Facts you must know before you move to North Idaho

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Market Trends

Have you ever studied the rings of a tree?

Tree rings show a history of the environment in which the tree has grown. Rings testify of rainy years, drought years, years of resisting fires, pests, predators and much more.

Before you move forward in pursuing a possible relocation to North Idaho, it would be wise to study the "rings" of the North Idaho housing environment.

Here are ten facts about the North Idaho housing environment you should know:

1) North Idaho is one of the most popular and competitive real estate markets in the country.

There is an extremely limited supply of homes with an unprecedented demand due to Conservatives fleeing large liberal areas.

Limited Supply - Unlike Arizona, Texas, Nevada, and even Boise, North Idaho has little land left to develop. Two-thirds of the Panhandle landmass is National Forest and State land. Most of her remaining private land is zoned 5 acres and up, making it difficult for builders to supply homes equal to the demand. On top of that…very few people are leaving North Idaho!  

Unprecedented Demand - Since 2017, Idaho has been the fasted growing state by percentage rate. Covid-19, social unrest, and the increased ability of many to work from home, have all combined to pour gas on the already burning North Idaho market.

While it appears that everyone you talk to wants to move to North Idaho, the fact is, the insatiable demand for the limited real estate available has pushed prices higher than most are willing to, or able to, afford. As a result, not everyone is moving to North Idaho!

As a general rule, whatever property a buyer is seeking, new or pre-existing, or whether a home in town, or a home on property…there are not a dozen properties on the market for a buyer to see. Rather, there are a dozen buyers waiting for a property to come onto the market.

Yes, you heard that right. The rental market in North Idaho has a large contingency of buyers who are renting in town, while they wait for a home to offer on! This in turn, has helped create a rental shortage as well.

2) The extreme competition has changed the way homes are sold in North Idaho.

Most homes are being sold in an “auction format” with the homes seeing 3 to 30 multiple bids. The “auction format” is where the seller puts their home on the market on a Wednesday or Thursday and says, “Seller will review all offers on Monday at 5PM. Seller reserves right to accept offer before Monday.” This format encourages multiple bids and allows sellers to pick the strongest possible offer.

Even most tract and custom home builders are now finishing, or near finishing, their homes (spec homes) and putting them on the market in the auction format described above.

Gone are the days where you walk into a model home, pick a lot, put down a deposit, select a floorplan, and have a home 10 months later!

Since 2020, builders in North Idaho are seeing HUNDREDS of buyers seeking the 20 to 40 homes they can build in a year. Additionally, the cost of building has become so unpredictable, that builders refuse to sign a contract at a certain price, only to see their profit margin eaten away by increased material costs during the building period. Instead, Builders are now leveraging the high demand through the auction format on the open market by completing the home first, knowing there will be a dozen or more bids on the new home when it is offered on the MLS.

3) There is a Buyer Bottleneck – When buyers compete against multiple buyers for a property and lose, they must compete against the other unsuccessful bidders for the next home. Meanwhile, there are new buyers who continue to enter the market. This pattern is creating an ever-growing bottleneck of buyers and driving prices higher and higher as they compete against each other.

4) Cash buyers are in Command - One in three North Idaho buyers are all cash with no contingencies to sell a home. A home with 10 offers will likely see three of those being cash offers. The result is…

5) Financed buyers get Frazzled - Buyers who need financing must offer tens of thousands over the asking price to get the seller’s attention in multiple bid situations. Problem is, if they win the bid with a higher offering price, lender appraisals may not support the offered price. Because of this risk, most sellers are overlooking buyers with loans, unless the buyers waive their appraisal contingency and guarantee to cover the appraisal gap with their own cash. 

6) Contingent buyers get Crushed – Buyers who have homes to sell first, are completely overlooked when competing with those who have no homes to sell. Additionally, buyers who require inspection, appraisal, loan approval and other contingencies, appear less attractive in a bid war than buyers without such contingencies. Those who win bids are willing to waive their contingencies.

7) Minimum Prices are MORE than most expect – Within one hour of Coeur d'Alene:

The least expensive asking prices for homes in residential neighborhoods are 350K+ with the average price being 518K.

The least expensive asking prices for homes with an acre or more are 650K+ with the average price being 800K.

Properties under the average price are the ones that see the most competition and bids, and in the end, after a bidding war, end up closer to the average sales price than the minimum sales price.

If your expectation is to find properties for less than what is stated above, within an hour of Coeur d’Alene, your expectations will be unrealistic for the market.

8) Alternative strategies Abound – Many see the high prices and extreme competition and look for alternative strategies to “beat the market.” They hope to buy a piece of raw land and save costs by owner building or with alternative methods such as “Tiny homes,” “Barn-dominiums,” “Shop homes,” and/or “Off grid.” These methods are extremely hard to finance and usually require cash… this includes the purchase of the land and the drilling of a well up front. As for doing the work yourself…lenders DO NOT let you do your own work unless you are a licensed contractor. Alternative strategies like the ones EVERYBODY sees on YouTube and the DIY channel, look sexy…but they need cash!

9) No Needles in the Haystack - Properties that do not see any offers in the first week are NOT buying opportunities…they are overpriced properties that need much more money dumped into them. These homes may also have financing difficulty due to extreme disrepair, structural issues, etc. Keep in mind, lenders have grown very cautious about what homes they will fund. In North Idaho, if it is financeable, it pretty much gets multiple offers the first week. If a home does not sell quickly in our market…you have to ask WHY? The answer is almost always…it needs another 100K of improvements.

10) North Idaho is a Culture, not a place – North Idaho has a proud Native American culture, and a proud “rough-neck” culture built on the backs of lumberjacks and miners. That culture was not built by those ignorant and fearful of the hard work her rugged and beautiful environment requires.  The same still applies today.  North Idaho’s riches and rewards are still abundant, but only come to those respectful of the effort and willing to do what it takes to make it happen.

We are very intentional about stating the current market conditions so you can know what to expect to make it happen. Buying in the North Idaho market is ultra-competitive and requires a backbone and a realistic strategy…a strategy that MUST start with proper expectations.

If you would like to learn more about the market, our towns, strategies that work in our market, etc. we would love to answer your questions, as you decide if this is the next place for you.

We can be reached at https://www.livebetterinnorthidaho.com/contact/


Written by Kory Martinelli, Owner/Agent/Team Leader