Real estate revival
8/1/2013 2:05:57 PM
By Craig Howard
In 20 years of selling homes, Doc Williams has seen markets range from bleak to bountiful.
From 2008 to 2011, when real estate sales paralleled the nosedive of the national economy, Williams and other Realtors felt the brunt. The burst of the housing bubble - starting with record-high prices in 2006 to the severe plummet a year later - prompted a somber scenario that U.S. Secretary of the Treasury Henry Paulson described as "the most significant risk to our economy" in October 2007.
"It was the worst market we've ever seen," Williams said. "It was very difficult for a lot of people."
The downturn had a ripple effect on the entire industry, from developers to builders to those who supply the materials to construct homes from the ground up. On the financing side, the tenuous nature of subprime loans proved to be the faulty foundation of a crumbling enterprise. In 2008 alone, there were nearly 2.8 million home foreclosures filed nationwide.
These days, Williams is glad to be out of the shadows once cast by the Great Recession. As a broker with Coldwell Banker Tomlinson, his schedule consists of a steady shuttle between the West Plains, where Coldwell is marketing three communities, to the Legacy Ridge development in Liberty Lake, where Williams and fellow broker Karen O'Donnell are selling homes in the Parkside neighborhood.
"Things are definitely getting better," said Williams, who has a genuine, good-natured delivery that comes in handy on the sales front. "Now, it's really become a situation where we're selling houses faster than they're being built."
BY THE NUMBERS
72 Number of single-family residential permit applications in the city of Liberty Lake in the first six months of 2013
52 The number for the same period in 2012
75 The city of Liberty Lake record for the same period, set in 2007
36 The number of permit applications in 2008 - for the entire year
While sales may be flourishing at levels not seen since the market tumbled, Williams said now it's a game of catch up due to the void left when things went south.
"A lot of people got out of the trade during that time," Williams said. "At the same time, people weren't learning the trade."
Nationwide, 2013 has also been the most encouraging year for home sales since the bubble popped. In May, the National Association of Realtors reported that pending sales in the U.S. had reached their highest level since late 2006. Meanwhile, home foreclosures in the first quarter dropped to a low not seen since 2007. In June, the unemployment rate for construction workers dropped below double digits for the first time since 2008 according to the Associated General Contractors of America.
One entity benefiting from the resurgent market is the city of Liberty Lake. In the first two quarters of 2013, the city processed 72 single-family residential permit applications and collected just short of $250,000 in permit fees. At the mid-year point in 2012, the numbers were good, but not this good - 52 single-family homes and roughly $161,000 in fees.
The figures for the first part of this year set a new record in permit fee revenue since the incorporation of Liberty Lake in 2001 and fell just short of the all-time, halfway mark in single-family permits, set in 2007 at 75. In contrast, only 36 permits were filed in all of 2008.
"We expected the growth to continue in this part of the year, but I don't think we anticipated quite this amount of volume," said Amanda Tainio, the city's planning and building services manager. "The guys (Liberty Lake's two permit specialists) are really running around over here."
Perched on a slope in the south central part of town that was home to the Holiday Hills Ski Resort in the 1970s, Legacy Ridge provides a tranquil setting that features spectacular views of the Valley basin. Williams is currently selling lots in the Parkside area of Legacy Ridge where homes run from $200,000 to $350,000 - lower than the nearby section of Estates at Legacy Ridge.
The rancher - with its single-level layout - is the fastest selling home in Parkside, where the square footage of dwellings ranges from 1,250 to 3,000.
"It's more difficult to find ranchers these days," said Williams. "There were so many multi-level homes built in the last 30 years. I talk to a lot of people who want to get away from stairs."
Whether they are seniors looking to downsize or a family seeking a newer home away from traffic, those who move into a new neighborhood like Legacy Ridge quickly discover a sense of community, Williams said. Residents held their annual neighborhood party in July, and amenities like walking trails and a 7-acre swathe of greenspace add to the communal atmosphere.
"People have just moved here, so everyone is pretty much in the same boat," Williams said.
Splash photos by Craig Howard
While larger, multi-level homes, like this one being constructed on Legacy Ridge, are still finding buyers, ranch-style homes are particularly in demand, said Realtor Doc Williams of Coldwell Banker Tomlinson. "I talk to a lot of people who want to get away from stairs," he said.
Responsible for many of the homes already built in Liberty Lake, Greenstone Homes continues to build in neighborhoods such as Rocky Hill (pictured) and the River District. While Rocky Hill may be built out in the next five or so years, the River District is only about 15 percent built out, said Drew Benado, Greenstone's building division manager.
The emphasis on integrating parks, trails and open space into the residential grid of Liberty Lake is a theme that goes back to the mid-1970s and a developer named Bill Main Sr. Jim Frank, owner of Greenstone Homes, carried on the vision with developments like Meadowwood and Rocky Hill.
"I think to Greenstone's credit, they've always talked about what makes sense for a community," said Liberty Lake Mayor Steve Peterson. "The trail system and the parks make sense. When you look at the housing market, I think the biggest thing that drives it is place. Where are you at? And why are you there? We have the parks, the trails, the lake, close proximity to a freeway system that connects to all the other areas. Place, I think, has been the big thing in Liberty Lake."
Drew Benado, building division manager for Greenstone, said the company has found success in Liberty Lake in part because Frank understands what it takes to "create the fabric of a community."
"It's not enough to just build homes, parks and trails," Benado said. "Jim has been instrumental in the development of programs like Friends of Pavillion Park that sponsors events and activities that get people out of their homes."
Benado says he is "cautiously optimistic" about the latest comeback of the housing industry, emphasizing "there are a lot of external factors that go into the market," such as interest rates that are already beginning to climb.
"I will say that consumer confidence is coming back into the market," Benado said.
During the downturn, Greenstone diversified, building cottages and townhomes in the Rocky Hill area that Benado said were part of the company's "emphasis on creating different price points to appeal to a diverse economic demographic."
Peterson, who has lived in the Spokane area since 1975 and in Liberty Lake since 1998, said builders have adjusted to a changing market over the years.
"We now have a different mix of housing in Liberty Lake," the mayor said. "We have a distinctive mix of product that's available. Along the way, the builders here looked at what the market wanted and they built to that. So, you have a lot of houses that are now one level, you have homes that are more affordable. You have a number of apartment buildings that came in."
From Spokane to North Idaho, Greenstone is now building in 10 different communities as it celebrates its 30th anniversary. While Benado estimates that Rocky Hill will be built out within the next five to seven years, River District to the west is just starting up.
"I'd say River District is only about 15 percent built out right now," said Benado. "It's another area that has lot of different housing products."
One of those areas - Orchard Place - includes a "maintenance-free" feature for homeowners that ensures yards remain manicured throughout the year.
"The goal is to maintain a consistent look and guidelines within the community," Benado said. "You're going to see those home values stay up if people care about where they live."
When it comes to cultivating home and property values, Liberty Lake City Administrator Katy Allen points to an effort that includes most residents of the city under its umbrella.
Allen, who has lived in Liberty Lake for nearly 30 years, said the priority on upkeep within neighborhoods has been sustained by the collection of dedicated homeowner associations throughout the city. HOAs act as an additional layer of accountability separate from municipal government, overseeing the maintenance of amenities that can include landscaping, trees, streets, fencing and more.
"We're fortunate that we have homeowner associations," Allen said. "The residents appreciate the effort that HOAs have put into their green and common areas. I think they have made the difference. If you build in an urban environment without an HOA, a city would be stretched financially to provide the level of services you see here. It's what I call ‘the detail,' it's that extra attention that most cities aren't able to provide."
While homeownwer associations are doing their part to preserve quality neighborhoods in Liberty Lake, local builders also give the city plenty of credit for their role in promoting an environment that welcomes development.
Steve White is the president of Copper Basin Construction, a Post Falls-based company that has a major stake in Legacy Ridge as well as neighborhoods in Spokane, Pullman, Spokane Valley, Post Falls, Sandpoint and Coeur d'Alene. White said the city of Liberty Lake provided valuable support when the company took a chance in Legacy Ridge after the previous builder, Black Rock, lost its property to the bank when the market ruptured.
"We faced some uphill challenges, and the city did a good job of helping us overcome them," White said. "They work well with us and they understand development."
Unlike the days when it was part of the massive sprawl of unincorporated Spokane County, Liberty Lake now provides residents with a dedicated police department, library and parks department . As a Realtor, Williams says he hears good feedback about the city from new homeowners and potential buyers.
"Liberty Lake is not a huge community, but it has the amenities of one," Williams said.
Peterson - who has always promoted the idea of a "safe, clean, green community" - said the establishment of a city has meant "taking dollars and focusing them on what will benefit Liberty Lake."
"If you go into a big melting pot, the money goes into the county," he said. "Now the money stays here and is spent on behalf of the citizens of Liberty Lake."
Like Benado, White is encouraged by the recent trends he sees, but holds off when it comes to sweeping exuberance about the state of the market.
"It's way better than it's been for the last five years, but there are still some challenges," he said.
While foreclosed properties - listing at 15 to 20 percent below market value - may not be clogging the market like they once did, prices on commodities necessary for a home, like lumber and cement, have been increasing.
Joe Kramer, a Realtor with Spokane Valley-based Camden Homes, said the roots of the housing crash can be traced back to the dramatic inflation of prices of up to 15 percent in 2005 and 2006. The typical increase per year is 2 to 3 percent.
Camden Homes has built in both Rocky Hill and the River District with the blessing of Greenstone. In the south Spokane Valley area, Camden communities include Elkridge and Morningside. Camden's owner, Steve Huttle, once worked for Greenstone.
"It was a long downturn," Kramer said. "We'd seen them before but not one that went on for that many years. The market is the best it's been since 2007. Housing demand is ahead of the supply - but it will equalize. Right now, there are a lot of opportunities for us out there."