As reported in this paper on Friday, the real estate market is healthy but not to the extent where members of the Coeur d’Alene Association of Realtors are fearing a bubble. Even though 2016 sales exceeded the historic high year of 2005 in the number of sales people are actually required to qualify for a loan by proving income. That is a requirement lacking in the bubble period just prior to the Great Recession.
For the third week in a row, mortgage interest rates have fallen. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average dropped to 4.09 percent with a 0.5 point average fee. Each points paid to a lender is equal to 1 percent of the loan amount. The 30-year rate was 4.12 percent a week ago and 3.81 percent a year ago. This fixed rate has fallen 23 basis points in the past three weeks or 0.23 percent. This comes as a welcome surprise to prospective buyers who felt they had missed the boat when 30-year rates reached 4.32 percent in December.
Still, the Mortgage Bankers Association reports fewer mortgage applications this year-to-date than last. In our immediate market areas — those served by the Coeur d’Alene Multiple Listing Service — a good part of the problem is attributed to chronically low inventory. At year’s end, we anticipate some attrition of inventory due to the lack of interest in showing homes over the holidays. Many people, and their agents alike, are under the impression that no one is seriously looking at property during that time of year.
As of the end of December 2016, we had a total of 1,948 residential listings actively for sale in the MLS. As of Friday we had 1,664. This reflects all single-family residences listed for sale in all price ranges. Keeping in mind the average home price that makes our markets affordable is about $240,000, we searched for available residential listings that fell below that price range. We found 619 listings with 100 of those already under contract.
Taking a look at homes $300,000 and above, we see 200 more houses to choose from there than in our average priced inventory and price ranges where most first-time buyers will be qualified. Divide those 519 actively on the market listings by city or area and you begin to realize where the frustration lies. Our MLS lists properties from Spokane to Shoshone and Boundary to Benewah counties and is inclusive of that area. If you were a buyer and had cause to live in a specific area due to family obligations or a reasonable commute you certainly would relate to the frustration buyers are experiencing.
That is good news for sellers. Those that have been waiting for equity have already achieved that. There should be extremely few homes in the average price range that are still under water as year after year of appreciation has brought the real estate market under our jurisdiction out of the recession. Economic basics tell us that when supply is low and demand is high, prices continue to rise.
It is true that new houses are being built, but it is also noted that the bulk of those are confined to geographies where not everyone wants to live. If you are a homeowner thinking of selling, we have more than 1,000 agents waiting to help you get the best price. If you are a frustrated buyer, be aware we are looking daily for more inventory to offer you.
Trust an expert…call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker and the spokesman for the Coeur d’Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d’Alene Association of Realtors, 409 W. Neider, Coeur d’Alene, ID 83815 or by calling (208) 667-0664.