Connie Yoshimura

INSIDE REAL ESTATE: Anchorage, Kodiak only areas to see vacancies up, rents down

Anchorage and Kodiak were the only two areas where vacancies rose in 2018 and rents dropped, according to the latest survey by Alaska Economic Trends in conjunction with the Alaska Housing Finance Corp. Anchorage’s vacancy factor rose to 6.2 percent, up slightly more than 1 percent due to negative migration. Meanwhile, the Matanuska-Susitna Borough had a net migration of 1,233. Its vacancy factor was down to 7.3 percent from 7.6 percent in 2017. However, it was still higher than Anchorage’s. Single-family homes in Anchorage have an average monthly rental rate of $2,149. Higher rental income can be obtained for four-bedroom homes that have a double- or triple-car garage. Renters with pets can expect to pay an additional $100 to $150 per month plus a pet deposit according to leasing agents. Smokers also pay a premium. The most popular rental areas and the most expensive in Anchorage are in the Bootlegger’s Cove area and southeast Anchorage. Rental rates tend to be lower in East Anchorage, which has an abundance of zero lot lines and older two-bedroom, multi-family units. Newer properties have a premium and so do units with an interior washer/dryer. In the Fairbanks North Star Borough, a three-bedroom single family home rents for $100 more than in Anchorage while the lowest rental rate is in the Wrangell-Petersburg borough where single-family homes rent only for $1,034. The rental rates above include all utility costs, according to the survey. However, more desirable rentals in age and location often charge the renter for at least gas and electric, assuming separate meters are available. In particular, single-family homes and luxury duplexes often have tenants paying basic utilities while providing water and sewer. In Anchorage and the Mat-Su, more than 90 percent of all rentals use natural gas for heat and hot water. However, in almost all areas of the state, cooking is powered by electricity, as are washer/dryer hook-ups. The small increase in vacancy factors and modest decline in rental income is reflective of the stability in the housing market which continues to adjust to historic lows for new construction permits, whether for sale or rent. As of August 2018, Anchorage had only 10 applications for multi-family permits, totaling 129 units, compared to 21 applications in 2017 for 153 units, which demonstrates that multi-family projects are increasing in size and scope of the number of units per projects. Duplexes, considered by some the new affordable single-family home when each side is sold, has had a decrease in number of units built so far in Anchorage. The latest Municipality of Anchorage published statistics for August show a decline in year-to-date permits from 58 compared to 76 in in 2017. The MOA does not differentiate between rentals and for sale units for multi-family and duplex permits. ^ Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Time is now to build a rental portfolio

Lack of new housing starts, particularly in duplex and multi-family, make it a good time for the small investor to enter the market. Multi-family permits are down 50 percent from last year with only 72 units permitted compared to 153 last year at this same time. Duplex permits are also down with over 42 units permitted compared to 64 in 2017. Small investors shouldn’t be concerned about a reported 5 percent Multiple Listing Service vacancy factor if they take precautions when making a purchase. Condos are always a good investment because they require little management for a first time investor. Let the home owners’ association do most of your work. Your job is to simply find a well-qualified tenant by having them complete an application that requires a Social Security number for a credit check and current employment. One other piece of advise for a new investor is to make sure you have the right for a periodic inspection of the property. Because the majority of Anchorage’s aging rental properties are two-bedrooms with one bath and no covered car storage, consider purchasing a three-bedroom condo with at least a single-car garage. Newer is better than old. Even a condo built in the 1990s is now 28 years old so look for units built since 2000. Single-family homes are always a good investment and rent quickly due to lack of inventory. Since many older single-family homes are only three bedrooms, look for a four-bedroom home with a double-car garage. Some smart first time homebuyers make their first purchase a duplex. They live in one side and rent out the other. Then, after a couple of years, they move up to a single family home and rent out both sides. Both purchases can be used with low down, owner-occupied financing whereas nonowner-occupied financing usually requires a down payment of 20 percent to 25 percent. That’s an excellent way to begin a real estate portfolio. Alaska has surprisingly high mortgage limits for duplex, triplex and fourplex financing. Duplex financing amounts vary from Federal Housing Administration limits of $507,900 to $870,225 for Veterans Affairs, Fannie Mae and Alaska Housing Finance Corp. owner-occupied loans. Fourplex mortgages can go as high as $1.3 million for VA, FNMA and AHFC. FHA limits are $763,000. Nonowner-occupied loans can require reserves of up to six months of principal, interest, taxes and insurance. Some mortgage investors also require professional property management if the purchaser does not have prior management experience. Up to 75 percent of rents from the purchased property can be used to qualify for the mortgage. You never know when the bottom of the market is until it has passed. My bet is the bottom is happening now so now is a good time for the small investor to make a move. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Report shows $40M drop in permits

The Municipality of Anchorage’s six-month building activity report was published last week and it’s not good news for the construction industry. Overall permits are down by $40 million. This year’s total to date is $241 million compared to $282 million in 2017. That number is inclusive of residential, multi-family, commercial and alterations. It includes both government and private party permit valuations. Despite all the talk about Anchorage’s need for more housing, the number of new dwelling units continues to decline. Ninety-three single family units were started compared to 95 in 2017. Duplexes units took almost a 50 percent decline. Only 26 units have been permitted thru June compared to 52 in 2017. The sharpest decline came in multi-family where no new units were permitted compared to 153 last year. That’s a telling number as the city continues to face a shortage of affordable homes. For purposes of permits, multi-family is classified as any building with three or more units. The MOA does not differentiate between for sale or for rent units for either duplexes or multi family. But from a market perspective, duplex and multi-family units are where most first time home buyers frequently begin their search. At this rate, it is doubtful that the MOA is even replacing units lost to fire, demolition or condemnation. The average permit value for a single family home is now $407,371. That number does not include any land cost. Add another $140,000 for a lot and buyers in today’s market will be lucky to find a brand new home for less than $540,000 in 2018. Anchorage’s most popular subdivision, Resolution Pointe subdivision, has had nine new single family starts this year and its lot inventory is now sold out. Resolution Bluffs, which opened this summer with luxury homesites bordering both Cook Inlet and Campbell Creek Estuary, has a dozen home sites from $239,000. WestGate, a popular duplex condo community, bordering the proposed Lucy Park, had the most duplex starts with eight units. In east Anchorage, Checkpoint had four starts and Eagle Crossing had two. (Disclosure: Dwell Realty has listings in Resolution Bluffs and WestGate) Anchorage’s most prolific builders continue to be Spinell Homes and Hultquist Homes, along with Troy Davis, a popular builder in Eagle River and who also builds in the Valley. Lack of buildable land continues to plague homebuilders. In Anchorage, the only new subdivision with public, water and sewer coming online this year is Heather Wood, at the corner of Dimond Boulevard and West Park Drive. Its first phase will be 23 lots with lot widths varying from 70 to 80 feet. In southeast Anchorage, the last phase of the Terraces is rumored to be developed but no announcement has been made. Some new lots with public services are being developed in Eagle River near the north Eagle River exchange and a small six lot community with well and septic at the North Birchwood Loop turnoff is now available. Various vacant parcels on the hillside are being offered for sale by private parties and the MOA but none are expected to be developed this year. Lack of land and new homes has kept the Anchorage housing market stable, despite Alaska’s three-year recession. The average sales price, according to Multiple Listing Service, has varied only by a couple thousand dollars over the past three years, hovering around $366,000. That’s a far cry from a projected $540,000 for a new single family home. And with no hope of closing that gap. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: It’s property tax time for Anchorage

The second half of Anchorage’s 2018 property taxes are due Aug. 1. If you’re a residential property owner with a mortgage, this date probably goes by without notice as your taxes are collected on a monthly basis along with your principal, interest and insurance payments. However, if you own land, commercial or personal property, you’re about ready to write a check to continue having the benefit of owning property in the Municipality of Anchorage or be eventually foreclosed upon. The MOA’s property tax base composition consists of 65 percent residential, 27 percent commercial and 8 percent personal property. However, there are some significant exemptions you should be aware of. The most popular ones are for senior citizens and disabled veterans. State reimbursement for these exemptions ended in 1996 but have continued without reimbursement in the MOA. Total exemptions in 2017 included the municipality (20 percent) residential (10 percent), state (8 percent), federal (9 percent), education MOA (7 percent), charitable (5 percent), religion (4 percent), disabled veteran (4 percent) education state (3 percent), native claim (2 percent) and hospital (4 percent). All total these exemptions add up to 24 percent of the full value determination of $40.24 billion. The April 3 regular municipal election raised the residential exemption from 10 percent up to $20,000, to 20 percent up to $50,000. Most everyone has their favorite charity or cause they would like to have exempted but every exemption increases the burden on the majority of property owners who are homeowners. The greatest benefit to the change was for homeowners with a tax assessed valuation under $500,000. However, regardless of how low the tax assessed valuation was on a commercial property, the tax burden was simply shifted to all commercial owners. Commercial property is described as anything over a triplex. This is particularly troublesome for renters as multi-family investors and commercial owners will simply pass on the increases to renters and small business owner who lease space in office buildings or retail space. Last year’s residential assessment included 86,681 properties with a valuation of $25.47 billion. There were 10,671 commercial properties for a value of $10.63 billion. Personal property was $2.95 billion. All taxable properties had -0.8 percent percent change in valuation. Residential properties had the biggest average change with a decline of 1.3 percent for single family; 2 percent decline for duplex/triplex; a 0.9 percent for condos while vacant land had an increase of 2.7 percent. Alaska is a non-disclosure state for sales and so it’s interesting to learn how the municipal assessor determines value by looking online for listings, picking up flyers or maybe even cold calling? One perennial question that is always asked by home sellers is “How does my tax assessed value compare to the ‘real’ price I’m going to get when I sell?” The MOA even has a chart for that. When comparing average assessed value to MLS average sales price, the MOA claims that their assessed values are 96 percent of the Multiple Listing Service’s average sales price. Last year, that was an average assessed value of $351,264 compared to the average sales price of $365,472 but keep in mind that assessed value is only a guesstimate due to Alaska’s non-disclosure status. ^ Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Take extra step at closing to protect privacy

Even though the state of Alaska is a non-disclosure state when it comes to the final sales price on a property, the statewide Multiple Listing Service purchase and sale agreement contains the following clause pertaining to disclosure. 23) Authorization to Release Information to Brokers: Buyer and Seller authorize any Lender, escrow agent, closing agent, appraiser, home inspector, surveyor and any other related party to this sale to furnish and provide any and all information and copies of documents related to this sale to both the Listing and Selling Brokers and their Licensees. Taken at its most literal interpretation, this clause allows escrow closing agents to circulate a Housing and Urban Development settlement statement which discloses not only the sales price but also the seller’s net proceeds to the buyer’s licensee. With today’s instant communication, that financial information invariably gets passed on to the buyer via email or DocuSign. However, no buyer should have the right to know what a seller’s take home check is on a sale. That potential disclosure is an invasion of a seller’s financial privacy. Behind that seller’s net proceeds is his or her initial down payment, years of monthly mortgage payments, costly repairs and maintenance and perhaps even a refinance to pay for a child’s education or a spouse’s medical expenses. For a builder’s settlement statement, it is equally egregious but for different reasons. I frequently ask realtors how much they think a builder makes on a home and invariably they say 20 percent. I suspect they get that number from seeing the builder’s net proceeds at closing which is frequently about 20 percent of the purchase price. But what that net proceeds amount doesn’t represent is the cash equity and fees required to obtain the construction loan and, in many instances, purchase the lot. A builder generally receives 75 percent of the construction appraisal that frequently doesn’t represent the buyer’s purchase price. The buyer and selling licensee don’t also see the monthly interest paid on the loan, appraisal fees, inspection fees, permit fees, the overhead for general and administrative expenses including gasoline and vehicular repairs, trade labor and accounting expenses, to identify just a handful of expenses. A buyer may see a settlement statement for a builder’s $500,000 home and think he or she is making $200,000 and then wonder why he had to pay for all these upgrades! In reality, a buyer’s net profit may be more like 6 percent, or $30,000. But, unfortunately, that $200,000 is going to stick in that buyer and realtor’s mind for a very long time, which contributes to the myth of why new homes cost so much and makes negotiating for the next new home purchase more difficult than it actually should be. The solution is simple. If listing licensees do not want a buyer to see a seller’s net proceeds, they should simply cross out the No. 23 clause. It’s a few more keystrokes and separate settlement statements on the part of the escrow closing agents but it’s a good way to protect a seller’s financial privacy. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Anchorage construction activity down sharply

The Municipality of Anchorage building safety report, which compiles all new construction activity requiring a building permit, was recently released for the first four months of 2018 and it is not good news for the construction industry. All construction activity is down 19.7 percent when compared to the same time span in 2017. The report categorizes all residential types as well as commercial activity, including alterations (remodeling) and change orders. The permits value the cost for vertical construction only according to a formula internal to the department and does not necessarily reflect market value. It also does not include any valuation for the land. Its purpose is to provide fee income to development services and to assure the public of its health and safety in both commercial and residential construction. Most of the 19.77 percent decline has come from the commercial sector. Residential construction permits have actually stabilized with even a slight increase in activity. Unfortunately, this new bottom of “normal” still doesn’t help Anchorage’s housing crisis. Eight new single-family starts in 2018 have increased the number to 54 from 2017. Duplex permits are down 50 percent and 67 new multi-family permits were obtained year-to-date, an identical number to 2017. A multi-family permit is categorized as any building with three or more units. Spinell and Hultquist Homes remain the largest builders in Anchorage, clearly outpacing all other builders with 14 permits for Spinell and 13 for Hultquist Homes. Combined they make up 50 percent of all residential activity for single family and duplexes. Spinell also builds in the Matanuska-Susitna Valley and Eagle River while Hultquist Homes has a division in the Seattle area. In single family, the owner/builder outpaces both of Anchorage’s leading builders with 12 permits. An owner/builder is usually someone from the trades who does not have a residential endorsement. An owner builder may also be someone who hires a general contractor to build their home but obtains the financing and permit in order to keep more control of the project. The permits also track elevator applications which are down from 82 to 43, almost a 50 percent drop. No mobile home permits have been issued so far this year, which clearly indicates a lack of consumer confidence in the long term financial sustainability of trailer parks which are, ultimately, an interim land holding use. Structural, electrical and mechanical/plumbing permits have all increased substantially. Given the overall decline in permit valuations, perhaps that is an indication that now is a good time for owners to consider remodeling as general contractors try to keep their employees engaged and prices reasonable while waiting out the third year of Alaska’s real estate recession. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Landlords’ housing for homeless a positive in spendy market

Congratulations are in order to Cook Inlet Housing Authority and Weidner Apartments for their joint effort to provide housing and support for some of Anchorage’s homeless. It’s a small but important step forward between public and private partnership that perhaps other landlords in Anchorage will take to heart. It’s similar in intent to the Section 8 housing voucher system that allows qualified renters to integrate into market housing through a federal subsidy program managed by the Alaska Housing Finance Corp. The integration of lower income and homeless into market housing allows for many social benefits and creates an opportunity for upward social mobility not available in “projects.” This new program also recognizes the need for other than monetary assistance when it comes to socially integrating mixed income tenants, including job training and internship opportunities. It’s a significant partnership and should be applauded for its commitment to the community to help take some homeless out of camps and off street corners. Fair market rent, or FMR, as determined by Housing and Urban Development in 2018, ranks Anchorage as 98 percent more expensive than other U.S. cities, which is a contributing factor to Anchorage’s homeless, many of whom have some limited income but not enough to have a permanent residence. FMR for a two-bedroom apartment, according to HUD, is currently $1,337 per month in Anchorage. Efficiencies and studio apartments are $944. One-bedrooms have an average rent of $1,081 and the three-bedroom rate is $2,000. Most of Anchorage’s rental housing stock was built between 1980 and 1984 when more than 18,168 total units were built. Compare that to the years 2015-17 when only 888 units were constructed. Today’s landlords continue to struggle with aging properties requiring significant structural and mechanical repairs and more maintenance while at the same time, both landlords and tenants face increasing costs for gas and electricity as well as recently increased taxes on rental properties. Although there is no data for 2018 available from the Department of Labor or Alaska Housing Finance Corp., other online data sources show that Anchorage has slowly seen a rising vacancy factor due to Alaska’s three-year recession. Vacancy rates have slowly crept up from 2.6 percent in 2012 to 5 percent 2017, although nationally a healthy vacancy rate is considered 5 percent. However, just to keep vacancy rates in perspective, during the real estate recession of 1988, Anchorage vacancy rates were over 25 percent. During the recession of 2006-08, vacancy rates hovered around 8 percent. Lack of newly built multi-family units over the past 10 years has kept Anchorage’s vacancies low or average with the nation. Anecdotally, 2018 has brought some minor rent concessions such as one month’s free rent or a longer time on the market, particularly with older properties that may have not been kept up by the small investor. Anchorage needs more housing of all types. Most apartments built over the past 30 years have been two-bedrooms. Our changing demographics points to a need for new efficiency and three-bedroom units. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Do your homework before buying lot

Alaskans love their land. And we have lots of land as the largest physical state in the nation with more than 663,300 square miles, but the amount of fully private land is less than 1 percent because 99 percent of Alaska’s land is owned by the government or Native corporations. So when it comes time for a homebuyer, after living on a 6,000 square foot lot in an Anchorage subdivision, to look for a little more land to build their dream home on, there’s not much to choose from. Currently, in the statewide Alaska Multiple Listing Service, or MLS, there are 2,093 active lots for sale ranging in size from 1 to 10 acres. The Mat-Su Borough has 585 listings; Kenai has 853. In the Anchorage bowl, there are only 225, ranging in asking price from $30,000 to $6.1 million which includes all zoning districts. The 2017 average R6 lot sold for $183,000. But, when it comes to buying a lot without a publicly built road with public water and sewer, it is buyer beware. So here are some things you need to know before buying a piece of dirt. Not every lot is going to percolate sufficiently for a septic system. Check the surrounding lots to see if they have holding tanks, or the more expensive Avantec system. There is also significant difference in cost and installation for a four bedroom septic versus a three bedroom. Water is still the source of all life. The depth and flow volume of the well will add to the cost of your lot. Check your neighbors well depth at the Municipality of Anchorage or the State Department of Natural Resources, which is a good, but not guaranteed, indication of what you will have to spend to develop your water source. The minimum standard for a four bedroom house is 0.42 gallons per minute or 600 gallons per day. However, underground water sources shift and wells do run dry so there is no guarantee you will have a continual water source. Then you have to verify the quality of your well water to make sure it’s OK to drink. There are mineral areas that cause contamination, that can be filtered, but again another cost. The lot, if it is not accessible by a public road, may be part of a LRSD, a limited road service district. Find out how much it costs to maintain the road and who is in charge of the LRSD. That is not always a static cost, depending on the winter snow fall and annual maintenance. The topography of the lot is going to determine its initial development cost. Extra excavation and haul off adds cost but do not add value to a lot. Haul off costs are calculated by the round trip miles to and from the dump site so needless to say the location of the lot and dumpsite may significantly impact your cost. Poor, especially wet soils conditions will require often large excavation out and gravel haul in for a stable building pad. Most sellers will allow one or two test holes as part of due diligence as long as there is not unnecessary damage to the topography. You can also look at test holes required to build the access road if it has been recently constructed and approved by the MOA. There may be easements or restrictions to the lot that are not visible to the human eye so please order a property profile which is a nominal cost from any title company. A full title report is ordered prior to the closing and may reveal any additional information. Although a title report is not required to purchase a lot most real estate professionals will not participate in a sale without a title report. Some restrictions or easements that commonly pop up are gas and electric or even public access. There may also be setback requirements that may be more restrictive than the ones required by the MOA. MOA driveway standards may not exceed 10 percent, which may mean, on steep lots, one or two switchbacks that add to the cost of the driveway. Some lots may have buried fuel tanks, basement foundations or have been used for storage and repair of old vehicles. In that case, a Phase I environmental assessment should be done. Finally, after you have gathered all of the information, I strongly suggest you hire a builder or an engineer to review your findings and walk the lot with you. This spring, wearing a pair of snowshoes or muck boots is also probably a good idea. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Time to buy with interest rates set to keep rising

One year ago this month the Veterans’ Affairs 30-year fixed mortgage rate was 3.75. Today, that rate is 4.5 percent. Similar increases have occurred with all mortgage programs. A 15-year fixed conventional rate was 3.5 percent and today’s rate is 4.125. The popular Federal Housing Administration 30-year fixed rate has jumped from 3.75 percent to 4.5 percent. With less than 10 percent down, FHA loans now also require mortgage insurance for the entire 30-year life of the loan whereas previously it was cancelled after five years and 78 percent loan-to-value. Interestingly enough, conventional rates have not jumped up as high. One year ago, 30-year fixed conventional was 4.125 percent and today it is 4.5 percent. Without question, these interest rate jump ups hit the entry level and one step move-up market the hardest. I’ve never worried about the conventional mortgage rate as higher end buyers frequently have financial resources that allow them to buy down rates and avoid mortgage insurance by putting 20 percent down. On a $400,000 mortgage, avoiding mortgage insurance can save you $9,000-plus over 10 years. These rate increases will definitely make it more difficult for first time homebuyers to enter the housing market. However, they better jump now rather than later in the year as more rate increases are inevitable with anticipated rates reaching 5 percent or higher by the end of the year. I recognize that our historically low rates couldn’t, and shouldn’t, last forever but I also believe that homeownership, which begins at the affordable level, is the backbone of any socially vibrant community. So my recommendation is buy now and lock your loan. There is more inventory in the market to select from. Anchorage has the highest number of single family homes listed in MLS than any time in the past five years. And the first 2018 reports from MLS show a 5.89 percent drop in average sales price, the biggest drop reported since the real estate recession of 2008. But buyers should not be wary of Alaska’s mild recession. As Neal Freid from the Department of Labor has pointed out, recessions don’t last more than two to three years and ours is in its third year. It takes will power to buck the trend but with more inventory, lower prices and the continued real threat of increased interest rates, now is a good time to buy a home because the cost of home ownership is not the purchase price but rather your mortgage interest rate over the life of the loan. There are some good buying opportunities out there, including entry level condominiums which have remained stable in value at $212,000 the past couple of years. Just make sure there are adequate reserves for maintenance and repair and no looming special assessments. Any home priced under $500,000 is also a good buy if it has been well-maintained and had some cosmetic renovation. New home construction can’t begin to replace a $500,000 home for less than an additional $75,000 due to increased costs for labor and materials in 2018. Also, look for any new construction standing inventory in any price point. Builders want to get rid of any leftover 2017 inventory so they can get ready for spring digs. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: The good, and not-so-good of 2017 in Anchorage building

The good news from the Municipality of Anchorage building safety activity report for 2017 is the total number of housing units increased from 341 in 2016 to 460. The not-so-good news for potential homebuyers is that the increase comes from multi-family and duplex permits. Single-family permits had an increase of only six units. Clearly, Anchorage is trending towards more urban and higher density housing while the marketplace is still seeking the affordable single family home. Hultquist Homes tops the chart with 54 residential units constructed with Spinell Homes a close second at 50 units. Of note is the owner/builder category with 37 single-family permits scattered throughout the MOA. Usually, these owner/builders have some relationship to the construction trades. Anchorage’s top subdivisions include WestGate, a community of duplex condos; Huffman Timbers in the South High School district and Residential Pointe at the end of 100th Avenue. Total construction activity, including residential, commercial, government, alteration and change orders was down by more than 10 percent, a decrease from $466.9 million to $421.8 million. There were no new commercial permits in 2017 and only $10.4 million in commercial alteration. All activity is on a downward trajectory from a 10-year high of $680.9 million hit in 2014. While the Lower 48 has been enjoying a robust economy, Anchorage has definitely felt the impact of the Alaska recession the last three years as construction activity has declined to the level of the real estate crash beginning in 2008. As can be expected with our aging population, elevator permits increased from 146 in 2016 to 226 in 2017. There were no new mobile home permits issued. There were 4,329 mechanical/plumbing permits issued which is a reflection of our aging housing stock. Replacing a water heater requires a permit and a re-inspection by the MOA. It’s just another way for the MOA to generate fees. The MOA has big plans for 2018 with projects such as the mixed-use development near Tudor and Elmore, as well as downtown mixed-use developments with one-bedroom apartments. Most multi-family rental units are two bedrooms, so one-bedroom and three-bedroom units are potentially a good addition to our rental housing. It’s hard to say if any of the big projects get off the ground in 2018 but if they do total permit valuations should take a sizeable jump up. But, don’t expect much change in the single family and duplex numbers as Anchorage’s often talked about land scarcity has finally arrived. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Commercial real estate outlook not so rosy in Anchorage

Lawrence Yun, chief economist for the National Association of Realtors, has forecasted a national 2.5 percent increase in office rent, a 4 percent increase for industrial properties and a 2 percent increase in retail for 2018. Here in Alaska, our commercial real estate forecast doesn’t look quite so rosy, according to the recent presentation at the Building Owners and Managers Association lunch by Mark Filipenko of Bond Filipenko Commercial Properties LLC. Retail lease rates fell in 2017 to an average of $2.04, down from $2.10 in 2016. Class A lease rates still hover at more than $3.00 per square foot while older Class A rates hover at more than $2.50. However, both old and new offer concessions such as free rent and larger allowances for tenant improvements. After attending the BOMA lunch in 2017, I decided to move my brokerage from Class B space to a mid-level Class A space. It was, and still is, a good time to move your offices in 2018. Anchorage lacks industrial land for development and the disconnect between the cost of new construction and existing industrial properties continues to widen. The overall industrial vacancy rate has remained stable over the past three years between 2.22 percent and 2.4 percent in 2017. But, in 2008, metal construction costs were between $120 to $140 per square foot. In 2017, those costs hover between $175 to $200, according to Filipenko, making speculative development problematic. Industrial land, zoned I-1 and I-2, has remained constant at $12 to $20 per square foot, depending on the quality of the dirt. Owner users or owners who have held industrial land for a long time are the most likely candidates for new industrial construction. Locally, overall retail vacancy rates were 4.59 percent in 2017 with mall vacancy rates at 7.16 percent, which was before the Sam’s Club and Sears closing announcements. What worries me most about retail are the typical mom and pop small businesses that populate the first floor of mixed-use buildings. Whether it’s a coffee shop, a small bookstore or a unique gift store, it’s hard to compete with the big boxes and Amazon prime. Price vs. customer service vs. convenience is the retail dilemma for 2018. Whether it’s a drone or a drive-up at Freddy’s to pick up your groceries, it’s hard for the small mom and pops to compete. Henry Chamberlain, president and chief operating officer of BOMA International, recently identified the top 18 commercial markets. Needless to say, Anchorage was not one of them. And, yes, our neighbor to the south, Seattle, topped the chart. While Houston, with 10,000 homes uninhabitable and 50,000 homes with major damage due to the hurricane impact, was off the chart. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

INSIDE REAL ESTATE: Unique factors still impacting Alaska housing market

Before we can predict the future of Alaska’s housing market, we need to remind ourselves about some of the unique factors affecting our market. One dominant factor is that 75 percent of Alaska’s housing was built between 1970 and 1990. A home built in l970 is now 48 years old — way past its functional and cosmetic life. Even one built in l990 is now 18 years old with ineffective energy standards. This aging inventory is why there has been and will continue to be a spike in the Alaska Housing Finance Corp.’s renovation loan programs which include purchase renovation, refinance renovation and second mortgage renovation. When first introduced in 2015, AHFC financed $12.8 million. Loan volume grew to $20.6 million in 2016 and should exceed $30 million in 2018. A recent article from Zillow declared there are 12 percent fewer homes to choose from nationwide than there was a year ago and 51 percent of for sale properties are in the top one-third of home values that are out of reach for first-time home buyers. The national average price for a single-family home is $234,000. In Anchorage, last year the average price of a home was $366,000, the same as in 2016. So not only does Alaska have a much higher sales price it is also following the national trend with 46 percent of our current active inventory priced at more than $400,000. Inventory shortages will continue to plague our local housing market in the affordable price range as well as the middle up range well into the year 2020. Last year there were only 196 single family permitted in the Municipality of Anchorage — only six more than in 2016, a dismal showing for a community of almost 300,000 even taking into consideration Alaska’s mild recession. Permitted duplex units almost doubled from 2016 to 104. Builders sold each side as a condo. Buyers can expect that trend to continue as it helps fulfill the affordability needs of millennials as well as downsizers. Developable land shortages will create higher density housing styles. Alaska continues to have one of the lowest delinquency and foreclosure rates in the nation despite our mild recession. On a statewide basis Alaska’s delinquency rate was 0.6 percent in 2016 with little change in 2017. The national foreclosure rate is double Alaska’s. Due to the shortage of housing, the Federal Reserve rate hikes expected in 2018 should have little impact on our local housing market. Prices will remain stable and properties in excellent condition and amenity-packed locations will begin to sell at a premium. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. That was when Alaska was just beginning to establish relationships with the Russian Far East. As a listing agent, the foreign buyers I met had obtained a loan from a local bank to purchase a home in a southeast Anchorage subdivision. After closing they wanted to put up a satellite dish on the front of the home but the covenants, codes and restrictions for the subdivision required it to be attached to the rear of the home. Their first response was “Well, we’ll just give the keys back to the bank if we can’t put it where we want to.” That seems like an amusing anecdote now but in 1984 Russians were not allowed to own property in their native country. The closest they could come to property ownership was a leased plot for their “deshka,” the equivalent of a summer cabin here in Alaska. Today, it is not unusual for realtors to do business with foreign homebuyers. Although there is no specific state survey, Alaska is an attractive second home destination for foreigners, particularly in recreational communities like Homer and Sitka. An international buyer refers to two types of non-U.S. citizens. Type A is a non-U.S. citizen who primarily resides outside the U.S. and who doesn’t stay in the U.S. year-round. The Type B buyer is a non-U.S. citizen who is temporarily residing in the U.S on non-immigrant visa, such as diplomats, foreign students, and foreign workers or recent immigrants who have been in the U.S. for less than two years as of the time of their purchase. According to the National Association of Realtors, foreign buyers purchased $102.6 billion in residential real estate in 2016, down slightly from a high of $103.9 billion in 2015. Nationally, about 34 percent of foreign buyers come from Asia. Latin American and the Caribbean buyers make up about 21 percent and Europeans 18 percent. China has been the top country of origin for foreign buyers since 2015 as far as number of transactions. China includes the People’s Republic of China, Hong Kong and Taiwan for these statistics. Buyers from Alaska’s neighbor, Canada, are also considered foreign buyers, and according to the NAR survey, make up 12 percent of all foreign buyers in 2016. What is also interesting is that, on average, foreigners purchase more expensive homes, with an average sales price of $477,500 in 2016, compared to U.S. citizens’ average purchase price for existing homes at $266.700. As Alaska’s diverse ethnic population continues to grow, we can expect more and more foreign citizens to purchase homes in our communities which will be a stabilizing factor in the residential market as Alaska works its way through its fiscal dilemma. ^ Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. Our residential land shortage is becoming acute. Lots are getting smaller due to higher regulatory and construction costs while the vertically built footprint increases. Local builders and buyers continue to grapple with the 30 percent lot coverage ratio required by the Municipality of Anchorage for a maximum building footprint for two-story homes while ranches have a 40 percent lot coverage ratio requirement. The greatest frustration homebuyers have today probably is finding a lot wide or large enough to build their new home on. Aside from the lot coverage ratio, lot width dictates the type of home that can be built. The MOA requires a minimum of a five-foot side yard setback. On a 50-foot wide lot that leaves only 40 feet for the width of a new home. Most move-up buyers want a triple-car garage which is 30 feet wide. That leaves only 10 feet for an entry plus a small flex room, if that. New Title 21 dictates a 10 percent front window elevation. And buyers and the community wonder why all homes begin to look alike. Plus, covenants, codes and restrictions for a new home community may dictate exterior elevations and landscaping requirements. Streetscapes take 10 years to develop with Alaska’s slow growing season for trees and shrubs. Trying to find a house plan and a lot that it will fit on is the No. 1 buyer frustration in Anchorage. It is no longer about price or location but finding the right combination. Today’s buyer would rather sacrifice yard size for more vertical space. The boomer will accept minimum yard space and so will families without children. Anchorage is not alone in lot shortages. According to the National Association of Home Builders, the United States has record lot shortages. Lot prices are increasing while lot sizes are decreasing. Western states, including California and Washington, have an average lot price of $78,000 but I bet those published prices are for lots only 4,000 square feet. Add another $50,000 for an Anchorage lot with public water, sewer and a publicly maintained street. Currently, the only opportunity developers have for small lot development is through the cluster-housing ordinance. However, that ordinance requires 30 percent open space which usually means you have to run water, sewer and a road through the open space without having the opportunity for a driveway/lot to pay for those extensions. These construction costs then have to be pro-rated to the overall cost of development resulting in minimum benefit in reducing costs to the new homebuyer. Anchorage doesn’t have national and publicly traded homebuilders or wealthy land developers with access to wealth investment funds to hire lobbyists or outside consultants to advocate for single family or small lot development. Without our community coming together in an advocacy for single family development, which starts always with the land, we will continue to lose more and more of its citizens to the Valley. I have even heard some planners say that is an inevitable transition. I’m not willing to give up quite so easily on the American dream of single-family home ownership. ^ Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. During the recession of the 1980s, the state legislature grabbed a portion of its profits to help balance its budget and since that time AHFC has made a cumulative contribution close to $2 billion, according to its 2016 annual report. Their mortgage portfolio contains 14,939 loans with a delinquency rate of only 3.7 percent and a foreclosure rate of 0.29 percent — well below the national average. As of June 30, 2016, AHFC had 1,612 public housing units available with locations as diverse as Nome, Seward, Juneau, Cordova, Anchorage and Mat-Su. However, the combined wait list from all locations was 3,445, demonstrating what public officials across the state have all finally recognized as Alaska’s housing crisis. The voucher assistance program, where low-income Alaskans lease privately owned rental units from participating landlords, has a wait list of 3,969. As a former landlord who participated in the program, I can attest to its value of social integration as opposed to the “projects” whether new or old, where the low income people live. This is one program where I hope AHFC can do more in the future. There are 73,000 veterans living in Alaska. AHFC supports homeless veterans with 271 Veterans Affairs Supportive Housing vouchers, an increase of 24 in fiscal year 2016. However, the need is much greater with 168 unsheltered veterans according to a Point-in Time count of the homeless population. This is another area where AHFC can and should do more to support its Alaskan veterans. In 2014, AHFC was granted expanded authority by the State Legislature to fund mixed-use facilities. The funding of commercial space for a coffee shop, restaurant, yoga studio, book store, etc., appears to be in direct opposition to its mission of “Alaskans access to safe, quality, affordable housing.” Yes, a mixed-use building provides subsidized rental housing and, yes, low income families will live there because there is a housing crisis in our state and these units will be available. Over the past five years, planners and developers, at least in Anchorage, have developed a love affair with mixed-use. Perhaps because the projects are larger and more profitable? But, there are other programs and opportunities for housing that is more in keeping with AHFC’s mission and all Alaskans desire for a better quality of life. I’m not sure that’s living above a coffee shop. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. During development, horizontal construction of roads, water and sewer, as well as pre-development expenses for entitlements constitutes 18.8 percent of the cost of a home. Regulatory costs during construction amounts to 30.3 percent. Although no actual survey has been done for the Municipality of Anchorage, builders and land developers agree that the cost of delays, permitting, re-inspection and changes to the Title 21 land use ordinance, as well as continued updates to the Design Criteria Manual, put Anchorage in the same category of regulatory costs as the rest of the nation. Although the availability of 1-4 unit residential construction loans has slowly increased over the past three years, the year-over-year growth rates has outstripped availability. Housing starts are also outstripping the supply of lots. There is almost twice the demand for lots than there is availability. Anecdotally, local developers and planners agree that it now takes 18 months at a minimum to rezone, plat and get approvals for new residential developments, as opposed to the previous nine months in past years. Years ago, the Planning and Zoning Commission gave up much of its authority to a platting board and urban design commission, requiring more stops along the way for the approval of any new development. Time is money, particularly when it is borrowed for acquisition at commercial rates. Single-family building permits continues its slow slide downward. The highpoint of mid-year building permits occurred through July 2013 with 204 permits. For the first seven months of 2017, only 113 permits have been issued, a 44.6 percent decrease. This low permit number is not reflective of the mild recession Alaska is currently experiencing but rather the bottleneck due to overregulation. Single-family residential sales have declined only 10 percent from 2,026 in the first seven months of 2013 compared to 1,819 in the same period of 2017, according to Multiple Listing Service statistics. In July 2014, 65 units for duplexes were issued. In 2017, for the same time period, only 32 units were permitted, or less than half. Without a doubt, Anchorage needs more and less expensive housing of all types. The way forward requires less regulation without sacrificing health and safety requirements. ^ Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. According to the case description, the recommended modifications to the Title 21 chapters pertaining to accessory dwelling units, or ADUs, are “intended to expand the supply of residential rental units, make homeownership easier to attain and sustain, and encourage the development of this type of alternative housing. This change will allow more efficient use of residential property, development that is compatible with existing neighborhoods and more affordable housing alternatives.” One positive change is the ability to have an ADU in the R1 (single family zone) as long as it is within or attached to the primary dwelling. Homebuilders have struggled with the “mother-in-law” request from new homebuyers for the past 10 years. This clears up the in and out installation for stoves and other appliances in family rooms. One ADU detached from a single-family dwelling is also permitted on a lot, tract or parcel that is 10,000 square feet or greater and the detached single-family dwelling is the only principal structure. An ADU is also allowed if the lot, tract, or parcel abuts an alley and the ADU is above a detached garage. This provision will make legal the many ADUs already existing in the alleys of South Addition and add to the number of housing units downtown. What will be most interesting to observe, however, is how the community will respond to the ability for a homeowner to now add an ADU on a 10,000 square-foot, single-family lot. I can think of many single-family subdivisions in Anchorage and Eagle River, where within the subdivision lot sizes vary from 6,000 square feet (the minimum for an R1 lot) to more than 10,000 square feet, which in particular occurs at the end of cul-de-sacs. Unless the covenants, codes and restrictions for the subdivision particularly restrict ADUs, it is my assumption that an ADU would be permitted. The only way for the homeowners to prevent ADUs would be to amend their covenants, codes and restrictions, many of which are decades old. Without an active homeowners association, that will be virtually impossible to do. New home communities, of which there are very few being developed, will have to specifically address the right to allow or not allow ADUs on any lot created greater than 10,000 square feet. These are all positive and less restrictive changes from the current ADU requirements and I applaud the MOA, planning department and others who have participated in many meetings to get us to this point. However, here’s the catch: Any landowner operating or seeking to establish an ADU must obtain a building or land use permit. The landowner must also submit an affidavit on a form provided by the MOA, affirming that at least one landowner will occupy the principal dwelling or the accessory unit. The permit and affidavit shall be filed as a deed restriction with the Anchorage recording district to indicate the presence of the ADU and the requirement of owner-occupancy for at least six months out of the year. My questions: Who is going to enforce the owner-occupancy requirement? The zoning enforcement department primarily responds to complaints relating to health and safety. How will the properties with ADUs be financed? As single-family residences or owner-occupied duplexes? And, finally, the recorded deed restriction will be difficult to amend or remove should the current landowner or future buyer decide he/she would like to spend eight months in Arizona rather than six or take a year-long assignment overseas. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. Other highlights of the mid- year permit summary show a 25 percent increase in new elevator permits with 105 issued which is perhaps a nod to our aging boomer population. And as can be expected, structural and electrical permits have fallen proportionate to the continued slide of single-family permits. Huffman Timbers, Resolution Pointe and WestGate are Anchorage’s most popular new home communities with 10, 9 and 6 permits respectively (Dwell Realty, owned by the author, holds the listings for Huffman Timbers, WestGate and Resolution Pointe). However, one has to wonder when these lots are absorbed where the next new residential development will emerge. Huffman Timbers has only 20-plus lots left; Resolution Pointe less than a handful of lots priced less than $150,000 and WestGate is an attached townhouse style condo community on R2A lots. The need for small single-family lots continues despite the unit small lot subdivision ordinance designed for primarily downtown and Fairview infill and the proposed accessory dwelling unit still in draft by the Anchorage Economic Development Corp. subcommittee on housing which will add rental housing but fails to address ownership opportunities. Troy Davis, who builds in Eagle River, has pulled 16 single-family permits so far this year. Following closely behind is Spinell Homes with 15 and Hultquist with 13. Hagmeier Homes has 5 permits as does a new builder, MGJ. Crown Pointe and Merit have four each and you have to wonder how any of the remaining builders can even stay in business with less than a handful of permits. What is most interesting, however, is that owner/builders continue to capture a significant number of permits at 15. This builder group, which are not licensed as general contractors and do not have residential endorsements, build primarily on individual and isolated lots on the Hillside and in Eagle River. Their permit value is slightly lower than the average single-family value of $423,289 that does not include any value for the lot. So “if you build it, it will sell” is probably the best way to describe the new home market as long as the builder is smart about design and amenities so that their product competes well with aging resale properties. That’s most likely true whether it’s a new condo built to five-star energy standards with solid surface countertops and laminate flooring or an $800,000 plus luxury home on the Hillside. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]

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. Although we frequently lament the high cost of our housing, the price per square foot and age of these homes seem modest when compared to some Lower 48 markets. In San Antonio, Texas, a home built in 1902 with 3,637 square feet has an asking price of $695,000. It was recently remodeled in 2015 and is located in an eclectic historic district I suspect similar to our original township. Price per square foot is $191. In the center of Houston on a cul-de-sac, a newer home built in 1981 has an asking price of $689,000 and is 1,916 square feet. That $360 price per square foot is higher in this price range than any new construction reported in Anchorage through MLS. The location of the cul-de-sac is inside the Interstate 610 loop around the center of Houston that is famous for its lack of zoning. Although it’s been several years since I’ve been to Houston, I’m assuming this area is similar to the subdivisions in southeast Anchorage where most lots are serviced by public utilities and are less than a quarter of an acre. The lot for this home is 0.11 acres. In Omaha, Neb., which is home to Warren Buffett and his conglomerate of Berkshire Hathaway companies, a 1975 home with three bedrooms and three baths has an asking price of $715,000 and sits on a quarter-acre lot. With 3,890 square feet, it calculates to $184 a foot. In Bucks County, Pa., about 40 miles south of Philadelphia, you can buy a 1,296-square foot stone cottage built around 1705 for $699,000! I think I’ll pass on that one as I’m not much of an historic preservation buff. What’s interesting about all these homes, however, is that they all have outdoor spaces that add to the value of the property. Some have a summer cottage perhaps similar to our accessory dwelling units. Others have multiple seating areas, terraces, landscaped lighting, sculpture gardens, extra parking and detached garages. Anchorage homeowners also want these exterior amenities. Almost every new homebuyer wants a deck larger than the customary 4x8 builder provided deck. And almost all want the maintenance free Trex, even though its cost per square foot is about $12 to $20 more per square foot. The Municipality of Anchorage also has a rule that requires any deck higher than 30 feet off the ground to have a rail and steps. More and more buyers are also looking for enlarged or a supplemental detached garage. And despite moose and Alaska weather, more and more homebuyers are spending thousands on landscaping, even if for a brief summer aesthetic. So maybe Anchorage homeowners aren’t so different than the rest of the country when it comes to wants and desires. And maybe our homes aren’t as old and expensive as we’ve been lead to believe. Connie Yoshimura is the Broker/Owner of Dwell Realty. Read more columns by Connie at Contact her at 907-229-2703 or [email protected]


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