While no one has the ability to predict what 2023 will bring to our North Idaho housing market with absolute certainty, sometimes past and present indicators can provide us with some reasonable expectations. As many of us have witnessed, North Idaho has experienced significant growth in recent years, with many people moving to the area from other parts of the country. This led to a tight real estate market the last couple years, with low inventory and rising prices.
We witnessed a slight slowing in real estate closings toward the end of 2022, and it is possible that this trend will continue in 2023. The usual factors that impact any market are changes in interest rates, economic conditions, housing inventory, and buyer demand. We have all of these factors at play here in our North Idaho markets.
While interest rates are considered to be at a historically normal range as of early 2023, home prices in Coeur d’Alene, Sandpoint, and surrounding areas have remained at least 20% higher than pre-2020 values, and as of March 2023, those prices do not appear to be significantly dropping.
Economically, the median household income in Coeur d’Alene is around $56,000. This means that many local individuals and households cannot afford to purchase a home at current housing prices. Essentially, we are seeing a large swath of potential buyers, like first time homebuyers, “priced out” of our market, which most likely will result in less buyer demand. Less buyer demand equates to greater housing inventory, which should eventually force prices to decline. By how much? That remains to be seen. Until then, sellers will continue to rely on buyers relocating to the area (which there are still many), or households that already have built equity in their current homes, as the bulk of potential buyers.
As an agent who serves the entire panhandle area, I work with buyers searching in all of the price ranges. Here is what I’ve found: homes listed under $550,000 seem to be highly sought after, and in a more competitive range among buyers. The further home prices rise above this value–which is a sizable share of the available inventory–I am witnessing fewer showings, fewer offers, and longer days on market. However, these properties are still eventually selling when priced at market value or slightly below.
Advice for buyers entering the market: Work with a lender to get pre-approved so that you can understand and utilize your spending power, and are ready to make an offer when you find your dream home. If you are looking in the lower price ranges, prepare for some competition on homes that are listed at or below market value. Your real estate agent can help you identify these properties. If you are shopping higher end homes, enjoy more negotiating power.
Advice for sellers: Understand that you are facing a smaller pool of buyers, who are home-shopping a greater amount of inventory than the prior couple years. If you are needing to sell your home quickly, you should price your home correctly and competitively, and prepare to negotiate with any potential buyers.
Overall, it is important to work with a knowledgeable and experienced real estate professional in North Idaho who can provide insights into the local market and help you make informed decisions about buying or selling property when you are ready to take that next step.
If you have specific questions I can address regarding the current real estate market, or are curious to know what your home is worth, please reach out. I am always eager to chat!
[email protected] 208.242.2288