More than three years after purchasing their first home in Post Falls, the Bergers decided they wanted to buy property outside of the city.
The couple, born and raised in Idaho, found a 1-acre lot with a house and a shop in Athol and quickly put in an offer on the property, with a contingency to sell their existing home within five days.
Their 1,300-square-foot home – listed at $360,000 – garnered more than 10 offers and sold swiftly above asking price for $419,000. The couple is closing on both properties next month.
Megan Berger said both buying and selling a home in the same week was “an experience” in a North Idaho market with soaring prices, increasing demand and diminishing inventory.
“The market has been crazy. The houses are going for so much and the locals are having a hard time finding a house in our price range because out-of-towners are coming and they are putting down cash and beating us,” she said. “When we looked at the house and put in an offer in Athol, we were thankful because it’s not often that you get a contingency to sell.”
The Bergers are among many North Idaho residents faced with intense competition for a dwindling supply of homes as bidding wars and multiple offers have become the norm, reaching a frenzy not seen in the last 15 years or more, Realtors say.
North Idaho’s housing market conditions escalated further last year because of record-low interest rates and an influx of buyers – some of whom have the ability to work remotely – moving from larger West Coast cities to North Idaho during the coronavirus pandemic.
“It really has been nonstop. It’s been very steady all year round,” said Allyson Knapp, Realtor with Windermere Hayden LLC and Windermere Liberty Lake.
There was a slight lull in activity during the pandemic’s onset in the region in mid-March, but demand picked right back up by summer, said Knapp, who is also 2021 board president of the Coeur d’Alene Multiple Listing Service.
“By the end of summer, you could really tell there was a mass exodus from Seattle, Portland and California,” Knapp said. “It started getting incredibly busy and our inventory really went down … people were apprehensive of putting their homes on the market in early summer because they didn’t know what to expect. Then it collided with ‘where would we go if we sold?’”
Some 184 homes on less than 2 acres sold in Kootenai County in January, up 3.4% compared to January 2020. The county’s median home price was $415,000 in January, up 33.4% compared to the same time last year.
Demand in Kootenai County’s housing market continued to surge in February, as the number of available homes under $1 million on 2 acres or less dropped to 27 in the Coeur d’Alene metro area as of Feb. 11. Of those homes, eight were priced $550,000 or less, according to data from the Coeur d’Alene Multiple Listing Service.
“It really is that first time homebuyer price point that’s really almost nonexistent. It’s hard to find anything $350,000 or less,” Knapp said, adding it’s common for first-time homebuyers to be outbid by investors or cash buyers. “If you are in the $350,000 to $380,000 price point, that’s where we see the biggest bidding wars.”
Demand isn’t necessarily tied to one particular neighborhood or city – it’s occurring throughout North Idaho. While Coeur d’Alene has always been desirable for retirees, it’s also attracting younger buyers with families. Hayden and Rathdrum, because of the Lakeland School District, – one of the highest-rated in Idaho – are also popular areas, Knapp said.
In Kootenai County, 4,597 homes sold in 2020, an 8.4% increase compared with 2019. Of those homes, 99.8% sold for full list price, at a minimum, according to the Coeur d’Alene Multiple Listing Service.
Million-dollar homes commonplace
North Idaho’s luxury housing market is feeling the same pressure as other segments, said Rob Orth, regional vice president and designated broker of Tomlinson Sotheby’s International Realty.
Three years ago, a $1 million or $2 million home would have been on the market for five months to two years. Now, homes in that price range are selling anywhere from days to a couple of months, Orth said.
“One million dollar homes are common now. It’s not just on the river, on the lake or on a ranch. Million dollar homes are sitting in places where they have never had million dollar homes,” Orth said.
While high-end luxury homes may remain on the market longer because it takes a special buyer, they are also selling quicker compared to a year ago, Orth said.
In 2020, 365 homes listed for more than $1 million sold in the Idaho Panhandle from Moscow to the Canadian border, compared with 158 homes in 2019, Orth said.
“To sell that many homes tells us about the need and the dollars that are coming here from wherever they are coming from,” Orth said, adding buyers appear to be flooding in from California, Texas and Canada, among others . “It has become a very intriguing, interesting market for buyers to get into.”
People are moving from larger West Coast cities to North Idaho for a variety of reasons, including proximity to lakes and outdoor activities, the ability to work remotely, and what they consider to be a more moderate political climate with lower taxes, Orth said.
The influx of out-of-state buyers from larger metro areas is mirroring a national trend, Orth added.
“People are moving away all of the sudden from city centers to more suburban and rural environments. That was a very quick switch from two years ago, where people weren’t doing that,” Orth said.
Prior to the pandemic, people wanted to downsize their properties. But as households are working or attending school from home during the pandemic, the size of a property matters, he said.
Greg Rowley, Realtor and luxury property specialist with Coldwell Banker Schneidmiller Realty, echoed that the housing inventory shortage is spilling over into the luxury segment, which is experiencing greater demand in prices up to $2 million.
Homes above $750,000 would have been considered a luxury purchase in 2019, as defined by those in the top 5% of the market in sales value. The amount considered to be a luxury purchase increased to $980,000 and more in 2020, Rowley said.
Rowley recalled a home in Hayden listed for $1.2 million that didn’t sell in 2020. It was listed on the market again this month at $1.5 million. The sellers had multiple offers within a few hours and a $100,000 price run-up, he said.
“We are seeing stuff like that all the time in the market,” Rowley said. “We’re seeing price run-ups, multiple offers the day of the listing … homes are going in a matter of hours, not days. If something is on the market and hasn’t sold, there might be something wrong with it or it’s not appropriately priced.”
Rowley said the North Idaho market is frustrating for buyers and very exciting for sellers.
“There’s almost no inventory left,” Rowley said. “It’s a real challenge to have a long list of active buyers who can’t find what they want because there’s such competition when a home comes on the market. Other things we’re seeing is locals who are in a position to maximize potential on a home sale waiting to see what neighbors sell for … It’s really challenging climate for buyers.”
High demand likely to continue
In a housing market report, the Coeur d’Alene Association of Realtors predicted buyer demand will remain elevated and low inventory will continue to influence multiple offers and higher prices in 2021.
“Mortgage rates are expected to remain low, helping buyers manage some of the increases in home prices and keep them motivated to lock in their housing costs for the long term,” according to the report.
Orth said signs are pointing toward elevated housing demand continuing for the next couple of years, barring anything unusual occurring in the market.
Rowley advises potential homebuyers to know what they are willing to spend and to be careful with negotiations.
“Make a strong opening best and highest offer,” Rowley said. “Don’t expect a counter offer if you are at full price … there aren’t great deals to be had like their once was.”
Knapp encourages sellers to have a plan for where they will move because their home will sell the second it is put on the market.
Knapp said it’s frustrating for first time homebuyers at the moment, but she encourages them to keep trying. Having financing lined up will help, she added.
“The key thing is to be ready to buy, because what you are looking at today probably won’t be there tomorrow or the next day,” she said.
Amy Edelen can be reached at (509) 459-5581 or at [email protected].
Recent Comments