Connie Yoshimura

Interest rate jump wakes up Anchorage homebuyers

This month’s mortgage interest rate jump up to 4.125 percent has sent buyers scampering to find a new home.

The week before Thanksgiving, 45 homes pended in Anchorage compared to 27 in 2015. That trend continued into Thanksgiving week when six additional sales were reported compared to 2015.

These sales occurred in all price ranges but particularly noteworthy were five new sales between $650,000 to $750,000.

Homeowners’ associations can add value to community

Homeowners’ associations, or HOA, are a necessity in today’s world of residential development.

Whether it’s a condominium or single family development, any new community that has a common area, including signage easements, greenbelts, perimeter fencing, is subject to the uniform Common Interest Ownership Act requiring a public offering statement be given to each and every buyer.

And every common ownership community must have an association that consists of a board of directors which oversees the enforcement of the covenants, codes and restrictions for the community.

Latest data shows continuing decline in new construction

The Municipality of Anchorage recently released its building permit summary through September 2016.

As expected, it showed a continual slide in the construction of new housing units whether multi-family, duplex or single family.

At the same time, according to the report, cost per unit has increased, an indication that new housing units are feeling the impact of the implementation of the new Title 21 regulations.

What is also interesting is the increase in both residential and commercial alterations.

Buyers are hesitant and inventory is up

The 2016 Anchorage residential market could best be described as having had a minor fender bender, not the fatal crash so many naysayers predicted for the housing market.

Thousands of owners have not turned in their keys to the bank like they did in the 1980s. In fact, Alaska continues to rank in the bottom three states for foreclosures. Values have remained constant with minor pockets of decline due to aging housing stock and in some geographical areas.

Why 'new' costs so much

Robert Dietz, the National Association of Home Builders’ chief economist, in a speech to Anchorage’s real estate industry this month, predicted a mortgage rate hike to 4.1 percent in 2017 and 4.9 percent by 2018 compared to our current rate of 3.5 percent for conventional financing.

Dietz’s presentation also addressed the constraints on building growth as witnessed in Anchorage that continues to face historic lows for single family permits. He called them the “three L’s.”

Are home inspectors overreaching their regulatory authority?

Selling a home is a four step negotiating process. Step one is deciding the asking price in consultation with your realtor.

Step two is negotiating the price and terms of any offer that you receive. Step three is negotiating the recommended list of repair items from a home inspection report.

Step four is any change in the final sales price as a result of the appraisal coming in less than the agreed upon sales price.

Residential building permits continue lagging in Anchorage

Despite all the organizations, committees and public discourse dedicated to Anchorage’s need for more and affordable housing, the Municipality of Anchorage continues to have historically low residential building permits.

For the first half of 2016, Anchorage had only 106 single family permits, a 40 percent decline from 2015 and the lowest permit numbers in more than six years. Duplexes fared little better with 30 units (a 30 percent decline) and multi-family had the lowest number of units permitted in the last five years with 54 permits, compared to 220 year-to-date in 2015.

Ranch homes emerging as favored choice in Anchorage

MLS recently reported that 65 ranch homes in Anchorage have sold since the first of the year and 20 are now pending. There are 45 active ranch listings with an average asking price of $363,112. Their average price per square foot is $236 and their time on the market is 55 days, slightly less than all MLS combined inventory.

INSIDE REAL ESTATE: When buying or renting, how much is ‘pretty’ worth to you?

Buyers zip through online websites looking for the home of their dreams. They discard homes based on the exterior photo and move on to a dozen or sometimes a hundred different properties. At open houses, probably 50 percent of those who thought they were interested in the home, simply drive right by it, rejecting the outside appearance of the home.

So, yes, pretty does matter whether it’s for a single family home and for a small investor looking to make his first duplex or four-plex investment.

INSIDE REAL ESTATE: Redevelopment may not solve affordability problem

Mark Twain said, “Buy land because they don’t make any more.” I always believed that but recent changes in housing may make that statement no longer as true as it once was.

INSIDE REAL ESTATE: Anchorage home market shifts from sellers to buyers

According to the Multiple Listing Service, residential active listing inventory in the Municipality of Anchorage bumped up to over 900 units for sale in April and May, similar to the available inventory in 2010, turning the Anchorage market into more of a buyer’s market than a seller’s.

Just a year ago, inventory was in the 600 for sale range for the same months. At that time, frustrated buyers dealt with competitive multiple offers on homes with some offering more than listed price.

INSIDE REAL ESTATE: Test your knowledge of the Southcentral real estate market

1. Has the average sales price of Anchorage homes increased or decreased year-to-date when compared to the 2015 average price?

2. By what percentage has this increase or decrease occurred?

3. Has the number of residential sales for the first four months of 2016 increased or decreased when compared to the same time last year?

4. How many home sales have occurred in the first four months of 2016 as reported in MLS?

5. In the last six months, how many million-dollar homes listed in MLS have sold?

INSIDE REAL ESTATE: As you may have guessed, Anchorage home listings on rise

As you might have suspected, Anchorage inventory has continued to increase over the past few weeks.

Spring and early summer is the time of year when sellers like to put their homes on the market and our uncertain economic outlook has no doubt helped increase Anchorage’s inventory.

A snapshot of a week’s inventory of available homes in May when compared to the same time in 2015, shows a 64 percent increase in active for sale single family homes. On May 2, 2015, there were 428 homes for sale; on May 2, 2016, there were 702.

INSIDE REAL ESTATE: Anchorage’s housing shortage continues

Anchorage, Alaska’s largest metropolitan area, continues to face a housing shortage due to the lack of new construction activity that has been exacerbated by the implementation of the new Title 21 land use regulations.

As the chart demonstrates, new single family permits have been at a steady decline since 2013 and the decline from 2015 to 2016 is a whopping 50 percent. For the first quarter of 2016, Anchorage had only 26 single family permits, a historic low. Only 14 duplex units were permitted compared to 26 just a year ago.

House or condominium, know your rules for landscaping

This is the time of year when everyone’s thoughts turn to landscaping and outdoor maintenance.

Whether it’s buying that Bell’s hanging basket for your deck or installing a brand new yard, each homeowner and condo association is unique in their rules and requirements when it comes to landscaping.

Prospective homebuyers should carefully review the public offering statement or resale certificate prior to their purchase so they are aware of what the homeowners association, or HOA, expects of them regarding the installation and maintenance of landscaping.

INSIDE REAL ESTATE: Friendlier building permit regime gives Mat-Su an edge over Anchorage

According to the latest census data for 2015, Anchorage has lost 1,458 residents when compared to 2014 while her popular neighbor to the north, the Mat-Su Borough gained 1,801.

How many of Anchorage’s lost neighbors became residents of the Mat-Su is hard to calculate, but anyone who’s driven the Glenn Highway in the past 12 months can attest to the growing long line of traffic back and forth.

INSIDE REAL ESTATE: Anchorage condo market holds steady so far in 2016

Condo sales in the Municipality of Anchorage have remained consistent year-to-date when compared to the same time as last year, and prices are stable with only 0.82 percent increase from 2015.

This bodes well for the first-time homebuyer and downsizers who are looking to scale back their square footage and utility expenses. It is also indicative of the continued interest and activity in the lower price ranges of the Anchorage market.

Why 2016 is not 1986 for the Anchorage real estate market

There’s been lots of talk from a wide variety of experts about the demise of the housing market in 2016 and comparing it to the real estate crash of 1986. But, there’s one important difference that everyone seems to have forgotten.

In 1986 mortgage interest rates were 10.19 percent for a 30-year fixed rate loan. Today, that rate is 3.75 percent for the same loan. When comparing the rate on a $500,000 mortgage, the math is shocking.

INSIDE REAL ESTATE: How to get what you want when building a new home

All across the nation (and Alaska being no exception), buyers are demanding extras, upgrades, and changes to stock housing plans that have been the mainstay of builders profitability for the past 20 years.

INSIDE REAL ESTATE: Anchorage’s mixed-use rules reflect mixed-up priorities

During the 10 years of negotiation and conflict over the new Title 21 land use regulations which finally became ordinance in January 2016, the Municipality of Anchorage planning department held firm on their vision of encouraging mixed-use development by creating new zoning categories as one avenue to solving Anchorage’s housing shortage.

However, what works on paper and theory isn’t necessarily financially feasible in reality. In other words, mixed-use in Anchorage has yet to be “ground tested” on new, non-subsidized, vertically-integrated projects.

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