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Broker: Housing market ‘won’t plummet’

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Coda Lane — Jennifer Smock said that Windermere / Coda Lane Realty’s girlfriend and her team are often asked the same question lately.

What about the housing market?

What can you expect?

What should we do?

She said she couldn’t answer those questions with absolute certainty, but she offered this:

“The value won’t plummet,” she said. “But certainly, we see a flat in value. The market has pivoted.”

Co-owner and managing broker Smock gave a 30-minute presentation to the Hayden Chamber of Commerce at Best Western Plus School Dareen Inn Thursday morning.

As we all know, the scorching real estate market in most of the Kodalane region in late 2020 and 2021 seems to have made everyone in the world want to move here, and many do so. But it got cold.

The days of buying a home without multiple offers and inspections are over.

Sales are sluggish due to inflation, recession concerns, volatile stock markets and rising mortgage rates.

Increasing inventories and lowering home prices are becoming more common.

“Things are starting to change a lot,” Smock said. “Pivot is what I call it.”

Still, prices have been rising for just a few years.

According to Smock, most Kootenai County homes sold in the $ 200,000 to $ 300,000 range in 2019. 34% ranged from $ 300,000 to $ 400,000 and 12% ranged from $ 400,000 to $ 500,000. Only 1% were in the range of $ 750,000 to $ 900,000.

Most homes sold this year, 51% ranged from $ 500,000 to $ 750,000, 25% ranged from $ 400,000 to $ 500,000, and 10% ranged from $ 750,000 to $ 900,000. Only 4% were in the range of $ 300,000 to $ 400,000.

Homes ranging from $ 200,000 to $ 300,000 currently exist only as mobile phones on leased land, Smock said.

Last year’s average selling price for less than two acres in Kootenai County was $ 514,000. This year is $ 601,000.

Over two acres of residential real estate last year was $ 775,000. This year it’s $ 923,000.

Construction has also slowed down.

Last year, Kootenai County issued 1,305 building permits for single-family homes, 500 for remodeling, and 47 for apartments.

This year’s county has 439 building permits for single-family homes, 249 for remodeling, and 16 building permits for apartments.

Anyway, building is not the answer. Not only is it difficult to find land, but it is also expensive.

Land is valued more than any other real estate segment, Smock said. It’s almost completely out of reach unless the developer has the ability to hold the land for years.

The 0.13 acre vacant lot in Coder Lane was recently sold for $ 350,000. The 0.22 acre site in the Sanders Beach area has recently reached over $ 450,000.

Five years ago, a 5-10 acre lot was about $ 5,000 to $ 6,000 per acre.

“Do you want to guess what it is now?” She said.

Today they range from $ 40,000 to $ 60,000.

She said regulatory costs associated with new construction account for about a quarter of the cost of housing.

“It’s hard for builders. It’s a pain for them because they need to build, right? They need new construction,” he said.

The rise in interest rates (about 5.79% today, almost double the 3% a year ago) had a major impact as purchasing power declined 12% for every 1% higher interest rates.

“A buyer who could afford a $ 600,000 home can now buy $ 500,000, and it will take some time to adapt mentally, right?” Smock said. rice field. “There is a big difference between a $ 500,000 home and a $ 600,000 home.”

Still, Smock said this wasn’t a recession in 2007 and 2008, and people shouldn’t overreact. If you don’t have multiple offers right away, those who sell their homes don’t have to panic.

“This is completely different from the last time. Last time it was a completely different animal,” she said.

Fifteen years ago there was much more inventories on the market and people were “leveraged” by bad lending practices.

She believes housing will rise in the 5-15% range next year, although the current market is sluggish.

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