Anchorage home prices doubled in a ten-year period from the late 1990’s. In 1997 the average sales price was about $160,000. Residential prices settled in the mid-$320,000 range in 2007 and have stayed there since. We have become accustomed to "normal" while many markets in the Lower 48 and Hawaii have cratered.
The average sale price for the first half of 2011 was $323,914. What about the first six months of last year?
The first half of 2010 was a market driven by a Federal tax incentive of up to $8000 for first-time home buyers and others. Anchorage prices rose slightly as a result. This year prices have retreated 2.5% to about the same level as the previous three years. It's back to "normal" this year.
Our condo market enjoyed a similar surge in sales in the first half of last year, with close to 120 properties per month sold in the second quarter. The norm is about 80. Prices remained stable, in the $190,000 range. The average selling price for the first six months of this year was $196,489.
The number of residential properties sold annually in the first six months of the past four years has been about 25% below the rate of sales during the seven prior years, beginning in 2001. This year has seen 1030 homes sold through June. That’s 8.5% fewer than the 1126 sold in 2010, which was fueled by the tax-credit. This year exceeds 2009, however, which had only 998 sales. Earlier in the decade, the first half sales rate was between 1400 and 1500.
Strong demand and many sales early in the last decade played beside insufficient new home construction. A shortage developed, with fewer than 700 homes for sale being the norm for about six years. In the past four years, by contrast, inventory has returned to historic levels that exceed 1000 in most months. At the end of June this year there were 1120 homes for sale, close to the average of the prior four years.
Comparing the number of homes for sale with the rate of sales per month is another way to consider housing availability. A balanced market has about six months’ worth of homes for sale. Lighter inventory means sellers have an edge. Buyers enjoy an advantage when there is more than six months’ supply. The chart to the left shows how Anchorage is a seller’s market up to about $400,000, with buyers having more bargaining power in the upper-middle and higher price ranges. Condo supply, as shown on the last line, has increased after last year’s strong absorption that was due to tax credit sales.
There are early signs of weakness developing in the market this summer. The number of new (pending) sales reported in June was somewhat below historic norms for the month. Homes have taken longer to sell, 76 days during the first half of this year compared with 65 days last year. There were only 74 pending condo sales this June, where the norm has been closer to 100 in that month.
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