Homes-Listed Inventory Levels

The number of homes listed for sale in Alaska MLS Inc stood at 1202 at the end of September. This is the fourth month in a row that the inventory has come to rest at this same level.

There was a surge of new inventory beginning in late spring. The number of homes for sale has doubled. Everyone's been talking about it. We are still a couple hundred listings below what was "normal" in the decade of the 1990's, however. I would characterize the current decade as an abnormal market.

A reporter asked me yesterday, in connection with the interview I did for Channel 2 news, if there are more buyers than sellers in the market. I'm not sure how to measure that. But I would interpret the leveling of the inventory as a sign that buyer demand and seller supply are back in balance.

There's usually a decline in inventory during the winter. There are a fair number of "wanna-be" sellers with overpriced property listings out there. If they don't achieve their unrealistic objectives this month, many will give up.

Sellers who want to create a sale face less competition during the dark months. Buyers at that time of year can expect to find good values then, too.

Right now is actually a good time for the value-conscious buyer. Good properties are still available; not all the best properties have been chosen. A buyer who deals with a seller who is committed to creating a sale before winter can be pleasantly surprised.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

August MLS Reports Show Balanced Supply/Demand

August reports just published by Alaska MLS Inc. document the continuing trend toward normal market conditions.

The number of sales contracts inked for existing and new construction homes and condos is off 6.5% compared with last year. This represents a return to historic levels of property turnover since the current long-term market recovery began in 1990.

The number of homes for sale (not including condos) stands at 1197. Inventory was at 1100-1300 all through the 1990's.

The existing inventory is fresh. Much of the increase from the chronic short-inventory levels of the past six years -- when only 500-600 homes were for sale in most months -- came to the market this summer. This is evidenced by the current listing inventory showing only 60 days marketing time, compared with last year's 610 homes for sale showing 96 days-on-market.

How long it actually takes a home to sell is what's important to sellers. That has hardly changed in recent years: 46 days for year-to-date sales in 2004 and 42 days for the same time frame last year and so far this year. Homes that experience exessive marketing time, over 90 days, miss the market's enthusiasm for fresh listings and become shopworn.

With demand relatively constant, and supply returning to normal levels, price appreciation has moderated accordingly. Compared with double-digit appreciation rates in recent years, 2006 is showing signs of about 6%-7% inflation. (Nothing suggest a decline in value.)

The average home in Anchorage now prices at about $325,000. Absorption calculations compare the amount of inventory with the rate of sales. For homes priced at the average low-$300,000 level, MLS estimates there is about a five month supply.

Supply of four to six months is an indicator of a balanced market. More than that -- such as the eleven-month supply of homes priced above $500,000 -- suggests a buyer's market. Less supply -- such as the 2.4 month supply of homes priced under $250,000 -- indicates a buyer's market.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

ADN Real Estate story -- Reaction from Ken Gain

Ken Gain is a respected long-time real estate licensee who has just about every credential one could imagine. Here's his reaction to the Daily News story published yesterday, posted here with permission:

"What I see is what statisticians refer to as "reversion to the mean". The market is still very strong and in my opinion is a much healthier market because it is forcing both buyer and sellers to negotiate and use sound judgment. Balanced markets are, in my opinion, always better than buyer's markets or seller's markets. I was somewhat concerned over the last several years where people who really understand little about real estate or markets in general were wrapping them selves in the cloak of infallibility by pronouncing that "you can't go wrong with real estate". Fortunately, we didn't see a huge upsurge of investor purchases of homes that occurred in many markets. You can be certain that when properties are purchased only in anticipation of flipping them in a short time, rather than occupying or renting them, that a significant correction is only several years away. A market based upon the "greater fool theory" is a dangerous market. In summary, I believe that the recent cooling of the market is very good for everyone."

Ken Gain, PresidentCA$H NOW Financial Corp.Phone (907)279-8551Fax (907)274-7630 Website--http://cash4you.net

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Anchorage Daily News Real Estate story

Here's the link to the page one story about the Anchorage real estate market that ran in today's Anchorage Daily News. I thought it was a fair and balanced report: http://www.adn.com/news/alaska/story/8178223p-8071036c.html

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Are foreclosures on the increase in Anchorage?

I have been wondering whether foreclosure rates are rising. In recent months I seem to be receiving more properties from institutional owners after they foreclose on them. It could be another sign of a market that is making a transition to more normal conditions.

I'm not seeing a glut of foreclosures. A small proportion of any loan investor's portfolio will fail to perform, no matter how strong a market is.

None of these properties is from Alaska Housing Finance. They are a more conservative investor, with a reputation for higher property standards. Delinquency rates for homes financed by AHFC, an early indicator of the health of any loan portfolio, rarely top four percent. AHFC only forclosed on 19 properties through July this year, compared with 18 for the same seven months of last year.

AHFC's multifamily loan portfolio, by contrast, showed a 3.70% delinquency at the end of July, compared with 2.07% in July, 2005. All through 2005 loan delinquency in the AHFC multifamily portfolio was at the low two percent level. This year it's been over three percent in four of the first seven months of the year.

Other more adventuresome lenders, by contrast, may have more of their loans getting into trouble. That could explain why I'm marketing more foreclosed homes and small income properties now.

By the way, I publish upcoming listings, including foreclosures, on the front page of my web site at this URL: http://www.reals8.com/index.html#comingsoon. There are some asset management sites that show me as the upcoming marketing representative on their properties, too. This is often weeks and sometimes months ahead of the property being cleaned, appraised and otherwise made ready for market, with a list price and available for offers.

So I make it my practice to note the names and phone numbers or Email addresses of anyone who wants to know about these properties on the first official listing day. I'm diligent about this. Such people have taken the trouble to let me know of their interest, so it's just professional courtesy, I believe, to see that they get the earliest opportunity.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

July Market Data: More Homes, Constant Demand

Alaska MLS, Inc. published its July reports today showing that 1105 homes were for sale at the end last month, more than any July since 1999.

Through the '90's we had about 1200-1400 homes for sale. In recent years the housing shortage has given buyers only about 600 homes to choose from.

Demand is relatively constant, however. Closed sale reports year-to-date are down only 4.6% compared with last year, and 6.3% under 2004.

Prices continue their upward trend. The average sale price this year $309,824. This is about 6.5% above the average at this time last year. Higher mortgage rates -- 30 year loans are pricing about a half-percent above last summer -- have added to the cost of home ownership.

Mortgage costs and purchase price are combined with utilities by the US Labor Dept. for the housing component of the Consumer Price Index, which they reported this week went up 4.2% in Anchorage last year.

So consumer demand seems constant but the cost of home ownership continues to rise. With more homes to choose from, however, buyers may take longer and the time it takes to sell a home may increase somewhat. So far that's not happened: 43 days is the average selling time for the 1720 sales so far this year, the same as last year and four days less than two years ago. Nationally marketing times of 60-90 days are considered normal.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Fear Reaction to BP Prudhoe Bay Closing will be Brief

The news of BP closing Prudhoe Bay oil fields while the firm replaces corroded feeder pipelines will startle the real estate market here, at least briefly. Uncertainty always first triggers a fear reaction. In real estate this means buyers will hold back from the commitment of investing in a home, or making a decision about commercial property.

Then things sort themselves out. In the interim, demand just builds. People die, change jobs, get married or divorced, retire, have kids. Businesses expand, contract, or change mission. Their housing needs and business real estate requirements are still there.

So at some point everyone gets going again, and makes their purchase, or business leasing decision. Those become very busy weeks for us real estate folks.

I would predict the impact of this news from BP will be brief. People will quickly appreciate that economic activity and corporate spending that impacts the Alaska economy is good for the real estate market. BP's new project at Prudhoe Bay will be a very significant reinvestment of capital.

As one of my friends within the oil industry, puts it, "Once the market recovers from the initial shock of the news, I think you'll find that there is going to be significant activity. Replacing the oil feeder lines at Prudhoe Bay is no small task and will require an army of workers together with some high powered help from the Engineering contractors. That together with the rest of the Alaska activity is going to keep the economy strong for some time to come."

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Anchorage homes for sale top recent records

Anchorage’s summer market sees more homes for sale at this time of year than any year since 1999. Although the number of reported sales has declined year-to-date by 4.8%, prices continue to rise.

The average selling price of a home in Anchorage crossed the $300,000 line in April, a first for Anchorage. The average sales price in June was a whopping $340,175!

Homes are still selling in 45 days, about the same as the past four years. The average gap between the last listed price and the closed sale price is the narrowest it has ever been: 0.56%.

These facts suggest that market appreciation may still achieve double-digit levels this year. It’s been 9%-12% in each of the years 2001-2005. So far this year our average price is 5.95% above the end of last year. We can’t have short market times and homes selling very close to list and not believe that demand still outstrips supply.

It is refreshing, however, to see more inventory. Total homes listed for sale through MLS have been in the 500-600 range since late 2000, even dropping below 500 a few times. Now we have just seen a surge of 654 new listings in June to bring the month-end total to 963.

If there is a soft spot in the market, it’s upper-end homes. The million-dollar home used to be unusual: now there are 25 for sale. But with only one or two a month selling, this inventory constitutes a 21 month supply. The inventory of homes from $750,000 to $1 million is 14 months. By contrast, under $250,000 there is only a two month supply.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Upper End Inventory in Oversupply

As of today there are 76 homes for sale from $700,000 to $1.5 million. In the lower half of this range the rate of home sales for the past 12 months has been three per month. Above $1 million the average is one per month.

This works out to available inventories of just about 17 months and just over two years, respectively. By comparison, the supply of mid-range homes, $350K to $750K is about six months. Below that range, the supply is only one to three months at best.

The good news is that the upper-end homes that have sold have enjoyed relatively brief marketing times, often under 90 days, and less than a month in several cases. This means that a large portion of the inventory is not reasonably priced. However, the home that is priced at market will sell.

Those that languish will end up selling for less than they would if correctly priced at the outset. Sadly, some other more optimistic sellers will altogether withdraw from a market that has rejected their properties.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Property Tax Payment Due June 15

This year my wife and I won't forget to ask each other whether one of us paid the first half property taxes! Judith and I did forget one year, and to our chagrin learned that the penalty is 10% of the payment amount, several hundred dollars in our case. There's interest on the unpaid amount, too.

Most people have their property taxes paid from their lender's escrow account, so no worries. But if you don't have an escrow, you have to remember to pay that first half tax bill with a check mailed by midnight next Thursday, June 15. (They don't have to receive it, just have it postmarked by then.)

If over the years you have built up a substantial equity in your property and there is still in place an escrow for taxes and insurance, consider asking your lender to excuse you from it. Assuming you are a good money manager, pay these bills yourself when they are due. Otherwise you are simply making your lender an interest-free loan of more than enough money to cover these expenses!

If you closed a purchase or sale this year it is likely that the taxes were paid for the year at that time. There would have been a proration between buyer and seller. Don't forget to write off your share when you do your taxes next year.

Don't bother with the options of paying by direct debit, or credit card. They charge 3%, more than the cost of just buying airline miles, if that's your motivation.

These and other FAQ's are on the MUNI's web site at this location.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Niel's Web Resources Enhanced

I'm offering enhanced resources for sellers, as well as buyers, on my web site. "What's My Home Worth" is especially popular. Owners can get an EMail valuation. The Seller-oriented page is here.

The equivalent page for Buyers is here.

People tell me the Anchorage Real Estate Podcast, a short on-line radio interview on market conditions, is a first for Anchorage real estate information. And the push-to-talk-to-me button is popular: even my mother in Vermont uses it.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Building Permits Hold Steady

The MOA Building Safety folks report 164 new home permits issued through April this year, the same as last year. In 2004 and 2003, however, the equivalent permit level was about 50% more, around 250 each year. Land use permits for Eagle River totaled 77, the same as last year.

The MOA's system for reporting remodeling permits was changed this year to include everything that requires a permit, such as replacing a water heater. Now it is not as easy from their reports to track whether larger-scale remodeling activity is up.

From industry contacts and conversations with contractors, however, it does appear that more people are undertaking to update and even expand their homes. This could be attributed in part to fewer new homes available. But also we have a large number of homes that are now 25 years old from the early 80's building boom that are in need of modernization.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Anchorage Home Sale Prices Top $300,000

The average year-to-date selling price of a home in Anchorage has just topped $300,000. At the same time last year it was a little under $270,000. By contrast with the Lower 48, however, Anchorage homes are less costly. Average home values in many equivalent markets are closer to $400,000 at this time.

The year-to-date total of closed sale reports reaching Alaska MLS Inc. through April is lower this year: 822 vs. 899. These are reports of contracts agreed to a month or two earlier in most cases. The data through May should be available in about two weeks.

Meanwhile, the number of homes listed for sale at the end of every month this year has been higher than most years since 2002. For the past four years the springtime inventory has been around 500. This April the inventory rose to 622, higher than any late winter and spring inventory levels since 2001.

Given that prices are continuing to rise, I would say that inventories have not yet reached levels where supply exceeds demand.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Homes by Email

No need to contact a real estate licensee to get daily reports of homes for any profile you specify, straight to your Email inbox. Use this link.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Quick and Easy MLS Access

Find all the MLS listings in one place, no hassle access. The same database, the same listings, that all the real estate licensees work from. Use this link.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Unrepresented Owner?

Trying to sell a property without professional representation? (FSBO) Please a free web ad, with no licensee involvement or representation. Buyers will contact you directly. Use this link.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Free Home Sale Preparation

If you are planning a home sale anytime soon, get the free web-based presentation to prepare you for the process. You can also order the CD version, with many interactive features. Use the links at the top of this page at RealS8.com.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

What's My Home Worth?

Get an analysis of your home's worth e-mailed to your in-box, without even the need to call me, or any real estate licensee. Use this link.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

MLS Annual Statistics Posted

MLS came out with its annual market statistics for 2005 this week. While none of the market-wide reports carry any big surprises, there are some factoids deeper in the data I found interesting:

• The average selling price of the 132 new and existing homes in the south part of Hillside last year was almost $550,000. This represents a whopping 16.2% price increase over 2004 and 34.8% above the end of 2003.
• The average time on market for a resale home, or a condo, in Anchorage was only 32 days, the shortest in 11 years. (In 1994 the average was 71 days for houses, 106 days for condos.)
• Existing homes in Anchorage posted a 13.0% gain, compared with 17.3% for new construction. This reflects the increasing shortage of buildable home sites, and dramatic increases on the cost of construction materials. The blended rate of increase of both existing and new homes, 3261 sales, was 12.51%.
• There were 11 homes sale reports over $1 million, compared with seven in 2004. Three of the 2005 million dollar homes were new construction; only one was in 2004.
• Seven percent of the 3261 homes sold in 2005 were above $500,000. The year before the proporation of half-million dollar homes was only 4.52% of sales. Five years ago, in the year 2000, only 2.3% of homes sold were priced above even $400,000, the top price bracket that MLS tracked before 2004.
• New construction condo sales surged to an average selling price over $200,000 for the first time in history. The average was influenced by the construction and sale of 39 new condos in several projects downtown with an average selling price of nearly $354,000.
• With the advent of site condo construction in 2001, MLS has reported between 411 and 471 new construction condo sales per year until last year. Suddenly the total last year jumped to 577 new units.
• The gap between last price an existing home sold for and its listed price at the time last year was 1.0% compared with 1.5% in 2004.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Anchorage Market cools, good values emerging

As the Anchorage home market cools somewhat, better values are emerging for those who are prepared to shop carefully. This is the time to be aware of the true value of a home before making an offer to purchase, however.

The market slowed over the winter, when fewer homes went under contract than normal. We rebounded in March to a little under last year's level, but the slow winter meant that closed sales reports reaching MLS have lagged. Through the first quarter there have been an average of 621 homes reported sold for the past five years. This year's January-March report shows only 574 homes sold.

The inventory of available homes has grown somewhat. Where there were 503 homes available at the end of March last year, now there are 561 on the market.

Overall price levels are certainly not declining. Last year a home in the Anchorage bowl carried an asking price of a little over $387,000. Now it's almost $403,000. Eagle River prices are $22,000 more; Chugiak is about $10,000 above Anchorage.

Sellers are making deals, however. There are more "price reduced" signs and ads running and homes are not just sitting. Indeed, the average time on market for homes in the Anchorage bowl last year at this time was 93 days. The current inventory shows a market time of 59 days.

If a seller by reason of birth, marriage, divorce, death or job change has to create a sale, he or she will do what it takes. If the initial asking price doesn't produce a sale, the price comes down to market quickly. That's why throughout the MLS system sellers achieve over 99% of the last price listed in the eventual sale price.

I've just published the MLS first quarter statistics from which this post is gleaned. Use this link.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Slight Sales Decline in Early 2006

I've just posted real estate statistical reports from Alaska MLS Inc. showing market activity through February. I'm watching the data closely this spring for signs of any market slowdown.

It might be a stretch to divine any weakening of market activity from the early data. Closed sales reports for February and January reflect deals that were done late last year. A better early indicator is the number of transactions that were showing as pending at the end of January and February.

This year the pending file is in the low 200's. Last year it went from a little under 300 to just over 300 by February. Two years ago it was about the same as last year. So there have been fewer property sales so far this year.

This has not been accompanied by an increase in the number of homes for sale, however. At this time of year there have always been a little under 600 residential listings in MLS. The inventory stood at 558 at the end of last month this year.

The average sales price topped $310,000 for the first time ever on a year-to-date basis. The average price for last year on one report -- MLS has not yet published comprehensive year-end data -- was $291,013. The February closed sales average $315,751.

That preliminary average sales price for last year is an increase over 2004 of 12.13%.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Your home value: the buzz about Zillow

A web-based home valuation service called zillow.com has been receiving much buzz around the country. You just type in your address (or anyone else's) and it returns an estimate and maps.

Some of the buzz is coming from fearful real estate agents who wonder if such a tool threatens their business model. (Some go so far as to hope they don't enhance the buzz by using the word Willow in their on-line posts.)

To the extent that their business model is based on being the gatekeeper to real estate data, perhaps it does. For those of us who moved long ago to being the trusted adviser and the interpreter of data, it does not.

Zillow's estimates in Alaska are probably just an extrapolation of property tax data. If you use the Zillow function to ask about comparable sales here, the site replies there are none. After all, there is no law requiring property sales to be reported in public, or to taxing authorities. Mass appraisal techniques lead to assessed values, which are often uneven for individual properties.

Zillow's graphing function in the case of my home produced the amusing assertion that it went up in value since last summer from about $334,000 to $396,000. To the extent that I trust myself as a "trusted real estate advisor" I'd question where this comes from. I would also trust my advice that with only a single garage, the home isn't worth this much now, even though the location is superior and the home is remodeled and well-maintained.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Economic Forecast slides available

Every year in January all us real estate pundits come out with our real estate and economic forecasts. There is a sucession of luncheons. I was the presenter at the Anchorage Board of Realtors event.

Similar events in January are by the Building Owners and Managers (BOMA) chapter, Anchorage Economic Development Corporation (AEDC, which had Robert Reich as its headliner).

I've posted links to each of these presentations on my site on this page.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Anchorage Indicators reports published

Anchorage has now updated and published their popular set of economic indicators. They call it the Neighborhood Sourcebook. The page is off the link in the previous sentence. Check it out, it's very comprehensive.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.

Housing Bubble Won't Happen in Anchorage

Here's a link to the Anchorage Daily News interview with me today: "Balloon in real estate won't bust, agents say".

The story quotes material from my presentation at the Anchorage Board of Realtors annual economic and real estate forecast luncheon Wednesday of this week. I'll post the pertinent slide to my main web site if you would like the details of the data.

For full property searches, virtual tours and many other Anchorage real estate resources, visit RealS8.com.