As mortgage rates rose, the housing stock also increased in County Kootenai, creating more opportunities for buyers.
COEUR D’ALENE, Idaho – The slowdown in the local real estate market is attributed to the creation of home ownership opportunities that have not been available for years, reports our partners at Coeur d’Alene Press.
“Buyers now have the opportunity to spend some time in the decision-making process and have a bit more negotiating power,” said Jennifer Smock, co-owner and managing broker of Windermere Coeur d’Alene Realty / Post Falls. “Sellers can see there is no real rush in the market. They have time to prepare their homes. “
According to Coeur d’Alene Regional Realtors, the number of single-family homes sold in County Kootenai by September was 2,056, 22.1% less than at the same time last year.
According to the Realtors group, the average home price of $ 550,462 increased by 16% compared to September 2021, but fell slightly from $ 555,500 in August.
There are many more houses on the market than a year ago.
Active housing offers as of October 5 amounted to 1,014, which is almost double the 544 on October 13, 2021.
The times when houses received many bids above the auction price are over. And with winter around the corner, it’s a slower time of year when stocks naturally decline.
“Home sellers now have to prepare the houses, show them and set realistic prices if they want to sell their home in less than 90 days,” said Smock.
Lindsay Allen, president of Coeur d’Alene Regional Realtors, said the local real estate market “is at the forefront of a cooling market.” Most cities that experienced a big boom during COVID see a cooling first. Cd “A has been on this trajectory for several months now.”
She said price cuts, cancellations and closed deals are up.
But Allen said, “Homes that are aggressively priced and well-maintained continue to sell out in a traditionally short period of time. Sellers and agents must be really careful not to inflate prices now or you will be chasing the market.
Rising mortgage rates, which exceeded 7% for the first time in 20 years, also changed the picture.
For each 1% increase in the interest rate, the purchasing power of the buyer decreases by about 12%.
“The interest rate hike is one of the main factors that slowed our market down,” said Smock. “When we realized that the first big increase in the market had disqualified many first-time buyers and significantly reduced the amount the borrower could afford.”
Allen also said that interest rates had a huge impact. There was a shock in June, August and October. The Federal Reserve is expected to meet in November and December and two more rate hikes are expected.
A year ago, a buyer may have had a budget of $ 600,000 and an interest rate of 3%, but today’s 7% interest rate gives the same buyer $ 460,000.
“That’s a 30% decline in affordability,” Allen said.
So it expects housing prices to continue to decline.
“We can’t have high stakes and high prices,” Allen said.
Smock expects house prices to continue falling but not to return to pre-pandemic values.
“We still don’t have the necessary supply to create a sustainable market,” she said. “This balanced market, in turn, will stabilize prices.”
While Coeur d’Alene is a great attraction, so are other North Idaho cities. Smock said there is not much demand for the specific area, but home buyers expect quality.
“As our area continues to expand, each city moves closer to the next. Living in remote areas does not seem as far removed from all the usual amenities as it was just 10 years ago, ”she said.
Allen said buyers have more choice and more leverage than a year ago. Even with higher mortgage rates, many find deals, Allen said.
“There is still a healthy number of buyers, both local and out of state, in the market and coming to Coeur d’Alene,” Allen said.
Smock does not see any drastic changes in the real estate market in the coming months and year.
“What 2023 brings will depend a lot on what interest rates do,” she said.
Allen also expects to see more of the same: Increased rates, easing prices, and increasing inventories.
“If inflation remains high, it will affect consumers as well and could keep more buyers off the market,” she said.
Coeur d’Alene Press is the news partner of KREM 2. More from our partners, Click here.
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