Real Estate Tango

Pivots are often used to accomplish tango dance steps. One’s pivot must be stable, confident and calm. This can make a big difference in the dance and lead to more control in one’s embrace. Many believe the real estate market in North Idaho is going to pivot in 2024. A real estate pivot is a shift in market conditions including metrics such as prices or inventory. In this scenario, you too will need to remain stable, confident and calm. The best way to accomplish this is to hope for the best, prepare for the worst and know your market. Home prices in North Idaho continue to climb. That is great news for sellers. That is great news for homeowners. That is great news for those with the 3% mortgages. That is horrific news for first-time home buyers.

Fun fact. In 2019, 75% of North Idaho locals could afford to live here. Last year, that number plunged to 20%. We are currently in a supply-constrained market where we have increasing home prices combined with low inventory. Some predict a price correction, AKA pivot, shortly. Others predict that new construction will be the path forward, while others believe that deed-restricted community land trust will help. Marty and Max predict that although all of these will be part of the solution, technology and new building techniques will lower the cost of building within 24 months. Stay tuned as we will be sharing much more on this in future columns.

Recently, I attended the 2024 Real Estate Market Forum and will share with you some of the highlights. The sweet spot for the local market, according to the forum, seems to be in the $450-$600K range, however, there just isn’t much inventory. In an interesting exchange, one speaker mentioned that the Wall Street Journal ran an article that those in Germany were “Renters by Choice and they were happy” touting that 47% of the population rent their home. Another agent rebutted, “Although 47% may be renting and happier, 100% of them are broke”! Touche. Real estate creates wealth.

Only a fool trips on something that is behind them. Three percent mortgages are behind us and I have only seen mortgage rates below 3% once in my lifetime and don’t believe I will live to see it again. I am willing to bet you won’t either. What caused rates to dip below 3%? Can you say C-O-V-I-D? Sure ya can. If you are waiting for 3% to return, you may be better off buying a lotto ticket. Your chances of success are about the same.

Meanwhile, many in North Idaho are missing out on an economic boom with a market that continues to rise. There are so many ways for first-time home buyers to get in the game with little to no down payment. There are so many ways for a retiree to leverage the equity in their large home to downsize to a smaller home.

Athol is where Hayden was 20 years ago. Services are growing in this area, especially considering over two million folks a year visit Farragut and Silverwood. One speaker opined that North Idaho has become the old western classic “Wagons East,” such that one of the predominant areas for growth is east of Coeur d’Alene in Shoshone County. Currently, our housing shortage is estimated to be about 3,000 homes.

Are folks still coming to North Idaho? There are not too many states with a surplus, balanced budget and investing in infrastructure. “Welcome to Idaho,” says Gov. Brad Little. According to the latest data from the DMV, Kootenai County grew by 24.7% in 2019 and 14.2% in 2020. If you build it they will come, and boy are they coming. They are coming from California, Montana, Washington, Oregon and Colorado. Since the new millennium, our greatest influx in Idaho has been California. The most recent data shows that, wait for it … Washington has passed Californians moving to Idaho.

Both John F. Kennedy and Ronald Reagan said that a rising tide raises all boats. This is only true if you have a boat in the water. Do you have a boat in the water? I don’t care if it’s a dingy, but if you don’t have a boat in the water you can’t cash it in at some time for a bigger boat. If we can not create more housing, we will truly be the “haves” and the “have-nots.” A society where there is an upper class and a lower class. A tale of two cities. In the next few months, I will be sharing ways for both first-time home buyers and retirees to benefit in this market. If you would like to know more about a strategy for your home, please contact the Marty and Max Team.