COEUR d’ALENE — A slowdown in the local real estate market is believed to have created homeownership opportunities that have been unavailable for years.
“Buyers will have more time in the decision-making process and will have a little more bargaining power,” said Jennifer Smock, co-owner and managing broker of Windermere Coeur d’Alene Realty/Post Falls. “Sellers realize they don’t have to rush to the market. They have time to get their homes ready.”
According to Coeur d’Alene Regional Realtors, 2,056 single-family homes were sold in Kootenay County through September, down 22.1% from the same period last year.
The median home price was $550,462, up 16% compared to September 2021, but down slightly from August’s $555,500, according to a group of realtors.
There are far more homes on the market than there were a year ago.
There are a total of 1,014 active home listings as of October 5, nearly double the 544 on October 13, 2021.
Gone are the days when homes received offers for more than the list price. With winter approaching, it’s the slowest time of the year when stocks naturally deplete.
“Home sellers need to get their homes ready, show they are ready, and set a realistic price if they want to sell their homes within 90 days,” Smock said.
Lindsay Allen, president of Coeur d’Alene Regional Realtors, said the local real estate market was “at the forefront of a market cooldown. Most of the cities that saw big booms during COVID were the first to see the cooldown.” .Cd “A has been on this track for several months.”
She said markdowns, cancellations, and closing deals are on the rise.
But Allen said, “Aggressively priced, well-maintained homes are selling in the short-term that they have traditionally been. You have to pay attention or you’ll be chasing the market.”
Mortgage rates rose above 7% for the first time in 20 years on Thursday, changing the picture.
For every 1% increase in interest rates, the purchasing power of buyers decreases by about 12%.
“The spike in interest rates is one of the main factors that contributed to the market slowdown,” said Smock. “When we noticed the first big uptick in the market, we disqualified many first-time buyers and significantly reduced the amount borrowers were able to pay.”
Allen also said interest rates had a big impact. There were bumps in June, August and October. The Federal Reserve has his November and his December, plus he has two rate hikes due.
A year ago, a buyer had a budget of $600,000 and an interest rate of 3%. Today, at 7% interest, you can pay the same buyer $460,000.
“It’s a 30% hit to affordability,” Allen said.
As such, she expects house prices to continue to fall.
“High interest rates and high prices are unacceptable,” Allen said.
Smock expects home prices to continue to fall, but not to return to pre-pandemic prices.
“We don’t have enough supply yet to create a balanced market. This balanced market keeps prices stable.”
Coeur d’Alene is a big draw, but so are other towns in Northern Idaho. Smock said there is no strong demand for any particular neighborhood, but rather homebuyers are looking for quality.
“As our region continues to grow, each city gets closer to the next. I can’t see it,’ she said.
Allen said buyers have more choice and more influence than they did a year ago. Even with higher mortgage rates, many people are finding deals, Allen said.
“There are still quite a few buyers in the market, both local and out of state, coming to Coeur d’Alene,” Allen said.
Smock doesn’t expect a dramatic change in the real estate market in the coming months and within a year.
“What happens in 2023 will depend a lot on what interest rates do,” she said.
Allen also expects more of the same, including higher interest rates, softer prices and rising inventories.
“If inflation remains high, it could affect consumers and push more buyers out of the market,” she said.