Real estate market remains strong
By R.J. COHN
Sales decline as average home prices increase
SANDPOINT -- Don't think for a New York minute that Bonner County 's real estate market, which took off like a Roman candle 16 months ago is coming to the end of its wick.
If its flame isn't the record-setting torch that touched off a buying frenzy among buyers, Realtors say there's still a lot of fire left in a market that saw the price tag of the average Sandpoint home soar to $228,573 between 2003 and 2004.
"We'll not be seeing the same kind of numbers selling at the same rapid rate as last year, but sales now are for higher prices," said Sue Brooks of Tomlinson Black, who sold more than $2.5 million of real estate last year in her first year as a Realtor. "Many people thought this was going to be the 'Second Year of the Wave,' and a lot of properties went on the market overpriced but they've come down.
"We're not even close to being in the bubble-burst area," she said. "We're still a bargain to a lot of buyers."
While the Selkirk Association of Realtors say there's almost twice as much inventory on the market than last spring -- about 700 residences and 500 parcels of vacant land -- area Realtors and industry leaders say properties are not selling at the rapid clip they did not long ago.
But it's also nothing to get nervous about.
"The increase is slowing down and prices are leveling off, but I doubt we'll ever be in the real estate doldrums we were once mired in," said Jeanne Jackson-Heim, the association's director.
While she said the median price for a Sandpoint residence is $185,550 and the average sales price fetches $228,000, homes are generally staying on the market for about 90 days -- except for waterfront property, which she said doesn't last long.
"Our sale prices are still below the national median," said Jackson-Heim. "When we got 'discovered,' no one knew about us and we were a real good value. We still are."
Realtors like Brooks and Mark Hall feel Bonner County 's real estatemarket is far from done and has a long way to go until it's played out -- if it ever is.
"Unfortunately, the average Sandpoint buyer is becoming priced out of the local market," Hall said. "It's almost exclusively out-of-area buyers who are finding this market easier to get into than others around the country, where sellers are used to buying property, flipping it in a few years to double or even triple their money. That's pretty difficult to do here, though."
Even as real estate nationwide as a whole has stayed robust, some once red-hot markets have cooled considerably more than Bonner County 's. Both San Diego and Las Vegas -- two of the hottest markets in the U.S. last year -- have slowed from 29.8 percent and 49.7 percent growth to 8.2 and 11.2 percent, respectively, in the second quarter.
Economists around the country say that trend may just be the beginning, and feel there could soon be some major pullbacks in the most heated regional housing markets.
According to a nationwide study by SMR Research, investors and second-home buyers who entered the market in high numbers increase the potential volatility of local markets are more likely to bail when markets stagnate or turn down.
It also means that builders currently building to satisfy investor demand could eventually find themselves stuck with developments riddled with empty homes.
"Last year, we saw much more investors from everywhere jumping into Bonner County real estate," said Brooks. "They came in droves and bought up a lot of property. But this year, there's been a different type of buyer who still feel prices here are a bargain and want to buy before they feel they'll be priced out.
"Ten acres in the Selle Valley for a little over $200,000 may seem high to us, but where can you buy than kind of land for that price in California ?"
Leading indicators, such as the Mortgage Bankers Associations' mortgage applications index, indicate that activity will remain vigorous around the country for at least the next couple of months.
Low mortgage interest rates and a strong economy continue to support the purchase market for homes. But if interest rates rise, the study says that homeowners with adjustable rate mortgages may not be able to keep up higher payments or even sell the house for what they paid.
And If housing prices flatten out or decline, some newer homeowners who have built up little equity, could find themselves "upside down"-- owing more than their houses are worth.
That could spur foreclosures and the supply of homes for sale to soar, which could send the real estate market into a tumble.
Still, Hall and Brooks and scores of other Realtors here say they are as busy selling properties as they were in the last quarter of 2004. Hall recently sold an 1,800-square-foot home in the city on the market for only a few days for $347,000, while Brooks spends more time putting together deals on higher-priced properties.
"Two big (housing) projects are coming up," said Jackson-Heim. "The Dover Bay just received approval on its final plan, and there's the first phase of Seasons. They could go on the multiple listing service anytime, and when that happens, there'll be a lot more activity generated throughout this market."
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