Hi All, hope everything is going well with you and your family. Sun has finally made it into North Idaho and I am expecting a nice/hot summer. I jumped in Lake CDA this morning – NOTE – it’s still cold. This edition of my NIRE Analysis will focus on:
REAL ESTATE MARKET UPDATE – if you want the charts that I usually send, reply with the request and I will “load you up”
FORECLOSURE UPDATE
SHORT SALE UPDATE
COMMERCIAL MARKET
NORTH IDAHO MARKET UPDATE
Currently there are approx 2844 residential listings in Kootenai County. Current market conditions tell us this is 12.5 months of inventory. 288 units sold last month ($45 Milliion in Volume) up from 177 ($36 Million) one year ago at this time – UP 38% compared April 09’ (in units) –
We have sold 918 units (as reported from MLS) since 1/1/10. The average sold price is 200K. You can expect a house priced around 200K to be on the market 116 days (of course, if it’s priced competitive). If a house is priced above 500K you can expect it to be on the market for 220+ days (upper range HAS to be top 3 in quality and price compared with competition if it’s going to have a chance at selling). The average home will rent for between $900-1150/month.
It will be interesting to see next month’s stats and the effect the expiration of the tax credit has on sales. Further – this came to me from one of my family members regarding the national market…
I went to a real estate conference yesterday. One of the guest speakers was from the Federal Reserve. While I am a little pessimistic about the current market and where it’s going, I was pretty stunned at what this guy had to say (these are his opinions and not that of the Fed). I thought I’d share some of his info:
1. 24% of all homes in the US have negative equity (70% in Vegas)
2. 23% of loans that have been delinquent 12 months - yes, 12 months - have not started foreclosure yet
3. 14.6% of mortgages are NOT current
4. 50% of loan modifications are in re-default after 9 months
5. Hotels have lost 50% of their value in last 24 months - particularly luxury hotels
6. Starting to see consistency in multi-family; however, watch the condo and timeshare market where you buy (eg. timeshares in Orlando can now be rented for $50 per WEEK).
7. Commercial Loans - can’t re-fi overleveraged properties
8. Regional Banks and Community banks own 26% and 47% of their portfolios in commercial loans - banks will continue to be hammered
9. Recovery is 2-4 years away
FORECLOSURE
REO agents are busy this year, and will continue to be for the next 2 years. REO property has accounted for 25% of our sales this year. The average sale price was $153,247 – the price it was listed at when it sells - $160,620. The original list price $171,183. What this tells you – when a bank lists their property and it doesn’t sell in 30 days they drop it 10K until it sells. As a buyer you can expect a 5% discount on the final list price (average bank takes 95.15% of list price). 232 foreclosure properties sold since 1/1/10, for an average of 62 days on the market.
186 Foreclosures on the market now – including pending. See the list below:
SHORT SALES
289 short sales are on the market now, 83 (28%) sold since 1/1/10. Banks are still taking 3+ months to respond, but I have noticed they are responding. Typically they are within 85-90% of market price, however there have been a few occasions where it is less. Here is the link to the short sales:
COMMERCIAL MARKET
333 total commercial listings on the market now. 15 (4.5%) have sold this year (see the list of what has sold here). It’s not looking to good in the commercial realm; however, there are nice commercial development bargains if you’re looking. Contact me for a list if you’re interested.
Thank you for taking the time to review our market conditions and/or look over our listings. If you have further questions or comments or would like to LIST or WRITE OFFERS, please let me know. As always, if you or your family/friends/clients need help with anything real estate in North Idaho, please do not hesitate to get in touch. I am always available and my website is always updated with the latest listings.
North Idaho city is home to many businesses that relocated from expensive metropolitan areas:
The city of Post Falls, Idaho, one of the fastest-growing cities in the U.S. during the 2000s, has emerged as a haven of sorts for companies that seek a business-friendly environment.
Economic development efforts in recent years have been successful in attracting some of the largest private employers in this 25,000-person city, which is located on the Washington-Idaho border between Spokane, Wash., and Coeur d’Alene, Idaho.
“We just continue to prove over and over again that the state of Idaho is the place to be for business,” says Steve Griffitts, president of the Coeur d’Alene Area Economic Development Corp.
In the past 20-some years, 80 companies have relocated into or expanded into Kootenai County, where Post Falls and Coeur d’Alene are located. Collectively, those companies currently employ more than 5,000 people.
Some of the largest companies to open facilities in Post Falls include U.S. Bank, 400 employees; office furniture maker Kimball International, 400 employees; knife maker Buck Knives, 250 workers; and Ernest Health Inc., which operates North Idaho Advanced Care Hospital, with 150 employees.
Griffitts contends that the vast majority of the companies attracted to North Idaho end up relocating to the region. Initially, many of them are looking to expand, but after learning about the region, many decide to bring their entire operation to the Gem State.
Companies considering relocation—most come from Southern California—typically are attracted to four attributes: a business-friendly political environment, affordable housing, high quality of life, and a skilled, trained workforce.
Idaho routinely ranks near the top in national rankings for business friendly states and toward the bottom in terms of states with burdensome business taxes. In fact, Griffitts says, Idaho ranks 49th on a list of states in terms of high business taxes.
“We have no estate taxes and low property levy rates,” says Griffitts. “We’re a balanced-budget state and a right-to-work state. We have city, county and state leaders that understand the importance of business to a state.”
At the local level, he says, government officials also understand the importance of responding quickly. For example, a few years ago, grocery distributor Sysco Corp. announced plans to open two food-distribution centers in the Northwest, one in Post Falls and one in Western Washington. Griffitts says Sysco held the grand-opening ceremony for the Post Falls facility before it had broken ground on the Western Washington facility, which reportedly was held up by regulatory issues.
One attribute that works to the advantage of economic-development efforts in North Idaho is the availability of land along heavily traveled traffic corridors. For example, a 30-acre parcel along Highway 41, one of North Idaho’s primary north-south routes, is flat and undeveloped. It’s zoned for commercial use and can accommodate retail, office, warehouse or multifamily development.
In addition to business friendliness, Idaho boasts a low cost of living and a high quality of life. The median home price in Kootenai County typically hovers below the $190,000 mark, making homes more affordable in the Coeur d’Alene-Post Falls area than in most metropolitan areas.
Quality-of-life attributes include a close proximity and easy access to lakes and rivers, a variety of nearby recreational activities—skiing, snowboarding, fishing, hunting and a myriad of others—and a vibrant local arts-and-entertainment scene.
The trained, skilled labor force starts with strong public schools in North Idaho that feed into workforce training programs at North Idaho College, in Coeur d’Alene, and the North Idaho College Workforce Training Center, in Post Falls. Last September, Kootenai County had an unemployment rate of 8.7 percent, which is lower than the national average but high enough to indicate that workers are available.
During the recent economic downturn, Griffitts says out-of-state companies have been receptive to the idea of moving their companies to a business-friendly place like Post Falls, because they are looking at a variety of ways to save money and operate more efficiently.
“Once people get out of their comfort zone, they are more open to new information,” Griffitts says. “There is more interest now than ever.”
I just listed this 30.17 acre commercial property located on the HWY 41 corridor just off of I90 in the center of a 640,000 population market area including Post Falls, Rathdrum, Spokane Valley, Spokane and Coeur d Alene. North Idaho’s premier commercial development and investment property. Take a look at this North Idaho Commercial property and let me know what you think!
HI All, I have created a link for real estate in North Idaho that is on 5+ acres, treed, southern exposure, creek, pond, or river, slightly elevated or rolling elevation, close to Bureau of Land Management or Idaho State Land, private well or private water supply and somewhat close proximity to small/medium sized self sufficient towns.
Here is a search function you can use to peruse/browse this type of property. You can adjust price/acreage and bed/bath if that is important to you.
Further, you can request that I build a portal for you so you can search and save listings in your own account. Let me know if you have interest in this. Currently there are 74 listings that fit this retreat property/survival property profile. Let me know if you would like further information including plats/topos, maps on any of these North Idaho listings.
Further, I have access to Kootenai and Bonner County building and planning to help you with permits (if you need them) and property splits, builder suggestions, alternative energy systems and set-up, and more. Also, if you are a builder or alternative energy supplier/contractor, or have talents/resources you would like to share and would like to be included in my list let me know. TJB
The North Idaho Real Estate Market has seen an increase in sales the last couple of months – which is not surprising – North Idaho is a wonderful place to be in the summer. 282 units sold in June. The average days on market increased to 137 days and we are sitting on 29 months of inventory (8340 listings). If we compare ourselves with June 08’ we will see a 13% decrease in total unit sales and a 4% decrease in price (221K vs 212K). Not bad considering the nature of current economic conditions. Please see the enclosed PDF files which include a 2 year trend line of real estate inventory, sales and activity, average sold prices for the last two years, asking vs sold prices, ect. Also, included is the Keller Williams Total Market Overview. This gives all listing, pending and sales activity in every price range. Notice the pick up in activity in the $200-250K price range. I also have Market Overviews for each area and segment in our market (Condos, Post Falls, Sandpoint, Waterfront, Multi-Family, 1 Mil Plus), just let me know what you want and I will send it to you immediately.
REO LIST (84 Active, 8 Pending – 23 sold last month)
Foreclosures and Real Estate Owned by banks continue to keep downward pricing pressure on our active listings. The availability of foreclosures continues to increase every month, with more than a 20% pending ratio! See the list below:
http://www.flexmls.com/link.html?ot50u7tjy8e,7,1
Short Sale List (188 Active, 21 Pending – 19 sold last month)
I ran all the short sales sold in the last year. 70 total. Sellers ON AVERAGE reduced their prices 10% since initially offering their property. Then they averaged a 3.55% price reduction from the bank while in negotiations. This tells me that agents are getting the prices on the short sales below appraised value and close to what the banks will accept. View the list of short sales here:
http://www.flexmls.com/link.html?ot50ucmw7aj,7,1
Waterfront Listings (84 North Idaho Waterfront Listings)
Summer is a great time to be in North Idaho. Here is the latest in waterfront listings.
http://www.flexmls.com/link.html?ot512zgi5s8,7,1
The commercial market is engaging a record $480 BILLION in debt coming due. This is a large number (up to 10X) compared to the residential market!
“…thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies. The reason: according to research firm Foresight Analytics LCC, $530 billion of commercial mortgages will be coming due for refinancing in the next three years — with about $160 billion maturing in the next year. Credit, meanwhile, is practically nonexistent and cash flows from commercial property are siphoning off.”
Why, you ask, does this affect the market? Well, if you own a commercial property, and you have a balloon payment coming up, traditionally you would refinance, and start the process again. The availability of funds to refinance has dried up and terms have gotten tougher. Understand the issue? It is going to put a strain on banks ability to fund not only commercial but residential, credit lines, ect… This may present some distressed sales/foreclosures in the commercial arena. STAY TUNED. To view the available commercial inventory now, visit my site updated nightly with newest listings:
News out concerning the national sales data compiled for May. 1 in 3 homes sold was a foreclosure or property in a distressed sale. This is keeping sales prices down, but number of sales up. Locally, in North Idaho - Kootenai County specifically, we had 241 residential home sales in May. 25 of these were REO (Real Estate Owned) properties, 5 were short sales. 12% of our sales being distressed. This tells me that sellers of property are pricing their homes aggressively to compete with the distressed sales. Further, this is also telling me that banks are not just “dumping” properties but holding out for higher prices, getting into the real estate game. There are currently 84 REO properties on the market now. Let me know if you want a foreclosure list. Here is the rest of the article:
I have grappled with this concept for the last couple of days, I figure now is the time to take a stab at explaining inflation effect on property owners, investors, and property buyers. I am no economist, just curious. First of all, I need to explain inflation in my simple mind. Inflation is the price of goods/services going up as a result of the increase in money supply - a decrease in purchasing power. As the FED prints more money it dilutes the value of the money currently in the market driving up prices of goods and services. As a counterbalance to the rise of inflation, the government and/or market raises interest rates. Somehow, unemployment, output and productivity come into play as well.
INCREASE IN FORECLOSURES - Now, as the price of goods and services go up, property owners have to spend more of their income on these items reducing the amount of disposable income. Homeowners that are at the edge of their expenses who do not have savings, become unemployed or have not had increases in salaries will be pinched on making mortgage payments. When a person has to choose between food for family or mortgage, the food will probably win. There will be an increase in foreclosures. Take into account adjustable mortgages as well, when interest rates reset, payments go up making the pinch and foreclosure statistics a whole lot worse.
BIGGER POOL OF RENTERS - When people lose their homes, they are still going to have to have shelter. I think investment properties, rentals, will have a steady availability of tenants. We are seeing this now in North Idaho. Leases/rents are negotiable and reset after a set period of time investors can increase rents based upon inflation creating a hedge that a typical homeowner cannot.
INVEST IN ASSETS THAT CAN PAY OFF YOUR DEBT - Creating hedges in an inflationary environment is key to wealth protection. Inflation hedges include tangibles and goods (commodities). Land and property is definitely an asset but you have to buy right. Finding property deals that are close to the bottom as possible is key. Any good agent can give you a synopsis on the current market conditions in the area you would like to purchase. Good indicators would be level of foreclosures and short sales, active price ranges, and amount of solds/pendings in each price range.
HYPERINFLATION (a long shot) - Lets say hyperinflation comes around - that is - huge increase of inflation month over month. The value of money changes drastically and becomes worth less and less (i.e. it takes much more dollars to purchase the same thing). It makes sense if you have tangibles that increase at the same rate, if you owe 200,000 on your property and a pound of gold is worth 200,000 you can sell and pay off your house. I see having debt as being a plus in a hyperinflationary environment, AS LONG AS, you have assets, tangibles, goods that can counterbalance. The value in this for example, is now you can buy pound of gold for under 16,000. You have got to have a means to create income that is adjusted to inflation on a daily basis.
IN SUMMARY - The key to inflation and the housing market on you, the property purchaser is to make sure you get the best deal you can on a house you have interest in. Be aware of what is on the market, and the direction the market is headed in you area. Act in front of the market. Your real estate agent should be able to help you with local housing information. If you can get a loan, buy an investment property in foreclosure or one that is priced right. If your the property SELLER, get your price in front of the market now! That is where the buyer pool is. If you are backwards in value to loan on your house, shortsale it. Banks are taking losses on their loans, freeing up homeowners that could go into foreclosure. Good luck and let me know if I can help!
Now is the time to buy real estate in North Idaho. Interest rates at an all time low, inventory at a max, incentives from the federal government. This is the buyer “perfect storm.”
