Homes sales in Spokane and Kootenai counties will lag until prices return to averages established before the mid-decade housing bubble pushed them to unsustainable levels, Coeur d’Alene real estate broker John Beutler said Thursday.
Sales in Bonner, Kootenai and Spokane counties have fallen because homes became unaffordable, the principal of Century 21 Beutler & Assoc. told Realtors gathered for their annual Real Estate Market Forum.
Although prices have fallen they remain above trend lines that go back to the mid-1990s, he said.
In Bonner County, for example, average prices peaked at $316,500 in 2007, almost 30 percent above the previous average of $244,000, Buetler said, with the result that only 366 homes sold in 2010. More than 800 would have sold in a typical year.
He said Coeur d’Alene average prices topped off at $270,700 in 2007, have since fallen back to $208,400, but remain above an average of $188,000. “With lower incomes, $188,000 may be high,” he said.
But Buetler said that with Coeur d’Alene’s population growing at an average rate of 2.7 percent annually, “There’s a lot of pent-up demand.”
With the average Spokane price at $183,500 after hitting $211,900 in 2007, the market is close to the pre-bubble $166,000, he said.
Eastern Washington University economist Grant Forsyth predicted a slight decline in home prices this year, but noted that population growth will create a need for 50,000 additional housing units over the next 20 years.
Many of those, he said, should be built with an aging population in mind. By 2020, 20 percent of Spokane County residents will be age 60 to 79, up from 14 percent today.
Inland Northwest Bank President Randall Fewel said community banks will be increasing loans for one- to four-family housing, and keeping more of those loans on their books instead of selling them in the secondary market.
Because 30-year, fixed-rate mortgages create too much risk for banks, he said, more loans will carry adjustable rates.
Tougher credit standards will lower the share of households that own their homes, Fewel said.