According to the Coeur d’Alene Association of Realtors, the median sales prices of homes in Kootenai County in August were up 40% from a year prior, to $470,000.
Likely reasons for the huge jump include low interest rates plus pandemic-related distortions, such as the ability of tech workers to work from home, a desire for lower density, the fact that Idaho had few, if any, restrictions during the pandemic, and possibly, a desire to move to a place that has values that are more closely aligned, politically or religiously, to some people fleeing California.
A 40% increase per year is unsustainable, of course. Local incomes are not high enough and not increasing quickly enough to justify such price increases. If companies start requiring people to come back into the office, even one day a week, some of the migration trends may reverse, at least to some extent. We are already seeing a slowdown in the frantic home selling as more inventory comes on to the market and fewer people move. This inventory will likely increase when foreclosures resume and after they slowly work their way through the foreclosure process. Boise is experiencing a significant slow down in real estate buying activity as people from California are not moving as quickly as they were.
Some people in Coeur d’Alene and Post Falls are also likely to cross over to the Spokane Valley, where prices are lower. Long time residents may remember when Post Falls was always less expensive than Spokane, partly due to the fact that Washington has no state income tax while Idaho does. This will also reduce pressure on Kootenai County home prices. On the other hand, businesses may move over the state line from Washington State to Idaho now that the income tax difference does not seem like enough when considering total tax burden on business as well as labor costs and an increasingly authoritarian government in Washington State.
I personally don’t expect another 40% increase between August 2021 and August 2022. However, it is clear that Coeur d’Alene is a place that is now clearly on the radar of retirees. In the future, in normal, non-Covid times, a slow migration (and transformation) of Coeur d’Alene is likely to continue.