Posted: Mar 12, 2007  13:22

By: Jessie Sheldon



When headlines regarding national Real Estate trends include terms like "Decline," "Bubble," and "Crisis," many people in North Idaho wonder what this means for real estate here in their community.

Christina Ethridge, a real estate specialist in Kootenai County focusing on the North Idaho Market, reassures locals that real estate in the Coeur d' Alene area will continue to appreciate. She predicts this appreciation will be about 8 % in 2007. In her on line blog (www.northidaho.realtownblogs.com), Ethridge says that the market here has always been consistent. The usual pattern is to "have jumps and then maintain, then jumps and then maintain. The last 3 years have been jump after jump after jump. It seems like we should be heading for the maintain but every indicating factor just doesn't point to that."

She believes that between low unemployment rates and an increased amount of construction as well as an increase in buying, we will continue to see a rise in the real estate market here.

But, the real estate market is a little different in each community. In order to get a better idea of what is going on in the real estate market in Boundary and Bonner Counties, I spoke with Donna Capurso, owner and broker for Selkirk Mountain Real Estate in Bonners Ferry. She believes that North Idaho's market has declined, following a decline in home sales nationwide, due to affordability problems, investor flight, psychological factors, and media scare. However, the decline in the market here is small compared to areas in Arizona, Nevada, South Florida, and Las Vegas where the price of property has recently declined more drastically.

Capurso says that despite media scare, North Idaho has always had a healthy market. "When North Idaho became 'discovered' a few years ago, in particular the Sandpoint area, there was an unsustainable buying frenzy of homes and vacant land. For approximately 18 months, home prices were escalating at 5% per month, and vacant land at 7.3% per month, with instantaneous multiple offers on properties that were priced right.

"The market is correcting itself," she continued, "with prices stabilizing if not dropping. With fewer buyers making purchases, the market tends toward being a 'Buyers Market'. The consumer wanting to sell his home in a reasonable amount of time needs to be aware of having his property positioned correctly in a transitioning market."

Despite this, Capurso does not believe that the market will remain a 'Buyers Market' for long and that with job growth will come an increased housing demand. She believes that other factors affecting the market are more first time buyers, favorable population growth, longer life spans for retirees, and interest rates remaining in the single-digits.

"The number of households is expected to grow nationally by 15 million over the next ten years" she pointed out. "There is an abundant inventory now, but as the market changes, there will be fewer choices later. Right now is a good time to invest in real estate, as there is more negotiating room. Many sellers offer incentives such as closing costs, move-in dates, amenities, and more."

"Buyers have been sidelined by a multitude of conditions, but as confidence is regained, sales will start back up again. I don't believe this is a 'bubble' that will burst, but rather a balloon that expands, loses a little air, then gets blown back up, even larger than before." said Capurso.

Capurso believes that the cooling market was influenced by speculative investors, exotic mortgages, and a decline in second home purchases. However, she believes there are several nationwide signs that will lead to a recovery in the market. Some of these signs, she states, are stabilized pending home sales, builders cutting production, stabilized mortgage applications, falling mortgage rates, improving housing affordability, and a fall in home inventories as well as the fact that housing provides long-term gains (For example locally there has been an 88% price gain in the last 10 years).

Another issue currently facing many North Idaho residents is the cost of living and wages in the area, which are not in line with housing prices. Capurso believes that this situation is created as a result of the quick rise in home prices over the past few years.

"Since the assessed value and market value are supposed to be the same according to the State, when properties are reassessed, property taxes are mostly likely to increase. In addition, when there is an influx of people to an area, more infrastructure has to be increased, i.e., police and fire services, schools, roads, etc., and all of these services have to be paid for. This burden tends to fall on the property owner." said Capurso.

Regarding the influx of people to the area, Capurso has seen a difference between counties. In Sandpoint, in particular, most buyers were out-of-state and primarily from California. However, Boundary County has a bit of a different picture as many Sandpoint 'locals' are relocating to Boundary County.

In Capurso's opinion, the 'small-town' atmosphere of Sandpoint has changed dramatically since she moved to north Idaho ten years ago.

"One thing is for sure, there will always be people who fall in love with the beauty of this area and want to spend the rest of their lives here" said Capurso, and "Baby boomers are looking for that perfect retirement location. I cannot tell you how many people I talked to while working in Sandpoint that drove across the Long Bridge, and knew they had to find their little piece of paradise. Purchasing real estate is quite often an emotional response, whether it be a house, the area, or their perception of the lifestyle of living in 'the north woods'", she concluded.
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Jessie Sheldon works as a freelance writer in her spare time. A graduate of Santa Clara University with a BA in English, she has held jobs as a counselor, probation officer, and reporter since graduating in 2001. Originally from Santa Cruz, California, she moved to Idaho in 2002. Although Sheldon is currently staying home as she is 8 months pregnant, she plans on continuing her career in writing while also homeschooling her 6 year old daughter April. She has been married to her husband Ryan for 8 years and the couple look forward to the birth of their son in the near future. She welcomes ideas for future articles.