For the first time in nearly a decade, Bonner County real estate agents are stinging from a serious slump in the market here.
With sales volume down about 26 percent, two offices - John L. Scott and Re/Max - have shuttered their doors.
The downturn reaches far beyond real estate offices. Bonner County’s fortunes depend to a large degree on tourism and home sales. When either one is in trouble, the economy is sure to take a dip.
“Real estate brings a significant amount of money into the economy when you consider the people retiring and relocating to this area,” said Chamber of Commerce Executive Director Jonathan Coe. “Those people bring money with them, … and to the extent real estate is down, there is also a downturn in the dollars coming in. That is a concern to us all.”
Tourism also has fallen off in Sandpoint and affected the real estate market, Coe said. “Tourism is a vehicle that introduces people to the area and makes them decide to move here. Our last great tourism year was 1993, and I think we are seeing some impact from that.”
Realtors hesitate to point to a single factor for the slump. But part of the problem, they agree, is inflated property prices from the boom years.
“We still have a lot of lookers, but we have just out-priced the market. It’s out of control and will be until we price property realistically,” said Val Kidd, who was a broker at John L. Scott.
Homes that sold for $100,000 several years ago now are listed for $150,000 to $180,000. But many of those homes have sat on the market for more than a year. Sellers are having to drop prices so people in Bonner County, who earn an annual average wage of $18,884, can afford them.
“We have reached a point where things are not real affordable for people any longer and that has put a halt to some sales,” Stewart said. “People are value shopping.”
In addition to John L. Scott and Re/Max, several other real estate agencies have scaled back or are teetering on the edge of closing. Others are planning mergers to survive the tight market.
“I know we are supposed to sound enthusiastic and there are those that will tell you the market it doing great, but it’s not true. It is slow,” said Kidd.
His First Avenue office closed last week and merged with Century 21. The office of Re/Max, which also sits on First Avenue with about 10 other real estate offices, is now empty. Kidd said he expects two others to close shortly.
Other real estate agents said a merger is also likely between Panhandle Realty and Kaniksu Realty, two of the largest offices in Sandpoint.
“People are worried because some have closed down now they are looking at mergers,” Kidd said. “They realize it will be the large offices with the means, personnel and technology that will survive the hard times.”
From January through September of last year there were 819 sales of homes, commercial businesses and property in Bonner County. This year the sales tally is 638. The drop means sales are off by $20 million in value compared with last year. The biggest declines were in waterfront homes and commercial businesses.
Real estate agents are not panicked, but nervous. So are others in the business community because real estates sales have fueled the economy in Sandpoint the last five years.
Some have compared the slump with the early 1980’s when the market hit rock bottom and unemployment rates soared.
“It’s similar but not as drastic,” said Marita Stewart, a broker at Lake Country Realty. “In the early ‘80s it was like the last person to leave town turn out the lights. I don’t feel like that now, but it is a slow cycle. I don’t want to say it will turn around in a year or two but it will level off.”
Last summer the Bonner County Association of Realtors had 180 agents. That number is now down to about 146.
“I think the number of agents reflects the activity in the market and the market has certainly slowed,” said Debbie Ferguson, president of the Association of Realtors.
Sales have been down this summer across the region. Spokane County home sales dropped 30 percent in August and Kootenai County was down 23 percent that month. The trend is just more obvious in Sandpoint, especially when main street offices start closing, Kidd said.
“We’ve got too many agents for this small area and it’s going to be hard to make a living selling real estate right now,” he said.
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