Even though we encourage feedback from readers with regard to content for this column, we seldom receive it. It is indeed a pleasure then, to attempt to address a number of questions from one particular reader. The reader writes, “What does history teach us about how long it will take for inventory of high-dollar homes to reach ‘neutral’ instead of buyer’s market status?”
Of course many factors come into play. Our determination of buyer’s vs. seller’s market is based on months of available inventory. A balanced market is somewhere in the range of a five months supply. At the end of April, we had 86 residential listings in the $1 million to $2 million price range. This represents a 43-month supply. At our current rate of absorption (sales), it will take about three and a half years to deplete that inventory. This is if no other homes enter the market in that price range.
Should market conditions change and the higher end homes become in demand, that will impact the supply and tilt the advantage to the sellers as supply becomes depleted. No doubt we will see new homes begin to rise as luxury developments build out. Most homes in this price range are built at the behest of people who have specific requests for style and size, fit and finish. These folks may look too at existing homes seeking bargains they can retrofit to their liking. With 86 homes to choose from, one would hope several would be desirable to those seeking that size of investment.
The reader inquires, “If people are “pouring into” the greater Coeur d’Alene area as your May 14 article claims, where is the more affluent component seeking ‘nicer’ homes? Of those who do arrive here and begin looking for a home are they looking for different characteristics in a home today than 10-20 years ago?” Many folks who build new homes in all price ranges do so because they cannot find an existing home that suits their tastes or lifestyle. Twenty years ago most homes were not wired for internet. Some were wired for sound. Now, people expect both in high-dollar homes.
Certainly décor changes. Paint is an easy fix, but types of flooring, counter tops, cabinets, doors and trim will be expensive retrofits. A “dated” home will not sell for as much nor as fast as one that meets current design trends.
As to “where is the more affluent component?” they are here. Unlike the middle of the first decade of this century though, they are likely still heavily invested in the stock market. In the past real-estate boom, the market was failing and people were looking to put their money into something more stable — like real estate. Now, with the stock market stable and improving most days, investors are not as compelled to bail out and plant their investments into something less liquid. Rather they may just make this one of their vacation spots to enjoy their dividends rather than acting as stewards of their fortunes.
“Are there any buyers still around who seek a ‘traditional’ floor plan (formal and informal dining areas) rather than the ‘great room’ plan?” Opinion: The design trend of the last several years has been to open up the kitchen so the chef may continue to engage with family and friends while preparing delicious meals. Many great room plans also have a separate and formal dining room for entertaining guests in a less-casual setting. We are sure there are buyers for every home out there since they have served someone well prior to going on the market. People buying higher-end homes can afford what they want. No matter what your price range, it isn’t necessarily that no one wants your house, rather it is that they do not want to pay as much as you are asking for what you are offering when there is so much competitive inventory.
Thank you for writing. We are always glad to share our opinion in this space.
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.
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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.