Kootenai County Housing Market Loses Steam

Drive through the streets of Kootenai County and you’ll likely hear the sounds of hammers.

But it’s not builders finishing new homes. Often, it’s real estate agents or homeowners driving in the stake of a “For Sale” sign.

In a community that in recent years has been dependent on the new home construction market, the increased number of homes for sale has pushed the construction business into a tight corner.

More existing homes for sale means fewer jobs for home builders.

Construction work is down 20 percent, say some Kootenai construction firms. That means cutting hours and looking for other building markets.

Earlier this year, North Idaho businessman Duane Hagadone predicted in his annual economic forecast that Kootenai County’s construction business would drop as much as one-fifth in the next year. Perhaps his prediction already is coming true.

For Bryan Conn, former field supervisor for Viking Construction, the poor market cost him his job. There just wasn’t enough business to support his position.

“With the drop in business, you have to have a change in tactics,” said Conn, 45, who started his job two months ago. “They said they would love to have me back, but you can’t predict the market.”

Last month the number of commercial and residential listings was up 23 percent from July 1996, according to the Coeur d’Alene Association of Realtors multiple listing service. Meanwhile, total values for construction in Kootenai County the first six months of this year decreased to $97 million from $116 million from January to July 1996.

Therefore, companies like Viking Construction had no other choice but to cut back, said Rick Vance, general superintendent.

“The first part of the year was good,” he said. “The second quarter was dismal.”

The Hayden company laid off two workers and cut hours of its 10-employee staff. Viking builds 80 to 100 homes in a typical year, but this year will only build 60 to 80, Vance said.

Now it is looking at construction markets in Seattle, Portland and Salt Lake City to offset costs.

Other construction companies, anticipating the decline, began moving into Washington.

Cresent Homes of Coeur d’Alene moved into the Spokane market last fall and is currently looking at building projects in Cheney, said office manager John Johnson.

Sales have decreased 20 percent this year, but the company hasn’t cut jobs or hours of its 15-employee staff, Johnson said.

“We expect it to be flat for two years, then it will pick up again,” Johnson said.

Realtors predict the same.

“Overall there is a large supply of homes on the market,” said Wayne Stephens with Windemere/Coeur d’Alene Realty. “Prices of new homes are coming down, so a few people will move up to nicer, newer homes.”

That means more people are selling homes, which is flooding the market and dropping prices even more.

“It’s the old supply and demand. When you’ve got a lot of supply, prices come down,” said John Beutler of real estate company John Beutler and Associates.

Yet developers who bought Kootenai County property must develop it to make money. Otherwise, they would have to pay off their investment with no income coming from home buyers, he said.

, DataTimes