Low inventory, high demand fueling higher housing prices

COEUR d’ALENE — When Jennifer Smock makes the 15-minute drive from her Windermere Real Estate office in Post Falls to the Coeur d’Alene office, she plays a game: Count the number of out-of-state license plates on the road.

The highest she’s tallied so far is 13.

“It’s not a big surprise that people want to be here, but in the last month or two it’s just overwhelming,” Smock said Thursday during her presentation at the Hayden Chamber of Commerce’s networking breakfast.

In her real estate forecast before about 40 people, Smock made a few things very clear: People are coming to Kootenai County, housing supply isn’t meeting demand, and prices are rising.

That trend will likely continue, said Smock, managing broker and co-owner of the Post Falls office.

“The story is, there’s just not enough availability,” she said at the Kroc Center. “We’ve been talking about this for years now. It is getting worse almost by the day.”

The government’s stay-home order and shutdown of nonessential businesses in March to combat the coronavirus was expected by many to tank the local housing market. It didn’t.

According to Smock’s PowerPoint program showing a residential snapshot year-to-date, the average sales price in Coeur d’Alene is $370,000; in Hayden, it’s $401,000, while in Post Falls, it’s $341,000, and in Kootenai County, it’s $381,000.

Year-to-date, Coeur d’Alene had 812 active listings; 437 homes sold; Hayden had 381 active listing, 184 homes sold; Post Falls had 794 active listings, 465 homes sold; and Kootenai County had 802 active listings and 1,470 homes sold year-to-date.

Listings are down nearly 25 percent from the same time last year.

Homes are selling for nearly 100 percent of asking price.

“There are very little to no discounts happening whatsoever right now,” Smock said. “Bidding wars are pushing things up even higher.”

Her prediction for what’s ahead: “By the time we end this year, we could very well see an average sales price of over $400,000 or right at it in Kootenai County.”

Because supply is low, those seeking to buy a home should expect to pay close to or even more than the asking price, she said. And they may end up competing with several others to buy that home.

But that’s doesn’t mean sellers can dictate prices

“The home still has to appraise,” Smock said. “That’s where we’re seeing a lot of push back right now.”

She said the county’s working class age population was expected to grow, before the pandemic, by 18 percent in 10 years. The retired-age demographic was estimated to grow by 30 percent over that same time period.

Now, she believes those figures are low.

More families are coming here, and not just from California (net migration to Idaho in 2017 of 15, 756), “but everywhere.”

“We are experiencing heavy call volume from people out of our area,” Smock said. “More so than we’ve ever seen before.”

Kootenai County single-family home sales rose nearly 40 percent from this time last month, Smock said. They were about 400 in January, 450 for each of February and March, about 400 in April and about 500 in May.

Not what was expected when the coronavirus tanked the country’s economy and millions lost their jobs.

“Buyers and sellers, everybody, we were all freaking out, right,” Smock said. “We didn’t know how bad this was going to be, what it was going to look like.”

They do now and prices shot up.

The average sales prices of single-family homes in the county was $355,000 in January, $369,000 in February, about $367,000 in March, $372,00 and then to $382,000 in May.

“That is not sustainable price appreciation,” Smock said. “That is not what we want to see at all.”

Still, she expects housing prices to maintain that upward spiral in Kootenai County, “because people want to move here.”

“With all the people coming in here I don’t foresee that slowing down,” she said.

New construction can’t be built fast enough, either, and is being held back by a labor shortage, she said. Most construction and new growth is in Rathdrum and Post Falls because there is more available land there.

“The demand we have just for our local population is being completely blown out of the water by everybody moving in,” she said. “It is just not enough to keep inventory, to keep up with demand and it is increasing prices drastically day over day.”

Low mortgage rates in the 3 percent range will fuel that market, giving people more purchasing power. She said one FHA buyer locked in rates of 2.875 on Wednesday.

“That is just amazing, on 30 years,” she said.

Homeowners are also choosing to stay longer — 10 years from seven — and opting to refinance, pulling equity from their home, and remodeling instead of selling.

“Anyone selling must also ask themselves, ‘If I sell my house today, where am I going to go?’” Smock said.