, because we continue to outsell our previous year, but foreclosures have had an effect on prices.

Any seller with property on the market will tell you that they are competing with the foreclosure market. We are however, seeing reductions in inventory at all price levels. This is of course, good news. With prices falling near those of pre-boom years and interest rates increasing modestly, we expect activity to continue to improve. Although the conventional loan rates increased this past week, rising to just over four percent, the rate for government backed loans remains at 3.75 percent - at least for the time being.

It stands to reason that rising interest rates will compel the undecided to decide and that we will see a spike in activity related to the increase. Whether or not this increased activity will compel reluctant sellers to put more inventory into the market is not so easy to determine. When we look at the residential activity for all types of residences - manufactured homes in parks to lakefront homes - we are delighted to see that our number of sales is outpacing last year by nearly 11 percent. However, our dollar volume for the year is below last year by just under ten percent. So, at least for now, people are buying cheaper, on average, than they did last year. At least they are buying.

The National Association of Realtors reports that, while February sales slipped after a strong January, the year to date figures are still well ahead of last year. Lawrence Yun - guest speaker at our February Real Estate Market Forum - NAR chief economist, said underlying factors are much better compared to one year ago. "The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market," he said. "Although relatively unusual, there will be rising demand for both rental space and home ownership this year. The great suppression in household formation during the past four years was unsustainable, and a pent-up demand could burst forth from the improving economy."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record low 3.89 percent in February, down from 3.92 percent in January; the rate was 4.95 percent in February 2011. So even at this week's 4.08 percent rate for conventional loans, a mortgage is still a bargain by historical standards.

NAR President Moe Viessi said market conditions are improving. "Supply and demand have become more balanced in more markets, but with tight supply in the lower price ranges - particularly in the West," he said. "When markets are balanced, we normally see prices rise one to two percentage points above the rate of inflation, but foreclosures and short sales are holding back median prices."

With nearly 70 percent of our local sales this year under $200,000, we could experience that same phenomena.

When we began this column four years ago it was because what was happening nationally wasn't happening local. As the real estate market appears to be slowly recovering, we find we are experiencing many of the same things being reported on the national news. Now, bring us that housing boom we have been hearing about!

Trust an expert....call a Realtor. To find a Realtor to represent you visit the Coeur d'Alene Association of Realtors website; www.cdarealtors.com . There you can also search available properties in the Multiple Listing Service.

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 commentary and feedback. You may contact them by calling 667-0664 or by writing to them at 409 W. Neider, Coeur d'Alene, 83814.