Real estate correction in Anchorage? (sale, foreclosure, skateboarding)

[jdhpa]

You have several alternatives (start a side business, get a fixer-upper, live frugally, and more I'm sure). You just have to choose something that works for you.

As far as the 1970's home owners, while they're in good position now because the value of their property has inflated over 40 years, I suspect when they bought their homes it was a financial strain for a long time.

[hogfamily]

Do you think that 70s home owner is going to sell you his / her house for what they paid for it? What about inflation, upgrades / remodeling, and yes a profit.

[highlife2]

Originally Posted by hogfamily

Do you think that 70s home owner is going to sell you his / her house for what they paid for it? What about inflation, upgrades / remodeling, and yes a profit.

Of course not but I wont be the one to make them filthy rich and eat beans and rice to do it.

[hogfamily]

Well... I can't help anyone who consistently finds their glass half empty.

[highlife2]

Originally Posted by hogfamily

Well... I can't help anyone who consistently finds their glass half empty.

Its simply a sellers market right now so all there is to do is wait. I have been talking and researching and there are more forclosures poping up and the sellers who thought they had everyone over a barrel are starting to see prices erode away. I have co-workers trying to move to anchorage but they are not willing to spend an extra 200k to maintain the equivalent house like they have in the valley. 200k is ALOT of money. The coworkers realitor recommended to make REALLY low ball offers, like 100k or more under asking and just see what happens, otherwise they said its not worth buying right now. Also the bridge is becomming a real possibilty which will slash prices more than people think, property owners scoff at 50% home value loss but when they put the bridge in the reduction in prices wont be trivial and really thats the whole point of the bridge is to get the economy going so everyone is not hunkered down waiting teh only way that will happen is drastic decreases in real estate prices. Most people wont budge their hunkered down position for a 10% decline.

alot of these properties are not being upkept either because the owners are getting arrogant about thinking they have people in a corner. I was trying to move apts and its like pink bath tubs with dated run down paint, floors, etc. When the rude awakening comes I will start shopping.

[Dakster]

About this bridge. Please help me understand this as I must be looking at something incorrectly. Here is my research thoughts. I looked at the place it would be put in online and then I went and looked at the land on the other side of the bridge. It's gonna take a while for "close" houses to be built on the other side of that bridge in any significant numbers to relieve the low supply of available housing in Anchorage. I see a whole lot of vacant land and a few houses. In addition, to me it doesn't look like it will save all that much time for most people who currently commute from Wasilla/Palmer to Anchorage. Am I missing something? Also, isn't there a toll proposed to help pay for the bridge? To me the proposed thrown around the room toll amounts of $5 each way, may make it less economical to go that route.

I also wonder just how much fun that bridge crossing will be in "winter" with snow, ice, and wind.... My limited winter knowledge is that bridges over water in the winter can get nasty fast.

Housing is all about supply, demand, and affordability. As long as you have people willing to pay and can afford to pay, what the sellers are asking - those prices are not going anywhere. As someone who may be moving to Anchorage, I feel your pain highlife2 - I am looking around at buying houses as well. When teh current round of stimulus stops and interest rates go up, you will find housing prices will go down - this is the paradox of still paying too much a month for a house unless you are saving up to pay "cash".

[highlife2]

The bridge is not meant to help people in palmer or even most of Wasilla. Once significant construction starts on the bridge (say 50% complete), real estate developers will start to build like crazy on the other side. Even if there is not enough once the bridge is complete the construction of neighborhoods will continue for years after the bridge is done.

The issue in Anchorage right now is people are NOT willing to pay the asking prices but they have to live somewhere. Alot of people are hunkered down with friends and relatives or 3-4 people will rent a house together. I have done alot of asking around becuase I make probably in the top 10% of incomes in anchorage and I have sticker shock. I think the market has 2 very distinct poles, there are those that are into a mortgage they should have never got into and there are those that bought in the 70's and own their homes outright, the people that own outright have no motivation to lower the prices to the true market value, this creates artificial appraisals so that people who have large mortgages and cant afford to stay here think they can list their house at these hyper inflated prices. The problem is homes are sitting on the market longer and longer. A 1970's guy who owns the house can afford to sit on it almost indefinitly but the guy that has a mortgage cant, so he lists at what these 1970's owners have been listing at and when their house sits for a year they go into forclosure. The may reduce the price a pitance and then wonder why no one is buying. I suspect that even if the bridge is not built as these 1970's owners get older and want to retire the taxes are going to start killing them, but not enough that they will lower the prices by 50%.

The anchorage housing market is in need of a drastic correction, not just 5 and 10% here and there. I see kids being raised in small appartments or in roomate situations becuase the costs are astronomical.

If the bridge results in a 50-60% correction the 5$ toll will be totally worth it, and they will probably offer a discount for regular users or a monthly rate and you get a little thing you put in your window like they do in the lower 48. The sitatuion is truely bad in anchorage, the 1970's land owners in anchorage hate the bridge because they get to feel like fuedel lords making everyone live like peasants small appartments and roomate situations while they let the rental properties get run down because they dont have to make them nice to get high rent prices.

The real estate sitaution is not healthy for Anchorage, alot of anchorage is becoming run down and the economy is stagnating. No one can afford to keep a buisness in the black with real estate that costs a fortune.

Originally Posted by Dakster

About this bridge. Please help me understand this as I must be looking at something incorrectly. Here is my research thoughts. I looked at the place it would be put in online and then I went and looked at the land on the other side of the bridge. It's gonna take a while for "close" houses to be built on the other side of that bridge in any significant numbers to relieve the low supply of available housing in Anchorage. I see a whole lot of vacant land and a few houses. In addition, to me it doesn't look like it will save all that much time for most people who currently commute from Wasilla/Palmer to Anchorage. Am I missing something? Also, isn't there a toll proposed to help pay for the bridge? To me the proposed thrown around the room toll amounts of $5 each way, may make it less economical to go that route.

I also wonder just how much fun that bridge crossing will be in "winter" with snow, ice, and wind.... My limited winter knowledge is that bridges over water in the winter can get nasty fast.

Housing is all about supply, demand, and affordability. As long as you have people willing to pay and can afford to pay, what the sellers are asking - those prices are not going anywhere. As someone who may be moving to Anchorage, I feel your pain highlife2 - I am looking around at buying houses as well. When teh current round of stimulus stops and interest rates go up, you will find housing prices will go down - this is the paradox of still paying too much a month for a house unless you are saving up to pay "cash".

[Dakster]

So you should buy a cheap piece of land on the other side and wait... Then you will make a killing developing it.

I'll give you some insight as to what can happen if a 50%-60% RE value retracement happens, because it happened down here. My neighbor in July 2007 bought his house for $850k. The Market dropped that to $450k by 2009. From 2009 - 2013 (Early 2013) you could barely find a house for sale in my neighborhood, because everyone was upside down. People that saw this coming sold high and rented. A lot of houses changed hands int he 2007-2008 time frame. Then the crash happens, the market gets to a point where there is NO inventory, because no one can afford to sell. You are literally trapped/locked in. The buyers that were barely making it fall to foreclosure, but most just hunker down. The only houses that sorta come on the market are foreclosures, but even the banks won't list them in the depressed market. Why? Because they don't want to take the hit either and lose money on the resale. People who owned their house outright or bought years prior and just want to move will sell, but those were not nearly enough to keep up with demand. So you get to a point where JUNK is all that is on the market. Builders won't build, because they can't sell them at a profit.

Fast forward to today, the market has come back here to about the $600k range. All of a sudden bunches of homes are on the market, why? Because now a lot of people are not trapped, but there is still a ton of trapped inventory in the 2007/2008 highs.

Be careful what you wish for as it just might makes things worse. Even though I used my neighbor as an example, it applied to a whole lot of areas.

That thingy in the windshield you are talking about is a RFID chip - not a huge discount. If anything you are avoiding paying the admin fee for them to bill you by your license plate. Down here at least, they got rid of the toll plazas, so no one stops anymore. They just take a pic of your plate if you don't have one and bill you that way. I would hope that building a new road with a toll that some of the now almost standard toll technology would be included. And AK is even easier since you have 2 plates.

[AKStafford]

Originally Posted by Dakster

In addition, to me it doesn't look like it will save all that much time for most people who currently commute from Wasilla/Palmer to Anchorage.

For most people it won't save time. I'm guessing for anyone living south of Settler's Bay off of KGB it'll be worth going over the bridge time wise. But for most of Wasilla, and certainly all of Palmer, the Glenn will still be faster.
If they improve Burma Road into Big Lake, it would also make it faster from that area.
It would provide a secondary route in case something happens on the Glenn. And it would open new land for development. But it's lands with no (or minimal) roads, no utilities, no schools, no stores, etc... So it'll take some time to really see a benefit.
The most immediate benefit would the trucks that haul stuff from Anchorage to Fairbanks. If a road was built along the new railroad spur between Houston and Port MacKenzie, that would shave at least an hour off of their runs, each way. Also, the Goose Creek Correctional Facility would have access to a bigger pool of employees and the inmates would have quicker trips into Anchorage for court dates.

[Dakster]

Thanks AKStafford - that is about what I was thinking as well. You confirmed my thoughts as being valid.