Catalysis that would trend anchorage real estate down (Prudhoe Bay: sales, 2013)

[highlife2]

What catalysts would cause a dramatic move downward in housing prices in anchorage. Of most interest to myself would be the basher or sand lake area or the sweet spot on the hill side. Does anyone know of a good finanical advisor in anchorage. I think it would be good to keep money in an investment account that is liquid in order to exploit any events that may occure, such as when platnum prices went to well under $1000/oz or when housing took a major dump in anchorage in the 80's. Gotta have the money when these sorts of opprotunities present themselves, if your leveraged out you wont be able to exploit these events.

What are other peoples plans, I went on the MLS and looked at prices of some places in sand lake area and its pretty steep, I would like to retire someday and not be house poor for the next 30 years so I guess I will just deal with the prowlers and wierdos in the less desirable areas until a catalyst hits.

[GnomadAK]

Anything that would cause house prices to fall is an event that would sack the whole economy. The last time prices fell was the late 80's depression and they have steadily climbed since then.....we recently moved from Alaska and sold the house I bought in 1988 for roughly 4 times the original price. The last real opportunity to reduce real estate prices was the "bridge to nowhere" across the arm, opening up new areas for housing, and that is dead, a victim of paralysis by analysis.

[Dakster]

I seem to recall a big housing fall starting in 2007 - at everywhere else in the U.S.

[richelles]

I watched prices in Anchorage hit highs (For my series of observations) about 2007 and fall about 25% between then and 2010. From then until 2013 (Now) prices have not fully recovered and using inflation as a guidepost they are at or below the 2010 level now. My observations are based on condo prices and new construction and first sales thereafter. Many of those first sales after the initial purchase appeared to be below the initial purchase price but I don't remember any sales where the owner had to buy down the mortgage to get out from under the current value. In several locations there were foreclosures but whether those were because the property was underwater compared to the mortgage or because of economic factors I didn't check to see the cause. However there was a problem getting a mortgage during much of that period of time unless you were a person who could have paid cash for the property so speculation wasn't a good idea during the period of time involved being prices could continue to fall because there were no willing buyers who could get financing. Speculation on real estate now is a guess that the economy is going to grow during the speculation period of time. However the idiots in Congress are capable of destroying the economy with their foolishness every few months so its much better to keep your money in the stock market because you can sell stocks in a hurry unlike real estate which needs liquidity to be sold. Remember days on the market are only now becoming favorable to sellers.

[highlife2]

Originally Posted by richelles

I watched prices in Anchorage hit highs (For my series of observations) about 2007 and fall about 25% between then and 2010. From then until 2013 (Now) prices have not fully recovered and using inflation as a guidepost they are at or below the 2010 level now. My observations are based on condo prices and new construction and first sales thereafter. Many of those first sales after the initial purchase appeared to be below the initial purchase price but I don't remember any sales where the owner had to buy down the mortgage to get out from under the current value. In several locations there were foreclosures but whether those were because the property was underwater compared to the mortgage or because of economic factors I didn't check to see the cause. However there was a problem getting a mortgage during much of that period of time unless you were a person who could have paid cash for the property so speculation wasn't a good idea during the period of time involved being prices could continue to fall because there were no willing buyers who could get financing. Speculation on real estate now is a guess that the economy is going to grow during the speculation period of time. However the idiots in Congress are capable of destroying the economy with their foolishness every few months so its much better to keep your money in the stock market because you can sell stocks in a hurry unlike real estate which needs liquidity to be sold. Remember days on the market are only now becoming favorable to sellers.

I actually experienced this with selling my condo a few years ago, I had to write a check for $1000 which is not really much underwater but it was the last thing I was expecting to have to do in south anchorage. I have been getting on the MLS as of late and the areas I would want to live are still close to or over 500k, these are not huge mega homes but are in nice areas (like west of sand lake). I do like the strategy of putting money back into tda and letting it ride on a modest amount of risk with index funds and such. That way if there is an event (like they scale back the military base which they should have dont a long time ago, all they really need are the planes and thoes that are directly involved with keeping them flying all the rest is flim flam or build the bridge) I can jump when housing takes a dump.

Of course even if they did build the bridge the only valuable property would be immediatly on the other side, anything further out would be the equivalent to driving to eagle river with the bridge being a similar bottle neck as the glenn from eagle river from rubber neckers or what have you, which is why I refuse to live in eagle river.

At the end of the day for me buying a small condo with a large garage with a huge down payment may be what I do, as long as I can get it cheap enough and have enough down so that my total housing costs are low enough that I can always make money renting it out if I needed too without being exposed to the selling market again with a condo. I am not fond of condos because they can loose FHA financing options overnight but I also want to retire before im 80 so half million dollar town homes (with either a huge down payment or tolerating huge monthly payments) dont quite cut it.

[AlaskaErik]

The bridge to nowhere, which in reality is the bridge to the Mat-Su valley and which will allow those who want to work in Anchorage be able to have access to a huge new area to build and live and that's within easy commuting distance to downtown and other parts of Anchorage. That is one of the reasons there is so much resistance to building it. Anchorage home prices will plummet.

[AK76]

The demise of the oil and gas industry will have people leaving the state like rats from a burning ship. The State legislature and Congress continue to hobble the producers in Alaska as they eat the dust of the frackers in the L48.

[Dakster]

Originally Posted by AK76

The demise of the oil and gas industry will have people leaving the state like rats from a burning ship. The State legislature and Congress continue to hobble the producers in Alaska as they eat the dust of the frackers in the L48.

Wouldn't ANWR be opened up? or other areas before that happened? Isn't what is going on just a delay tactic?

[AK76]

Originally Posted by Dakster

Wouldn't ANWR be opened up? or other areas before that happened? Isn't what is going on just a delay tactic?

ANWR was "opened up" by congress in the recent past only to be vetoed by the president. As far a delay tactic, I think it certainly is, delay/overregulate industry in america as long and as much as possible in hopes of detroying it to the point that as many as possible are government dependent. The only reason oil production is at historic record high levels in America right now as a whole, is that the oil being extracted now is on private land and the president, thankfully, can do nothing about it, nor is he or his admistration responsible or deserved of credit for it.

The oil and gas producers in Alaska are subject to the most restrictive environmental regulations on earth while the rate of oil extracted continues to decline. At some point, and I think it is sooner rather than later, there will be a point a of deminishing returns come to be realised and the "industry" will close it doors.

This is the only foreseeable catalyst I can see.

[Dakster]

Now that AK has fallen to the 4th position in amount of oil extracted, that catalyst could be starting as we type this.

It could mean a state income, sales, and/or property taxes. Not sure how that would effect the Alaskan housing market, but it would make moving to AK and dealing with the isolation and weather not as attractive.

If I was an oil company, looking at the weather, isolation, high labor cost, and taxes/royalties companies must deal with to get oil out of Prudhoe Bay - why would you go there when California, North Dakota, Colorado and now Kansas are producing large amounts of oil? I live about as far away from North Dakota as you can and still be in the continental US and it is only 32 driving hours away (give or take).

Also with 'mines' being fought against as well (like Pebble) - My question to all of the Alaskans here is, what is the plan for Alaska to support itself in the future?

Just wondering what everyone in AK thinks or believes should happen. I realize that there are a lot of differences of opinion. I haven't stated mine and don't believe I have enough information to form one anyways.