Reflection

As we look back on 2013 we must begin with the third quarter of 2012 as our starting point. November of 2012, interest on real estate loans hit an all time low and aided our recovery as market-wise buyers realized that rates were not likely to go lower. These interest rates would hold, hovering below 3.5 percent into early 2013.

Not only were interest rates low, but we had a good inventory of distressed properties offered at bargain prices. As buyers entered the market the absorption of these homes began to accelerate. Competition from investor buyers left many would be home owners pining for a home. Once they had made the commitment to jump into the market losing a home or two in a bidding war seemed to merely whet their appetite and many continued to search, committed to taking advantage of our historically low rates.

The thirst for low cost housing got the attention of builders and as our housing inventory shrank - sticks that would become houses began to appear on vacant lots to appease the newly refreshed market. Many homeowners, recognizing the opportunity to sell homes they had kept off the market during the recession felt encouraged and began to offer those homes for sale. Once on the market, if priced right, those homes sold solving for some the distress they had endured as their values rose once again to more than they owed.

In many cases, the sellers of smaller homes, and in some cases larger ones, were able to move up (or down) into a home that suited them better. Prices were still low and with low interest rates a family could afford a larger home at a lower payment than one they may have found to be a burden a short time ago.

Interest rates began a slow climb and with the depletion of inventory, so did home prices. Across the Coeur d'Alene Multiple Listing Service (MLS) our average price increased 11 percent by November's end on top of a 4 percent average price increase in 2012. Our number of home sales increased a full 22 percent and surpassed our sales numbers of 2007, a peak year for prices. That is on top of the 7 percent increase delivered in 2012.

This could mean, should the trend continue, that those who bought at the pricing peak of 2007 will be made whole in 2014 and will then be able to move up or down in the market while improving their month-to-month budget position even though interest rates are rising. This will add them into the buyer pool that at this point seems healthy.

We have seen interest rates increase a full percentage point since the all-time low of November 2012 but by historical measure they remain extremely low. We continue to see interest in well-priced real estate even through this holiday season, an anomaly not seen in recent years in which interest in real estate was low, even with low mortgage interest rates.

The recent report that in Kootenai County, in fact the state of Idaho, unemployment rates are the lowest in recent years encourages us, as does the continued interest in our area real estate. Interest rates may continue to rise (slowly) throughout the coming year and the prudent will act early - the investors will act often - before full recovery is announced and those rates become what most will agree are "normal."

We wish you all a prosperous 2014 and the best of fortune for you and your families.

Trust an expert ... 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 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