INSIDE REAL ESTATE: Lack of inventory has kept Anchorage housing prices stable
Despite the past five years of Alaska’s negative migration, the Anchorage residential market has remained relatively unscathed but whether or not that resiliency will continue into 2018 is the question that is on everyone’s mind.
According to an Alaska Trends March 2018 article, Alaska has the highest population turnover of any state, including both inbound and outbound, with typically 40,000 to 50,000 moving in each direction.
That transiency is good for the local real estate market. However, the negative migration trend in the last five years can’t help but make anyone who loves numbers wonder if the time has now come for a decline in values for Anchorage homes.
So far this year, according to MLS statistics published for the first quarter, Anchorage has experienced little or no impact from more people leaving the state than those incoming. There were 472 single family sales reported for the first quarter, down 9 percent.
However, active inventory has increased by 8 percent while at the same time days on the market has declined by 29 percent. The sharp decline in days on the market signifies a home that has been well-maintained and most likely remodeled within the past 10 years will continue to sell well and in many instances have multiple offers.
What is interesting in the marketplace, however, is the drop in the original list to final sale price which is hovering around a 6 percent decline, not counting any seller paid closing costs. The average sales price of a single family home is now $361,373, down only 1 percent from last year and approximately the same price as in 2014.
The condo market is down approximately 3 percent in average sales price which is now $206,667, almost identical to the 2014 average price. Inventory is up in the condo market by 5 percent but like the single family market, a well-priced condo in good condition is going to sell 34 percent faster than just a year ago.
The average price of an acre lot sold in 2017 was $183,000. Smart, affluent buyers are buying $1 million homes at a consistent rate of 1.3 per month with 17 sales reported last year. Lenders mortgage recordings are down $7 million for the first two months of the year compared to last year.
So what do all these stats tell us about the market? Our negative migration has so far had little impact on our local housing market due in part to a lack of new inventory with less than 200 single family homes built per year for the past three years.
That lack of inventory, although frustrating to buyers, has kept prices relatively stable. However, whether or not that stability will continue, with pressure from rising interest rates, is hard to predict. The Anchorage housing market is on a tipping point. Which way it tips is beyond most buyers’ and sellers’ control. After all, when it comes to real estate, we live in the market, but we don’t control it.