Connie Yoshimura

INSIDE REAL ESTATE: Foreign homebuyers have cash to spend in Alaska

As can be expected, top destinations for foreign homebuyers are the sunshine states of Florida, California, Texas and Arizona.

However, in a little heralded survey in 2015, published by the National Association of Realtors, Alaska ranked number No. 6 as a destination for foreign homebuyers. More recent surveys have dropped Anchorage and Alaska out of the top 20 but the survey reminded me of my first encounter with a foreign homebuyer back in 1984.

INSIDE REAL ESTATE: Let’s talk about lots

Mark Twain said it best, “Buy land because they don’ t make any more of it.”

That still rings true to this day except for Dubai where they are creating islands in the ocean for high rise development. But, back here in Anchorage, buyers are frustrated even trying to find a lot on which to build a new home.

INSIDE REAL ESTATE: Alaska housing agency should build on mission

Congratulations to the Alaska Housing Finance Corp. for being one of the best-managed public housing agencies in the nation. Established 45 years ago to provide “Alaskans access to safe, quality, affordable housing,” its mission is perhaps more important today than ever before.

INSIDE REAL ESTATE: The cost of regulation on housing starts

During a recent presentation in Anchorage, Robert Deitz, chief economist for the National Association of Home Builders, reaffirmed several trends in housing, construction and land development that Anchorage has been experiencing the past few years.

The most startling is that regulatory costs continue to rise — up 29 percent over the last five years. The increase of costs on a single-family include the total effect of building codes, land use, environmental and other rules.

INSIDE REAL ESTATE: Changes proposed for accessory dwelling units

On Oct. 2, the Planning and Zoning Commission will hear a request from the Anchorage Assembly amending the Municipal Code for accessory dwelling units.

It is one of the many attempts by the MOA to help fix Anchorage’s affordable housing crisis by adding new housing units as the number of new housing has remained at historic lows for the past few years, with 2017 being no exception.

INSIDE REAL ESTATE: Single-family starts down in Anchorage

Anchorage single-family building permits still lag behind last year’s with a total of only 95 new homes permitted through June 2017 compared to 106 in 2016.

However, the good news is a total of 300 new housing units have been permitted compared to 208 in 2016 thanks to a big boost in multi-family development earlier this year.

Overall, however, total new construction activity at $282.6 million is down $10 million, which is only a 5 percent drop from 2016, a surprisingly low dip. Commercial construction continues to outpace residential by almost 30 percent.

INSIDE REAL ESTATE: What does $700K buy in Anchorage?

Anchorage has had 16 homes sell so far this year with an original list price between $700,000 and $850,000. There are also six pending sales and currently nine homes for sale in this price range.

One Downtown home that sold was built in 1939 and a bluff home sold that was built in 1975. However, half of the pending and sold homes have been built since 2000. The more recently built homes vary in price per square foot between $185 and $337, depending on location and style with ranches being the most expensive and homes with basements the least expensive per square foot.

INSIDE REAL ESTATE: A new option for homebuyers

The Alaska Housing Financing Corp. has a little-known new grant program for single-family homebuyers called the “Closing Cost Assistance Program.” Available only through First National Bank Alaska and Mt. McKinley Bank in Fairbanks, it offers up to a 4 percent grant (yes, grant, not loan) to homebuyers with a credit score of 660 and above.

INSIDE REAL ESTATE: Alaska rental vacancies hit five-year high

According to the annual Alaska Rental Market Survey, vacancy rates crept up in 2017 to 5.08 percent in Anchorage, which is almost identical to the national average.

Fairbanks, Kenai Peninsula Borough and Wrangell-Petersburg all have vacancy rates double Anchorage’s and have for the past several years. Valdez-Cordova and the Juneau Borough have the lowest vacancy rates with 4.55 percent and 5.68 percent respectively.

INSIDE REAL ESTATE: Breaking down myths about what homebuyers want

If homebuilders are wondering what type of housing they should build in 2017 and beyond, all they have to do is read the recently published book by the National Association of Home Builders. The 124 pages with 156 pages of addendums is a blueprint of home buyers’ wants and needs in all age groups and income categories.

So let’s get started with breaking some myths. Despite planners’ and developers’ love of higher density, single-family homes remain the preferred choice for buyers of all incomes. Nearly 70 percent of moderate-income buyers like suburban communities.

INSIDE REAL ESTATE: Rents, prices, foreclosures still stable

The Department of Labor and Work Force Development has confirmed in their May report what real estate professionals have been saying all along: “a reduced supply of housing has created stability in both the for sale and for rent housing market.”

Statewide, only 2,120 new residential units were built in Alaska 2016 — one of the four lowest permit years since 1993. The report called out new housing construction as “tepid at best” in 2016 and said it represented a 12.5 percent decline from the year before.

INSIDE REAL ESTATE: Remarkable stability in Anchorage housing market

The first four months of this year have demonstrated a remarkable stability in the Anchorage housing market due to a continued lack of single-family inventory.

The Multiple Listing Service tracks listing and sales data from thirteen geographical areas from Turnagain Arm to Peters Creek and each one has had a decline of single family homes for sale.

INSIDE REAL ESTATE: A step toward affordability in Anchorage

Working its way through the public process is a new land use concept that if passed by the Anchorage Assembly would allow for fee simple ownership of attached or detached homes on multi-family zoned land.

Already vetted and passed by the Planning and Zoning Commission and the Platting Board, Assembly approval is the final step in what should help to bypass the cumbersome financing requirements for condos.

INSIDE REAL ESTATE: Anchorage commercial permits up in 1Q

The Municipality of Anchorage has reported that the total value for all categories of building permits in the first quarter of 2017 has increased by $15.26 million when compared to the first quarter of 2016.

This increase is directly related to commercial permits rather than residential permits, which remain at historic low levels.

INSIDE REAL ESTATE: Taking the mystery out of price per square foot

A couple of years ago, the Alaska Multiple Listing Service inserted a field in its standard listing form identifying the price per square foot for every residential listing both new and pre-owned.

As a result, virtually all buyers begin their search by asking “What is the square footage price of the home?” Unfortunately, price per square foot is not a very accurate way to evaluate a potential home purchase.

And it is particularly problematic when it comes to evaluating a potential new home to be built.

INSIDE REAL ESTATE: Tug-of-war between builders and subs produces price pressure

Alaska requires homebuilders to have a general contractor’s license plus a residential endorsement. They are also required to be licensed, bonded and insured.

However, a new homebuyer isn’t likely to find one of them wearing a carpenter’s belt and working on the job site. According a study by the National Association of Home Builders, it takes 22 subcontractors to build the average home.

INSIDE REAL ESTATE: Time may have come for more mixed-use in Anchorage

In Anchorage, we’re hearing more and more about the opportunities for mixed-use developments but what exactly does it mean for consumers and taxpayers?

INSIDE REAL ESTATE: Evaluating Anchorage property tax assessments

Every year on Jan. 15, the Municipality of Anchorage is required to mail assessment notices to property owners for all taxable property.

That date begins a 30-day appeal period. Feb. 29 is the last day to submit evidence for appeals and during mid-March to June, the Board of Equalization, consisting of private citizens, hears the appeals. Very few property owners actually file a formal appeal and most minor appeals are handled at the counter, which is efficient and friendly, given all the circumstances.

INSIDE REAL ESTATE: Past is not always the future in home sales

A fourth quarter surge in activity brought 2016 within field goal range of 2015 home sales.

Year-end sales for Anchorage came in just shy of 3,000, down only 58 sales from 2015. The late fall mortgage rate jump up to 4.325 percent for a 30-year fixed loan jolted both buyers and sellers into making buying and selling decisions even though the rate increase had been long expected.

The year ended down only 2 percent in sales volume and, according to MLS, sale prices on average held at $366,000 for a single family home.

INSIDE REAL ESTATE: Adding up the costs vs. the value of a home remodel

According to the cost vs. value report published by Hanley Wood LLC, in 2014, mid-range remodeling projects vary greatly when comparing actual job cost to resale value.

One project where owners can expect a 100 percent return, particularly in Alaska’s cold climate, is the addition of a garage. That job cost is estimated at $55,120 and has a resale value of $57,500 that, interestingly enough, is significantly more than an appraisal gives for a garage.

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