'Safe' to buy

Home buyer confidence up, realtors say; lower-prices homes represent higher percentage of sales

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Allyson Knapp, with Windermere Coeur d'Alene Realty, shows prospective first-time home buyer Craig Alworth of Post Falls a home in Post Falls. Local sales of homes under $150,000 have increased each of the past four years, representing 14 percent of the market in 2007 to 56 percent in 2011.

POST FALLS - Craig Alworth is on the prowl for his first home.

The conditions, the Post Falls man said, are ripe for the first-time home buyer.

Alworth said with him paying $600 a month for rent and interest rates below 4 percent, it's time to put his money toward a home investment.

"Why rent when you can own a house?" Alworth said while browsing a renovated Post Falls home listed at $99,000.

There's more and more buyers in Alworth's shoes.

Local sales of homes under $150,000 have increased each of the past four years, jumping from 14 percent of the market share in 2007 to 56 percent in 2011, according to data from the Coeur d'Alene Multiple Listing Service and a report by Windermere Coeur d'Alene Realty.

Realtors report that buyers are starting to overcome prior hesitancy based on concerns of a recurring downturn.

"There's a lot of fixers and REOs (real-estate owned) in that (lower) range," said Windermere's Allyson Knapp. "It's definitely a race to them as soon as they're on the market. The younger crowd is realizing, with the interest rates, that rather than renting they could buy."

Windermere's Jennifer Smock said there's other positive indicators.

In the past three months, there were 23 homes sold in Kootenai County that were above $500,000 and six of those were above $900,000.

"That is an average of almost eight a month; this is a positive sign for our local real estate market," Smock said. "Buyers in this price range are exhibiting confidence in our local real estate market as well as our local and national economy."

Smock said the local market continues to be "balanced" with a nice mix of prices and has about six months of inventory as has been the case for nearly a year.

Kootenai County home sales were down 1 percent (1,608 to 1,594) from 2010 to 2011, the median price was down 9 percent ($162,593 to $147,800) and the average price down 6 percent ($186,215 to $175,473), according to the MLS.

Joel Elgee of Coldwell Banker Schneidmiller Realty said sales being down only 1 percent is actually a plus, considering the first half of 2010 was boosted by a tax credit.

"The second half of 2011 definitely had more demand than the second half of 2010," Elgee said.

Elgee said Realtors have seen an increase in multiple offers on properties and a hike in pre-sale construction activity.

"That (construction) was all but dead for the past four years," he said. "As we see more demand and less supply, you're seeing more people building from scratch."

Pete Faust of Century-21 Beutler and Associates said three deals are in the works this year on cottages in Tullamore in Post Falls.

"Most folks see in the improving national economy that it is 'safe' to buy a home," he said. "All the talk about the double dip and end of the world has gone away and the pricing and rates are really hard to pass up."

Faust said qualifying for loans is still relatively difficult compared to the boom years, but that provides for a more stable market in the future.

Ray Murphy of Lakeshore Realty said slow growth is expected this year, considering government regulatory uncertainties ahead, but now is a great time to buy because of low interest rates and, at some point, inflation will start rearing its ugly head.

Distressed properties continue to play a role in the market and aren't expected to be flushed anytime soon, the Windermere report states. Local foreclosure rates were up 6 percent in 2011, totaling 31 percent of the local sales.

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