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.