Real Estate Information Archive

I Love Real Estate

By Eric Bushnell, Associate Broker – REALTOR, C.N.H.S.

Lee Realty, LLC

 Do you like, love, or hate the real estate market?  I love Real Estate!  Not everyone has this opinion, but everyone has an opinion about real estate.  The topic of Real Estate is a great conversation starter no matter where you are.  Consider this:  the American dream is to own a home, and buying a home is most likely the biggest purchase that you will make in your life.  The Real Estate market effects our lives in many ways. During the 2016 election polls showed 73 percent of Americans feel that housing affordability is one of the most important issues facing our nation.  So, it’s obviously going to be part of our conversation.

Real Estate is a popular topic, let me share with you a question I’m asked each week.  “Is now a good time to sell my home?  Maybe???”  Yes, that answer seems ambiguous, until you look at several factors.  Are you moving? Do you want to down size?  Do you need a bigger home?  Would you like to live in a different neighborhood?  Every person has a different reason as to why they need to buy or sell a home.  The worst one is because you have too, and there can be several reasons that you force you to sell, but we will not go into that here.  Your reason to sell, move, downsize, or upsize is a personal reason that is being caused by economic or social factors in your life.  Good advice here is to be sure this is what you need to do.  Is your reason to move based on specific needs, or an impulse?  Impulse decisions can be very expensive.

So whatever your reason is for moving, the next question is -”What will the real estate market be like this next year?” “Is it a good time to sell?”  “Is it a good time to buy?”  I get asked these questions all the time, and here’s a quick answer.  Springtime brings the highest prices of the year.  Mid-summer is when there is the best selection of homes to choose from.  Late summer and fall is when you start to see prices lowering as homeowners try to seller their home before winter, so you may get the largest discount against their original asking price (they may have overpriced the home, thus the big discount). Homes are sold during all twelve months of the year; however a majority are sold between May-August.  The home that is clean and has minimal deferred maintenance typically sells faster than any other home on the market.  People do not want to buy a money pit.  So, clean your home and make it shine like you’re having a dinner party for your companies CEO.  When buying you want the best looking house on the street, curb appeal is very important.

So back to the next question, “What is the Real Estate market going to do in 2017?” That will depend on how people feel about the local economy.  We know that the national economy is getting better, but is our local economy going to follow suit?  Fear can strangle the local real estate market, by slowing people down in making the decision to purchase.  If there’s less buyers looking, then potential sellers may not put their home on the market (in hopes of buying a different home).  The market begins to slow down.  People are motivated by fear of loss or hope for gain.  Now you see why I earlier answered “Maybe, it’s a good time to sell or buy a home”. The Real Estate market is based on everyone’s perception of the future. 

So, here’s my forecast:  The Real Estate market will be good as long as you’re buying or selling for the right reason!

In January 2014 I wrote a blog on 2012 with a forecast for 2014.  Here is how it started:

"Turbulence on the horizon…

Today is January 18th, 2013, what will 2013 bring? Many people are saying that 2013 will be a great year. I believe that we will good times and slow times in the coming year. 2012 saw growth in the number of homes sold in the Anchorage and Eagle River markets. The Mat-Su Valley was closer to flat, with gains in some areas and losses in other. Most will agree that the average home value increased between 1.5-3.5%...” for the whole article click here!

2014 started out pretty slow and then gained speed through the summer months; however the total number of homes sold in the Anchorage and Eagle River markets appears to be lower than 2012.  The Mat-Su Valley, Palmer and Wasilla, saw an increase in sales by approximately 18% through the first three quarters of the year.  Still waiting to see the final numbers to see if this sales trend was able to sustain the pace.  New construction in Anchorage and Eagle River was down this year as less homes were built.

2015

So let’s start with new construction.  There will be less building sites available this year, and building prices will be higher.  Keeping this in mind, it is safe to say that there will be fewer choices to be had within the Anchorage bowl.  In the Mat-Su I anticipate new home sales to be about the same as 2014.  The valley will continue to be a bargain compared to Anchorage; newer homes and in most cases more affordable.  Land is less expensive in the valley.  Average cost per acre is about $55,000 and in Anchorage the average .25 acre lot is $140,000 or more.  The valley is home to more contractors.  This naturally leads to more competition than in Anchorage, and competition leads to lower prices.  The bargain will be in the valley in 2015.

Existing home sales will most likely remain fairly stable in the Anchorage market, and we should see a minor increase in prices.  Interest rates remain low which allows home prices to raise.  If we see an increase in interest rates we may see an eventual drop in existing home prices.  New homes will remain higher.  The valley is expecting growth this year similar to last year’s numbers.  Why?

Low gasoline prices fuel development in the Valley.  It's that simple.  There is more to this equation.  Business owners look to the valley for their workers.  If you're going to start a business this year the Mat-Su Valley is the place to do it.  There are more available workers, and according to the State of Alaska, the workers are more dependable.  There is talent available in the valley.

2015 is set to be a good year.  Yes, there is the head winds of a new governor, and the low oil prices.  These factors are also key contributors to the growth of the valley.  The Mat-su School district is more nimble than its Anchorage counterpart.  Their also our biggest employer, with growth comes more children.  This adds more schools and more jobs.  

There is also one other piece to the puzzle, TAXES!  Many Mat-Su communities already have taxes in place and pay their way.  Anchorage will feel some pain in this area, as much of the Municipality's income comes from the State of Alaska.  With lower oil prices there will be budget issues.  The Mat-Su borough should be able to deal with these budget shortfalls better than the Municipality of Anchorage.  

Now is a great time to invest in rental properties.  National home ownership rates are about 62%.  That means that 38% of your neighbors are potential renters.  Not everyone wants to own a home.  Some people would prefer that you take care of the home.  When there is economic uncertainty people don't take risks. Now is the time to take advantage of low interest rates, and high rental rates.

If you would like more information about the real estate market you can call me at 907-360-7471.  I would also be available to speak to any group that would like a speaker on this topic.

Happy New Year, see you in 2015!

There seems to be more activity in the market right now.  I've noticed that there are more people visiting my website.  Homes are getting more showings.  And three homes I had listed are now under contract.  these sellers are very happy they listed their homes now before the busy summer months.

I'll be out this afternoon visiting with one seller and then showing a couple a home in Wasilla, they're considering purchasing.  There is optimism in the air.  Even Wall Street had a good day, stock market closed in positive territory today.

There is currently 94 homes available for sale in Eagle River; however 22 of those homes are under construction and not ready to move into at the moment.  That leaves 72 options.  Last February 26 homes sold, and then in March 80 homes came on the market, and in April/May 184 homes came on the market.  103 of those homes sold, but that a lot of competition. 

My advice is get started now.  You will most likely get the price you want for your home, if its clean and ready to sell.  Homes that don't shine will be sitting on the market in September.

Be ready, call me today for a free consultation.

Current inventory here in South Central Alaska is at the lowest point I've seen in my ten years of real estate.  In any given price point the select is very slim for buyer.  I remember when I moved back to Alaska in 1999, I encountered a similar market.  I was only able to look at a dozen homes that fit my criteria and budget.  I looked from South Anchorage to Chugiak to finally find a home.

This creates certain market dynamics that would lead a seller to believe they can get whatever they want for their home.  This is somewhat true, but they should be cautious.  Buyers can only afford so much, and interest rates are rising; a full point over last year.  This takes $30,000 out of a buyers buying power at the $300,000 range.

So is the market going to go up in value, but down in the number of homes sold? Yes, that is what is going to happen for some home owners selling.  Many will try to raise their asking price too high. The smart seller will price their home approximately $10,000 below their immediate competition.  This makes their home look very attractive to prospective buyers, and usually results in a quicker sale.  the seller that does not do this, has their home sit on the market as new smart home owners come on the market just below them.  These home usually attract the buyers currently in the market, and sell rather quickly as well.

My advice is not to get greedy.  It's better to sell quickly at a lower price then hold out for that buyer that will pay your price.  If you can find them.

Turbulence on the horizon…

Today is January 18th, 2013, what will 2013 bring? Many people are saying that 2013 will be a great year. I believe that we will good times and slow times in the coming year. 2012 saw growth in the number of homes sold in the Anchorage and Eagle River markets. The Mat-Su Valley was closer to flat, with gains in some areas and losses in other. Most will agree that the average home value increased between 1.5-3.5%.

At a recent Chugiak/Eagle River Chamber of Commerce luncheon, Mark Edwards, Economist for Northrim Bank spoke on the economy. Tax reform and government spending are issues here in Alaska as well as Washington DC. He also explained that many new businesses are started with funding taken from the equity one has in their home. So if values are increasing, we may see more new businesses that will lead to job creation.

As we move through the year I believe inflation and interest rates will drive the ebb and flows of the housing market. Currently here in Alaska we have limited supply of homes on the market. Unless values increase 5-6% many home owner may not be able to sell their homes without taking a small loss. So for the first half of 2013 I believe the new construction market will do well. As prices rise in 2013 more homes should come on the market, leading to a saturation point in the 3^rd Quarter.

If interest rates rise, buyers will have less buying power. If inflation occurs in any significant amount then new home prices will also rise above the reach of many buyers. Looking at all this information it is my opinion, and let me emphasis this, my opinion, the market will see good growth in value of homes below $350,000. However buyers in this range will get less for the amount they spend as the year progresses. The best deals will be in the spring.

Higher end homes with smart owners will bring their homes to the market slightly below the retail value and sell quickly, while those trying to take advantage of rising prices that attempt to sell for full retail will sit on the market. If interest rates rise, we will see downward pressure on the higher priced homes.

So fasten your seatbelts. Get your home ready to put on the market before the federal government starts messing with interest rates and taxes. I can create a market evaluation for your home and give you advice on when would be the best time to sell your home.

Call me at 907-360-7471 or click this link Market Analysis.

Today is the last day that all will be normal...or is it?  Tomorrow according to the Mayan calendar is the end of the world.  So now is a great time to reflect on the good that has transpired in 2012.

Real Estate has done well this year here in South Central Alaska.  The Anchorage market had one of its best years in recent history.  I Eagle River we're on tract to sell approximately 12% more homes this year than last.  The Valley market started the year well, but has gas prices rose homes sales declined.  No with the price gas back down in $3.50's or below, we are seeing more traffic to Valley homes.  Land sales in 2012 were very good in all markets, and we have seen 20% of the Powder Ridge Phases sell already.

The weather has not been a positive point in 2012.  Last winter was very snowy, so if you like to ski and snow machine it was excellent.  The summer was cold, and this fall snow had been non-existent until recently.  It's been cold, definitely colder than normal.  Yesterday morning it was -26 at my home in Wasilla.  Today its warmer but we have 30 mph+ winds, wind chill in the -30's.

On a personal note, I stepped away from management and it has been perfect for me.  I've been able to concentrate on more real estate.  I've had time to be with my family.  My daughter came back from a year in Bolivia, where she was an exchange student.  She had a great time, but its good to have her back.  I had time to work with our local Eagle River Area Rotary club to build the Let's all Play playground here.  This was the first full accessible playground in the state, so that kids of all abilities could play together.

This fall I've had more time to  spend coaching hockey which I love.  I'm coaching two teams, Mini Mites (4-6) and Suirts (9-10).  We have agreat time and I am getting in better shape.  Three days a week at the gym is helping as well. 

2012 was a good year.  I made decisions and moved forward with my long term plans.  I was able to work with the chamber of Commerce, Eagle River Area Rotary, Sunrise Rotary, Mat-Su Amatuer Hockey Association, my family, the gym, and was able to go hunting this fall.  Yes, I did get a moose and my freezer is full.  Life has been good this year.

How was your 2012?  I hope the world doesn't end tomorrow, because I've go more on my bucket list to do.

Perception is a fickle beast.  One quote I remember from my early days in sales was:

"Perception is reality regardless of the truth"  ~Zig Ziglar

Last night I participated in a town hall round table discussion hosted by the Chugiak/Eagle River Chamber of Commerce.  As a current member of the CER Chamber and one of it's Board of directors I was the leader at one of the tables.  Our goal was to get the pulse of the community before our planning retreat this weekend.  We discussed the four topics over the course of the two hours.

We discussed why people moved to Eagle River as well as why they stayed.  We looked at the challenges of running a business in today's economy.  We discussed challenging budgets, taxes and growth.  How our community show look and feel, as well as what types of businesses we would like to see.  We also discussed threats to our way of life in Eagle River. The room was filled with business owners, residents, and many local and state politicians.

One discussion stood out in my mind and at one point became heated.  This was concerning home prices and the ability for our residents to sell their homes and move if they need to.  Our market suffered like many markets across the country, but real estate is local, and luckily we did not see the devastating foreclosures that many communities saw.  We saw some depreciation, in 2006/2007.  In my case I saw a 10% drop from the summer of 2006 to summer of 2007.

We saw this mainly in our older homes, which I written about in years past.  At the time I forecasted (speculated) that we would begin to see growth in approximately 5 years.  Fast forward to this year and our local markets saw increases of approximately 4% over a 6 month period.

The discussion that became heated was that values were falling her in Eagle River, and it was obvious because this information was on the Internet.  Which reminds me of another great quote:

"It's on the Internet, it must be true!" ~Ben Franklin

  There are forecasting websites that try to use sophisticated algorithms to determine the value of your home.  In some communities these work quite well, in Alaska they do not.  Alaska is a non-disclosure state where we do not disclose what you bought your house for.  There is no good information for the website to determine the value of the home.  This leads people to make incorrect assumptions about the value of their homes.  They need to hire a local expert who has access to this sales data.

This website showed declining values, which is the furthest thing from the truth.  What we have seen in our area is less volume, and this make a huge difference in the values you can obtain for your home.  If you home is worth $500,000 but there are only 3 buyers in the market, but they only qualify for $450,000 and they want to buy your house, that does not make your house worth $450,000.  The unfortunate part in this situation is that if there is no one who is buying in the $500,000 range the seller will have to reduce the price till the meet a level where there is a qualified buyer.  This is a complicated situation with lots of variables that affect values of the long term. 

Some sellers have to sell, while others just want to sell.  These two sellers will make different decisions when confronted with the same situation.  Many in our community move here then leave after only 3 years.  They want to own, but ownership has risks, when you have to sell so quickly.  This is a major concern in our community in which 30+% of our resident are active duty military.  They do not have a choice as to when they need to move.  Some will have to pay when they go to sell their home, some will not.  I will discuss the smart choice here in a future blog.

Owning a home is a smart move, it is not the wealth building bargain it was just a few short years ago, but it is still a better investment for most than renting.  But rest assured, home prices are not falling in Eagle River.  If you have question about this or want to know what you should do, please call me at 907-360-7471.

What's happening in the Eagle River real estate market this year? Is the market going up, is it exploding?, Is going down, can we sell? Should we buy? Will interest rates keep going up, are these the best rates?

These are the questions that keep people awake at night if they need a bigger home, in many Alaskans case, their about to be transferred to somewhere else in the country. Currently our real estate market is very stable; interest rates are not fluctuating wildly, and homes prices are stable.

If you looked at the number of homes currently available in Eagle River Alaska, you would only be able to preview 101 existing ready to move into homes. That in a commnity of 31,820 people, and approximately 11,000 homes. That number suggests a strong sellers market. However when you look closely at what is on the market, and how many homes are pending each week the homes going into contract do not keep pace with the new homes coming into the market.

Eagle River Listing Inventory 

• 54 Homes listed in the last 4 weeks
• 22 homes placed into escrow(pended)
• 101 Homes available for sale

The market just south of Eagle River is Anchorage, the Anchorage market is much larger, with close to 300,000 residents. the number of sales is proportionate.

Anchorage Listing Inventory 

The market just north of Eagle River is Mat-Su Valley, this market is much larger, with close to 95,000 residents. The primary markets in the Mat-Su Valley are Palmer and Wasilla.

Palmer/Wasilla Listing Inventory 

• 153 Homes listed in the last 4 weeks
• 89 homes placed into escrow(pended)
• 330 Homes available for sale

New construction homes that are not complete were not included in the listing numbers because many of the new construction listing are not started at this time. They may be included in the pending numbers.

As you can see there is not much to choose from in either market, and the buyers have to make quick decisions when a nice home comes on the market. Sellers should make sure that there home is clean, bright, and ready for viewing before they place it for sale. A good Realtor can show you what to do if you find this task overwhelming.

Interest rates are still at an all time low, and are hovering in that 3.75% and 4% range according to many of the local lenders. Loans are harder to come by and if you do not have a high credit score there are extra fees that you will have to pay to obtain the best rates.

What I take from this data, which is provided by the AlaskaMLS and may not include all sales, is that our market is good, and for the most part balanced. I feel that if a seller has a desirable home they will sell it quickly and for a good price. For buyer there are bargains to be had because some of the homes out there need work.

I lso think that are population is holding onto their homes longer than they have in the past 10 years and thus we have less inventory and sales.

We are back to the new normal.

Call Eric Bushnell @907-360-7471 for more information about these markets or visit him on Facebook at http://www.facebook.com/ericbushnell.realtor 

Fall is here, the leaves are turning and at night there is a hint of frost.  When you walk outside you can smell the ripened high bush cranberries.  Fall has arrived in South Central Alaska.

So what does this mean to our local real estate market?  Inventories are actually down from this time last year, with 2670 total homes available in the Anchorage and Mat-Su markets.  In August the was a 25% increase in sales over last year.  This is not surprising since the First Time tax credit ended last June.  Many of the early year sales would have happened later.  Overall this year there has been a good number of sales each month.  The Mat-Su Market has done about the same as last year, and Anchorage is seen less sales.  The Eagle River market has remained the bright spot in the Anchorage bowl.

What is happening to the prices of Eagle River Homes?

This is the time of year we see some of the bigger discounts on homes as sellers try to sell before winter.  The fall market in Eagle River has traditionally been very good.  There seem to be many buyers in the market and with interest rate on government loans so low (3.75% on a 30 year VA loan), we are seeing many buyers in our market.  There is some uncertainty; and how can there not be when you here the national media crying wolf everyday.

A recent poll on the economy reflected that 75% of Americans were not satisfied with what our lawmakers were doing and felt we were on shaky footing.  But when asked how they were doing 75% indicated that they were stable and dong well.  We know that right no some people are having a rough go of it, but for the most part people seem to be doing fine.  Home ownership may not be the huge wealth building tool it was for many years; however it is an asset worth owning.

For a more detail view of our local economy feel free to call me at 907-360-7471. 

Mid Summer Market update for Eagle River Alaska

I know that a lot of pople are out and about enjoying the summer.  So far this year the weather has been decent, not great but at least everyday has not been cold and rainy.  so I know that everyone is enjoying themselves.  Dip net fishing on the Kenai River has been awesome, the Eagle River Bear Paw was great and this week I know my wife is hiking the Crow Pass trail from Girdwood to Eagle River.  so there is plenty to do out there.

So with all this going on; what's the real estate market doing.  I've seen recent reports about consumer confidence being down, but that does not appear to be the case here in Eagle River Alaska.  The Mat-Su valley(Palmer/Wasilla) is holding its own compared to last year, and Anchorage is down about 9.5% in the number of homes sold.  Eagle River and Chugiak are up 16.1% so far this year. 

One difference this year is that we are selling more land for new home construction, and as a result of this new home sales are up.  This is much different then what we are seeing in the markets in the lower 48.  It should be noted that many towns in the lower 48 are doing just fine.  Middle America is surviving, even though the talking heads and Wall Street don't give us much credit.

There are tough sales out there, and there is more homes available this year than last.  the selection is good, and some homes are just over priced for their condition or location.  Remember the #1 rule in real estate is location, #2 is condition, and #3 is Price.  You can't change #1, but you can change #2 & #3. 

For more detailed information feel free to call me anytime. 

Remember to rinse your fish before you put them in the smoker, they turn out too salty otherwise, but most importantly...

Enjoy the summer!