If recent real estate activity is any indication, the industry has reason to be optimistic for 2013.
Year-to-date single-family sales for all of Kootenai County were up 6 percent through the end of October compared to last year, according to the most recent report by the Coeur d'Alene Multiple Listing Service.
"We're extremely excited about the direction the market is headed," said Joel Elgee of Coldwell Banker Schneidmiller Realty.
The average price countywide was also up 4 percent ($175,291 to $182,889) and the median price up 5 percent ($148,000 to $155,000).
"If you look back at the history of our median sales prices in Kootenai County, you notice a very encouraging trend in our marketplace," said Jennifer Smock, managing broker of Windermere Coeur d'Alene Realty. "Our local compound annual growth rate for residential homes in Kootenai County is outperforming the nation's rate by nearly 1 percent."
Since 1995, when the MLS started tracking data, the growth rate has been 3.3 percent, while the nation's is at 2.6 percent.
Smock said another positive trend is the shift toward a balanced market in the price ranges under $300,000.
"This is good news for both buyers and sellers," she said.
"We would expect to see both of these trends continuing on through 2013 as long as interest rates remain low."
Debbie Myles of Windermere said the market is particularly strong in the under $200,000 price range with low rates and inventory.
"Investors, plus first-time home buyers, are facing multiple offer situations," she said.
In that category, there are 1,315 listings, 405 pending sales and 2,044 homes sold in the MLS since Jan. 1.
With single-family sales being up for the third year in a row - and prices being up as well for both new construction and existing single-family homes, Pete Faust of Century 21 Beutler and Associates said a "solidification" of the market is happening.
Non-distressed home prices are up even as foreclosure and short sale property sales prices are down, another sign of an improving market, Faust said.
"All in all, things are looking up," Faust said.
Elgee believes there will be additional gains in home values in 2013.
"By conservative estimates, these gains may be 2 to 3 percent; more optimistic estimates would 5 to 6 percent," he said. "Either way, this is extremely positive news for our local real estate market and by all accounts means that we have already seen the bottom of the market and that things have been and are headed back up."
Tim Herzog of Treaty Rock Realty said short sales and foreclosures are still playing a role in the market. He said there were 221 short sale listings and 289 foreclosures in the Panhandle on Thursday, but some of them have sales pending.
"A lot of buyers just can't qualify because of credit problems and are looking for seller financing," he said. "I have buyers that still want to relocate except selling their property remains a problem as well as jobs here locally."
Sales countywide on residential listings - from mobile homes on render lots to waterfront properties - increased 10.3 percent through the end of October compared to last year.
With individual cities or areas of the county, sales in Coeur d'Alene/Dalton Gardens increased 10 percent, Post Falls 4 percent, Hayden 13 percent and Rathdrum/Twin Lakes/Hauser 1 percent.
The average price in Coeur d'Alene/Dalton rose 9 percent ($171,881 to $186,680) compared to a year ago, Post Falls 6 percent ($151,641 to $160,906) and Hayden 6 percent ($199,336 to $210,812). The price dropped 10 percent ($151,797 to $137,291) in Rathdrum/Twin Lakes/Hauser.
New construction has accounted for 12 percent of the single-family sales countywide this year compared to 10 percent a year ago.