Alaska Housing Market (Anchorage, Fairbanks, Kenai: loans, relocating, foreclosures)

[detroitmama]

This is a question for all you housing market watchers. Where do you consider the current Alaska Housing market to be at, and which direction is it heading? (buyer's market, seller's, somewhere in between?)

We are moving to the Kenai/Soldotna area this summer. We are planning to buy a home. After a making the trip up there, we have one picked out, but I'm having a hard time deciding what kind of offer to make. For one, I don't know what kind of market I'm dealing with. Some sellers are really reducing prices, while others are holding firm.

Also, it seems as if there isn't a whole lot of consistency of pricing by different home owners. I know that location can make a big difference, but still, it almost seems as if some of the prices are pulled out a hat!

Coming from the Detroit area, where we lost money on a house last year, I just want to make a fair offer, and it's a little hard since I've only been watching the market for a couple of months, and the market is so small, that's it's difficult to get an acurate picture.

Thanks!

[Marty Van Diest]

Every local area is a little different. You just need to look at enough houses in the local area to feel comfortable with your offer.

Just make an offer and see what the seller does.

As far as the direction of the market. It's still hard to say. I think June will tell the story for this year. We certainly don't have a sellers market, I would say it's a buyers market in that there are more sellers than buyers and the inventory in my area is about 8 months. But values haven't gone down much if at all from previous years. They haven't gone up much either.

[Tressa]

I recently sold my house, was never on the market just word of mouth and got what it appraised for. I know that I was very lucky as it was perfect for this guy with a shop across the driveway. I know that we are always hearing positive stuff about the market being steady. I know they've slowed down on condo building in Anchorage. I gaged my house value through zillow.com I found it to be very helpful but there again it's just a gage.

[RayinAK]

My honest opinion, and please take it with a grain of salt. At least around Fairbanks, the housing market is barely holding on, but some people have been selling their houses after lowering the asking price. Problems I see in this area:

The assessment values are too high, which also create high property taxes. At the same time, construction materials are sky high, and this has made it more difficult to folks who want to built their homes. Banks are being more cautious relating to loans in general. On top of that, utilities cost has increase steadily from week to week. At the present trend, heating fuel will hit the $4.00 mark anytime now. in the Fairbanks area, quite a lot of folks with fixed-income are moving back to the lower-48, which in turn will drop more houses to the already slow market.

[RayinAK]

Forgot to mention: in my view, a year or two should tell us how the housing market in Alaska will turn. Everything is brought into Alaska, so as the cost of fuel goes up, so will be shipping products up here. It means that food, as well as every product brought in will cost more each day. Oil is keeping Alaska afloat, but in reality other sources of revenue must be created in order to sustain the economy. Right now the economic forecast for Alaska is not too rosy, unless mining, oil, and natural gas can be produced and moved around.

Something else: the Alaska's economy has been a sort of boom and bust, and back in the '80s a lot of people moved out of Alaska leaving behind homes they could not pay for. This time things look different in that oil and oil property tax revenues are high, as well as property tax in general. This would not be a problem if the cost for utilities and food were low, but that's not the case today. A good indicator of what's to come around Fairbanks at least, could very well be any trend relating to people moving in/out of Fairbanks. When the cost of utilities reaches the $600.00 to $800.00 per month mark, then folks usually start moving South. This is true for people with a fixed-income.

[alaskaboy]

It is all about price in my opinion. Want to sell your home, price it right. As a buyer, lots to choose from and if it is not priced right, it will sit and sit some more.

I priced my home to sell and sell in a hurry. It did in under a week, but honesty having been out looking around for an investment home these past few week for a family member, I now know I sold it way too cheap. I've looked at about 12 homes all priced between $15,000-$23,000 more then mine was priced at, that don't touch my old home. The main difference was "year built" but that did not really apply to my home as everything was almost new. This being said, I am still happy to have sold my home, as I agree with other posters here. The market is hanging on by a thread. Although still technically stable, who knows for how long. With maybe 45 houses per week selling in Anchorage and 30 or so in the valley and over 2000 homes for sale between both places, you can do the math. It is a buyer's market. Had I waited, the price might have had to drop more. I was not willing to assume that risk.

[alaskaboy]

PS. if you're buying a home to resell in a year or two, then now is a very risky time in my opinion. If you plan to live in it for 5-10 years or more, then now is a great time to buy. Remember, a loss is not assumed until you sell. If you're relocating from Detroit to actually live here, then come buy something now.

[BudinAk]

I'm certainly no expert on the housing market, but here's what we observed just 2 months ago:
We were looking to buy a condo in Anchorage for my wife's son, and were amazed to find that there just wasn't much to pick from, and prices seemed high. When we were there, there was only 87 TOTAL condos for sale in all of Anchorage! That's it...just 87. In a city of perhaps 250,000 or so! Out of that 87, we were able to very quickly trim that down to 5 or 6, because of age, condition, # of bedrooms, not having a garage, location, etc, etc. So we looked at the 6, and made a selection out of that in just one afternoon.
We asked the realtor why there was such a low number for sale. He said that basically the builders saw the recession coming, that many of them had been "bit" in the last recession, had seen thier $$$ get locked up in "no sales", and/or fly away, and decided therefore not to build until this recession is over with...to just sit it out and wait. I don't know if that's true or not, only that we saw a very limited number for sale. The problem with a limited number for sale is it tends to hold prices up....the old supply and demand thing....
He asked a good question: they estimate that around 8000 people will move into Anchorage this year (from the south-48). Where will all these new people live? Housing buys might be fantastic in other parts of the country, but prices are still very high in Anchorage, IMO. Decent used 2BR condos seemed to start at around $135,000, and up. A really nice new one, with a garage, was going for right at $159,000....

Bud

[Marty Van Diest]

In the last recession, in 1985-90, the builders just kept on building and the banks just kept on lending. I think 6 local banks went broke. It got bad enough that FDIC eventually ended up owning a lot of the land in the Mat-Su.

They sold it all in one huge auction in 1991.

The banks learned, the builders learned, and the public learned.

Very few builders are building spec homes now. The ones that are put in only one and sometimes two. Banks aren't lending on spec homes unless the builder has committed a very large chunk of cash up front...sometimes 50%.

So we don't have a lot of empty specs on the market. We don't have a lot of empty foreclosures for sale either...last I checked there were only 18 on the market compared to a total inventory of 801 houses in the Mat-Su Borough.

But the market is definitely slower than 2005-2006. We are selling fewer homes by a good margin. The prices haven't risen so if someone bought a home in 2005 they likely will not be able to sell it for enough to recoup their costs of sale.

What is different now is that there are still more people moving in than out. There was a mass exodus in 1985-87. In fact, in 1987, driving down the street to my home in Cottonwood Shores I passed 14 empty houses out of about 20 on my street. Prices dropped by 50% in 3 years.

We are not seeing that here now.

[RayinAK]

We have a lot of houses, and lots around Fairbanks. One of my co-workers sold his after six months on the market. His realtor reduced the price, and then it sold.