If you build it … well, maybe they’ll come, maybe they won’t.
Just ask contractors trying to stay afloat this season in a market awash in vacant homes.
As North Idaho’s building boom levels off and home buyers grow scarce, developers continue to plan new subdivisions.
In Post Falls, officials are considering a mammoth development that would enlarge that city by a third over the next 15 years.
A glut of homes is prompting some sellers to leave homes listed for 12 months or more.
It’s helped chisel the county’s real estate sales force by 25 percent.
And it’s forcing some contractors to thin their ranks, even as the largest companies keep building.
“We’ve been getting calls from people looking for work who say their other jobs have gone away,” said John Johnson, Crescent Homes office manager. The company is building only 170 homes this year, down from 200 last year.
The problem, market watchers say, is developers who rode an early ‘90s tidal wave built too many houses.
Three years after the county’s construction peak, more than 5,000 homes are listed for sale. That’s about 900 more than last year and nearly 1,800 more than in 1994.
“We tend to overbuild when times get real good, and I think that’s exactly where we are,” said Realtor Pat Acuff. “There’s just a lot of inventory being chased by the same, or maybe fewer, buyers.”
So far this year, home sales are up 4 percent over last year, but listings are up nearly 22 percent.
Lamar Bennett, president of the Coeur d’Alene Association of Realtors, calls it a “doggone good year.”
“Obviously, if we’ve got more listings and we’ve sold about the same numbers, we’re not selling as high a percentage,” he said. But since the number of Realtors dropped from 635 in 1994 to about 465 today, “the pie’s not being sliced quit as thin.”
Agents still are feeling the pinch.
Kelly Hanson, an agent and one of the county’s few accredited home buyer representatives, said that despite low interest rates, he had his worst winter ever last year.
“It’s off balance,” he said. “There’s a shortage of buyers out there.”
He currently has a four-bedroom house listed in Post Falls for about $107,000, but “there are, like, 25 homes competing with it within $3,000 or $4,000 in either direction.”
Although some sellers have reduced prices to accommodate the lack of buyers, it’s not happening across the board.
The average cost of a home is up slightly, from $110,476 last year to $111,332.
And while building has slowed in Coeur d’Alene and Post Falls, construction in rural Kootenai County is on par with last year.
County building officials had issued permits for 191 homes as of Aug. 1, compared with 186 last year.
“At this rate we could exceed what we did last year,” county building chief Dave Daniel said. However, unincorporated areas account for a small percentage of homes on the market.
In Post Falls the new project would add some 1,500 homes on 640 acres.
“It’s good to know our building force has that confidence,” Bennett said. “On the other hand, I would suggest we see things leveling out.”
There’s no telling how long the lull will last, but Johnson at Crescent Homes said it could be 1999 before things improve.
“Everybody’s saying there’s about 18 more months of a flat market,” he said. “I’ve heard this from about 15 different sources, but I don’t know where they’re getting their figures.”
Bennett for one isn’t worried, having put his faith in the free market.
“If houses aren’t selling, obviously, folks eventually won’t build as many,” he said.
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