Apartment market continues to sizzle
By David Cole
NIBJ writer
(As reprinted from the North Idaho Business Journal- October, 2015)
“Very strong” would be a good way to describe demand for apartments in Kootenai County.
The Spokane-Kootenai County Real Estate Research Committee published an over vacancy rate of 1.8 percent in Kootenai County in June 2014.
That marked a 20-plus year low, said Glenn Sather, a real estate agent and “The Apartment Broker” for Coldwell Banker Commercial Schneidmiller Realty.
Earlier this year, Sather was a speaker at a real estate market forum in Coeur d’Alene attended by hundreds of people with ties to real estate in the region. He said at that time the county was seeing an explosion of apartment projects, with 500 units permitted in 2014 and 500 more in the pipeline for this year.
The five-year average had been only 300 units, and the county historically showed it could absorb 200. That put the county 50 percent above normal.
But Sather, who owns apartments and markets them in Kootenai County, knows that jot streak will cycle through, it’s slowed some, but is still humming along.
“The apartment market, like any free market, is very efficient,” he said recently. “Right now things are good for owners.”
He cautioned that the supply and demand dynamic will eventually stabilize and it will be back to business as usual.
“That is OK, because the apartment business is the long-term proposition,” Sather said.
A lot of the apartment construction is happening in Coeur d’Alene.
This summer alone- in June, July, and August- the city of Coeur d’Alene approved 15 more permits for construction of new apartment buildings, according to documents from city building officials.
Lat year, between March and July, the city approved 18 permits for 143 units.
So what is driving the demand in Coeur d’Alene and the rest of the county? “That’s anybody’s guess,” Sather said. “But, the quality of life seems to be the answer in my opinion.”
He doesn’t believe it’s wages or high-tech job opportunities. At least not yet.
“I’ll point to the (San Francisco) Bay area, Seattle and other primary markets, where high-paying tech jobs have recently spiked dramatic activity and growth in the apartment sector,” Sather said.
One way to partially determine who is filling the apartments in Coeur d’Alene and its surrounding cities is to look at the Idaho Transportation Department’s records on drivers who change their license from another state’s to Idaho’s.
Net driver’s license surrenders increased in Kootenai County by more than 5 percent in 2014 compared with 2013.
While that positive year-over-year license surrender growth rate is impressive he said, it’s down from 13 percent in 2013 and 20 percent in 2012.
Idaho is receiving many of its transplants from Washington State but many other are from California, Oregon, Montana, and Colorado.
Some become short-term apartment tenants while they acquaint themselves with the county before buying a home. “Many of the new arrivals become long-term tenants- about 35 percent,” Sather said.
