New markets require new approaches and tactics. Experts and industry leaders take the stage at Inman Connect New York in January to help navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here
The tale of Coeur d’Alene over the past few coronavirus pandemic-fueled years of the housing market may be a familiar one to residents of select secondary cities across the U.S.
An unassuming, affordable, highly livable city with space to spread out suddenly becomes attractive to wealthy, out-of-state buyers who can now work remotely and have the purchasing power to snatch up the home that suits them. As the city’s popularity grows, prices surge and competition becomes fierce.
Places like Austin, Boise, Rochester and Raleigh-Durham all have somewhat similar stories. Residents of pricier markets realized during the pandemic that they could have a much better quality of life in these then-affordable cities and now the capability to do so with remote work. Suddenly, inventory became scarce, and long-time residents of the area were found wondering if they’d even be able to afford a new home in their market, much less find one.
As the U.S. real estate market overall enters a cool-down period now, Inman took a look at what went into Coeur d’Alene becoming a viral pandemic market and asked agents what they think 2023 has in store for the destination lake town in northern Idaho. Here’s what they had to say.
An oasis during pandemic shutdowns
When the pandemic rocked the U.S. in the spring of 2020, real estate agents in a number of states were deemed non-essential workers, but not in Idaho.
Jennifer Smock | Windermere Real Estate
Jennifer Smock, of Windermere Real Estate, said she felt fortunate to still be working as she witnessed her peers in other states putting a halt to their businesses over COVID-19 concerns.
“In Idaho, we were deemed essential workers, so we were still able to sell real estate in person as long as we took the basic precautions [like wearing masks, gloves and booties,]” Smock told Inman. “We asked for permission before we went into houses, that sort of thing. It definitely slowed our real estate market down significantly, [but] it didn’t bring it to a screeching halt like it did in some other areas because we were still able to actually sell, so we got through that pretty well.”
Moving into 2021, before the widespread rollout of vaccines, Smock said she and her fellow agents were still in a relatively good position because as other states maintained strict COVID-19 restrictions, Idaho was open for business again. And people out of state were ready to give it business.
“While everybody else was still struggling to stay afloat and keep their businesses open — other states were still shut down — we were starting to see a pretty major influx of people moving to our area because they could come here and basically go about life,” Smock said.
The city, which is about 30 miles east of Spokane, Washington, is home to Lake Coeur d’Alene, Canfield Mountain Natural Area and Coeur d’Alene National Forest, making it a haven for outdoor enthusiasts and a vacation destination for many on the West Coast. As many people moved their social activities outdoors because of COVID concerns, the town was an ideal place to go, because so much of everyday life already revolved around the outdoors.
Carly Sweet | Engel & Völkers
“I think the pandemic really showed people that they can work remotely, so we had a lot of influx from the tech places like Seattle and San Francisco,” Carly Sweet, of Engel & Völkers, told Inman. “People were figuring out, ‘We don’t have to live on top of each other, we can live wherever we want.’ And with Coeur d’Alene being a real vacation destination, that was a top choice among those people.”
Although many buyers came to the city from the West Coast, agents told Inman they also had buyers from as far flung east as New York and New Jersey.
“We had a lot of people moving from, not just California, but western Washington, Texas, Nevada, pretty much everywhere,” she continued. “And what we saw was all these buyers that were moving to our area, some of them coming up here [who had] only heard about it, they came up [and] bought a house right away. We were still in the midst of low inventory, so that combined with a major influx of cash buyers started this whole real estate frenzy for us where our values just shot up astronomically.”
Greg Rowley, of Coldwell Banker Schneidmiller Realty, said at one point tour buses would come through town carrying a number of passengers who were ready to snatch up properties as soon as they got off the bus and found one they liked.
“In 2021 there were just tour buses dropping people off in downtown Coeur d’Alene who were just buying anything they could as fast as they could,” Rowley said. “We’re not seeing the tour buses come over anymore.”
A look at the numbers
The median list price for a home in Coeur d’Alene was $441,950 in January 2020, according to data from Realtor.com. At that time, the market was ranked the 90th hottest market in the country out of the top 300 metros, according to the company’s Market Hotness Index, which measures a market’s hotness based on days on market and Realtor.com views per property.
During the next few months, as COVID-19 emerged and became an increasingly serious threat, Coeur d’Alene’s housing market started picking up momentum as homebuyers elsewhere eyed the area’s relative freedom, natural beauty and outdoor recreational activities.
Following a spike in demand that agents reported in the summer of 2020, by November 2020 Coeur d’Alene’s median list price had jumped to $528,725, bumping the city up to the fifth hottest market, according to Realtor.com’s Market Hotness Index. Then for the first two months of 2021, Coeur d’Alene clinched the hottest market in the country. In January 2021, the metro’s median list price was $696,250 and in February 2021 it was $649,900.
Shortly thereafter, at the end of April, Google searches for Coeur d’Alene real estate hit a high not seen since mid-July 2020, according to Google Trends.
Credit | Google Trends
And prices kept climbing from there.
In June 2021, the median list price was $795,872, up 65 percent year over year. By March 2022, the median list price was $967,500, up 51 percent year over year. As of November 2022, the median list price had come down quite a bit from that peak to $699,000, according to Realtor.com’s Market Hotness Index.
Greg Rowley | Coldwell Banker
“That’s the thing that’s really changed here in Coeur d’Alene the most,” Rowley said. “An entry level house is now $500,000 instead of $250,000. And a luxury house now is $1.5 million, meaning that’s the top 5 percent of the market. So if you spent $1.4 million on a house last year, it wasn’t even considered luxury, wouldn’t have been in the top 5 percent of all sales. But if we go all the way back to like 2016, a $550,000 house would have been considered luxury. So the tolerance for higher prices has really, really, really gone up over the last six, seven years.”
The city’s home sales followed a similar pattern, tracking the market’s heat.
Credit | Redfin
Home sales hit a peak in October 2020 with sales up 37 percent year over year, according to Redfin. Sales continued to see substantial annual growth each month until June 2021 when they finally started to decline on a year-over-year basis, when they were down 2.7 percent year over year. As of December 2022 home sales were down 52.4 percent year over year.
Wendy Davis, of Tomlinson Sotheby’s International Realty, who is also an agent for a North Idaho homebuilder Architerra Homes said the market became so heated by mid-summer 2020 that Architerra had already sold out of the inventory they had planned on for the entire year. Pre-pandemic, Davis’ goal had been to sell two to three of Architerra’s homes per month. After a brief lockdown period at the onset of the pandemic business picked up again, and she was eventually closing nine contracts per month by June 2020.
Wendy Davis | Tomlinson Sotheby’s International Realty
“It was everything — it was investors, it was people locally trying to get into a home and it was people transferring [from out of state],” Davis said. “Coeur d’Alene has always had a high transfer rate, it’s a desirable location and considered a resort area … but as the pandemic went on, as the lockdowns continued, the surge in Washington and Oregon was just off the charts.”
As bidding wars, escalation clauses, waived inspections, paying $100,000 cash over-asking and purchasing sight-unseen became commonplace during the peak of the market’s frenzy, Rowley’s sales figures climbed so high that he was in shock when he learned he was on par with Coldwell Banker’s agents in some of the priciest markets worldwide.
“I was No. 8 in the world in sales volume of the 92,000 Coldwell Banker agents across the globe,” Rowley said. “I got to just under $200 million in sales by 2021 in a town of 40,000 people and I was competing against the agents in Shanghai, Miami Beach, New York City and [cities] like that. Coeur d’Alene, Idaho, was clearly on the map, and COVID did that for us — [the city’s] clean air, clean water, a relatively conservative state without a whole lot of restrictions and mask requirements … So it really became the place that people wanted to be.”
An uncertain 2023 ahead
Agents who Inman spoke with for this story, said that starting in the second half of 2022 the market began a swift cooldown from its frenzied pace of 2020 and 2021. Some properties were still receiving multiple offers, but homes were largely selling at or below asking price and fewer buyers were shopping the market overall.
Agents had mixed thoughts about the year ahead in real estate for Coeur d’Alene. After the market’s unpredictability over the last few years, some were simply unwilling to make any kind of forecast.
“It’s hard to say what 2023 will bring,” Smock said. “In all my years of experience and everything that I read and what I know of our area, it’s really hard to say that values are going to come down drastically. I do think they’re going to come down some — we’re down about 15 percent year over year, but I don’t foresee a major crash on the horizon because we still live in an area that people want to be in. We still live in the great northwest of Idaho where we’ve got four beautiful seasons, a multitude of lakes, ski mountains, hiking, recreation, boating, there’s just so much to do here for almost everyone.”
She added that whatever happens with interest rates in the next year will also certainly influence prices. But overall, she felt the market would settle into a more balanced one with time.
“Everyone in the country experienced a slowdown with an increase in interest rates,” Sweet said. “But after that initial sticker shock has worn off, we’re seeing a lot of buyers coming back to the market … This past year has been about mitigating expectations and educating on interest rates and the market. I definitely see 2023 being another great year because of that.”
The mixed data that Rowley has seen in recent weeks left him feeling like he’s not quite sure which way the market will go next. At the end of 2022, he sold a $5 million property at full asking price but also sold two $2 million properties for about 80 percent of asking price. But the big thing he’s seeing right now from buyers is a lack of urgency, even while high-end buyers continue to look at homes, and it’s unclear when or if that will return.
“We definitely saw a lot of people going, ‘You know, I love the house, but I’m not feeling the pressure to have to own it today,’ ” Rowley said. ” ‘Maybe I’ll come back in the spring and see if the price is adjusted between then and now.’ And that’s definitely the shift, the lack of urgency. There are still active buyers and I’m still writing contracts and I’m still busy. We’re not in a recession — but we’re not in a gold rush situation.”
