Is North Idaho Real Estate starting to crash?

Blog Post Image
Real Estate

North Idaho Real Estate Review: First Quarter (Q1) 2019 Market Review

So, what does real estate in North Idaho look like three months into 2019?

According to data from the Coeur d’Alene Multiple Listing Service, prices continued to rise near or above double digits, even though inventory and demand slowed compared to Q1 of last year.

Potential factors that influenced slowing inventory in Q1 2019.

Weather: Coeur d’Alene saw its highest snow totals for the month of February in its history, receiving a years-worth of snow (4 feet) in one month. As a result, sellers hoping to list their homes for sale are about a month behind normal as they wait for snow to melt off. The small number of builders contributing to inventory are also behind schedule due to record snow levels.

Hesitation: Keep in mind, few people leave North Idaho to go elsewhere, so the main way houses come on the market is by people upsizing or downsizing within the market. Potential North Idaho home sellers are hesitant to list their homes because THEY fear jumping into a market with limited inventory.

Inventory has been, and will continue to be, the most limiting factor in the North Idaho real estate market. Land mass in the Panhandle of Idaho is overwhelmingly wilderness and resource land that cannot be developed into homes. Thus, there is little land left for high volume developers to create inventory.  

MLS data also showed a slight slowing in demand for Q1 compared to last year.

Potential factors that influenced slowing demand in Q1 2019.

Economic Uncertainty: The government shutdown, rise in interest rates, and stock market crash at the end of 2018 created uncertainty and slowed the national real estate market in Q4 2018. This slowed momentum heading into Q1 2019. Interest rates have dropped back down to last year’s early rates and the stock market has regained its losses, so we expect to see more certainty return to the National and North Idaho Real estate markets.    

Higher Prices: It is also evident that prices are starting to exclude people from entering the North Idaho Real Estate market. Home prices have increased over ten percent a year for four consecutive years. What was once affordable for many has become too expensive. Take a home priced 350K four years ago. At 10% growth per year it is now priced at 466K! At the end of Q1 2019, the median single-family home price in town was $279,000 and the median rural home price (two or more acres) was $418,500. Buyers who are price sensitive are electing not to look in the greater Coeur d‘Alene area, and instead are looking in less expensive markets in the country, even if those markets have a less desirable lifestyles and cultures.

Nevertheless, despite the decrease in demand, there was still more than enough volume of buyers to compete for the limited inventory of homes and thereby keep prices rising steadily.   

Below are the MLS stats for the first three month of 2019. The first is single family homes on less than two acres and the second is single family homes on more than two acres:

    Mls Q1 2019 

The next quarter in the North Idaho housing market will be revealing. We shall see if the slow Q1 2019 was a blip on the radar or an actual start to a slowing North Idaho housing market. If the volume of buyer demand is any indication...there is no crash in sight for the North Idaho Real Estate market!

Written by: Kory Martinelli Owner/Realtor with The Martinelli Realty Team