February 19, 2009 in Business

Housing market still in a slump

Experts at industry forum predict better times in real estate in 2010
By The Spokesman-Review
 

Numbers decline in Inland Northwest

Spokane home values declined less than 3 percent in 2008, said Melissa George, a Realtor with Windermere Manito, although volume fell about 30 percent.

In Kootenai County, the average sales price slipped to $242,500 in 2008 from $270,700 in 2007, according to the Coeur d’Alene Multiple Listing Service.

Area real estate professionals were ready for a message they did not want to hear Wednesday: Markets are not going to rebound in 2009.

But, by a show of hands, a plurality of 600 who attended an industry forum in Coeur d’Alene said they expect better times in 2010. Most speakers suggested there is indeed reason to hope for the not-too-distant future.

And there is always the consolation things could be worse, as told by Leslie Appleton-Young, vice president and chief economist for the California Association of Realtors.

Appleton-Young, the keynote speaker, showed chart after chart depicting low sales volumes, plunging prices and the potential for more duress as mortgage rates reset for thousands of homeowners.

The market for multimillion-dollar homes has tanked so badly that in California coastal communities like La Jolla, Newport and Santa Monica, home sales in January can be counted on your fingers, she said. Prices were 40 percent lower than one year earlier.

“Nobody has to live in a $3 million house,” Appleton-Young said.

But sales volumes for all of California – “The land with no budget” – have been increasing for more than a year, she noted, as hard-hit inland communities attract buyers feeding on prices almost 50 percent lower than last year’s. Activity in Fresno was almost double January over January, she said.

In contrast, Spokane home values declined less than 3 percent in 2008, said Melissa George, a Realtor with Windermere Manito, although volume fell about 30 percent.

And a survey showed Spokane residents are considerably more optimistic about the value of their homes as an investment, and their own job security, she said.

John Beutler, co-owner of Century 21 Beutler & Associates, said the Kootenai County market has been hit by high inventory – a 26- to 32-month supply – and unemployment that has more than doubled in the last year. The average sales price slipped to $242,500 in 2008 from $270,700 in 2007.

But if prices do not fall much further in 2009, he said, the long-term trend will have reverted to a 4 percent to 6 percent price increase that was the norm from 1980 to 2000, Beutler said, adding that first-time buyers have an opportunity like they have not had in 20 years.

Don Walker, president of Horizons NW Mortgage Co., said today’s economic turbulence may change consumer psychology, and their attitude toward risk, just as the Great Depression and 9/11 did.

But the new $8,000 credit for first-time buyers, low interest rates and credit availability are already generating more inquiries, he said.

Forget the heady days of 2004-05, Walker said – more good days lie ahead.

“No more whining,” he said.


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