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!

Daily Real Estate News | Friday, January 24, 2014 The housing market has been experiencing a “healthy recovery” over the past two years, with home sales last year rising to the highest level since 2006, according to the National Association of REALTORS®' latest housing report. “Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates, and a large pent-up demand driving the market,” says Lawrence Yun, NAR’s chief economist. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”Existing-home sales rose 1 percent in December 2013 compared to November and reached a seasonally adjusted annual rate of 4.87 million.Existing-home sales for all of 2013 reached 5.02 million sales, 9.1 percent higher than 2012, and the largest rise since 2006 when sales were at 6.48 million at the close of the housing boom, NAR reports.  Home prices were also on the rise in 2013, up 11.5 percent over 2012, with a median existing-home price of $197,100 last year compared to $176,800 in 2012. It was the strongest gain in home prices in a year since 2005, when home prices rose 12.4 percent, NAR reports.NAR President Steve Brown says that with job growth expected this year, home sales should hold despite rising home prices and higher mortgage rates.“The only factors holding us back from a stronger recovery are the ongoing issues of restrictive mortgage credit and constrained inventory,” Brown says. “With strict new mortgage rules in place, we will be monitoring the lending environment to ensure that financially qualified buyers can access the credit they need to purchase a home.”Housing Recovery Regional SnapshotHere’s a look at how existing-home sales fared in December and for the year across the country:Northeast: Existing-home sales fell 1.5 percent in December but remain 3.2 percent higher than December 2012. Median price: $239,300, up 3.6 percent from year ago levelsMidwest: Existing-home sales dropped 4.3 percent in December and are 0.9 percent below year ago levels. Median price: $150,700, 7 percent higher than December 2012.South: Existing-home sales rose 3 percent in December and are 4.6 percent higher than December 2012. Median price: $173,200, up 8.9 percent from a year ago.West: Existing-home sales increased 4.8 percent, but are 10.7 percent below a year ago. Median price: $285,000, up 16.0 percent from December 2012.By REALTOR® Magazine Daily News

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.

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.

 

Hurricane force winds have been experienced in Eagle River in recent weeks, and hundreds of trees have been broken or torn up by their roots.  Strong winds are not new to Alaska, we see them every year and its just another storm.  Although this particular storm did make the news channels in the Lower 48.  The storm was abnormal for this time of year, usually we get these winds during the winter months. 

I was visiting Powder Ridge talking to some of the home owners about the storm on Saturday, helping pick up the debris and cut up the fallen trees.  One home owner lost 17 trees in their back yard.  As I was visiting with them they shared their experience during the storm and I found it to be a great compliment for the builder I represent, Nolan Homes, LLC..  Here's what they told me.

'They had been relaxing at home that night and had seen the trees moving in the wind but had no idea that the winds were as strong as they were. They could see the trees move but the normal shifting of their home that they had in the previous home was non existent in the new Nolan Home.  They didn't think it was that bad and maybe the weather forecast was wrong.  Then they heard a loud bang from the back of the house.  The wind had pushed over several trees, and on of them had anchored the dog run attached to the house. 

The cable had torn away from the house taking a small portion of the siding with it.  The next day as they were cleaning up they inform me that my builder had checked in with them and offered to have his crew assist them with the repairs.  They were very happy with this and were really happy at how well the home was built because at no time during the high winds did they feel the moving or experience any wind coming into the home."

I thought this was a great compliment to the building integrity of Nolan Homes, LLC..  As I was walking through the home he is currently building it was immediately evident why the home is built so well and can survive through these high winds.  The builder has installed multiple supports to hold the home to the foundation, as well braces along the top of the ceiling holding the rafters to the home.  It's this building integrity the home owners across the street experienced.  As I visited other homes in the neighborhood I noticed that some of the builders did not use this similar building practice. 

Now I understand why Nolan Homes, LLC. are better that the competition, not just because of the craftsman styling they build but because they just build a better home.

I recently had the opportunity to visit Ed Galvez in Lake Clark.  Ed has built a cabin in the Keyes Point Subdivision and for several years extended an invitation to come visit.  Well the stars finally aligned and I was on my way.  I caught a flight from Merrill Field in Anchorage on Lake Clark Air; they flew me to Illiamna in a Piper Navajo and then I jumped in Cessna 206 for the flight to Keyes Point.

Keyes Point is located on Lake Clark approximately 250 miles from Anchorage. 

• Lake Clarkis a lake in southern Alaska. It drains through Six Mile Lake and the Newhalen River into Iliamna Lake. The lake is about 64 km (40 mi) long and about 8 km (5.0 mi) wide.Lake Clark was named for John W. Clark, chief of the Nushagaktrading post in 1891 and the first American non-Native to see the lake. The Dena'ina Athabascan name is Qizjeh Vena which means "place where people gather lake"
• Lake Clark is within Lake Clark National Park and Preserve.

Wow, what a beautiful place.  The flight was great and when I landed in Keyes Point Ed and Phil were there to meet me.  Phil is the Caretaker for Keyes Point and is there to meet the guest when they arrive.  He will meet your guests and bring them to your cabin when they arrive.  Ed and I jumped on his Honda (ATV) and headed for his cabin.  Ed has spent approximately 12 years building this cabin, and yes, it is very nice.  His cabin is located on the eastern shore of Keyes Point and looks across the Lake at the Alaskan Range.

Over the next couple of days Ed took me around Lake Clark in his boat.  We spent a day down on Six Mile Lake fishing across from the village of Nondalton.  The river was full of Sockeye Salmon.  As we pulled up to the river the bottom of the small bay was dark with thousand of salmon.  As we made our way up into the river the amount of fish we saw was just staggering.  We spent the afternoon fly fishing for Rainbow trout.  As I stood on the bank looking into the water I would watch 20 to 30 Sockeye Salmon (reds) swim upstream.  We were fishing for the Rainbows that follow them up the river. 

This stream was very clear so it was very easy to see the salmon and the sight was amazing.  every few minutes, the fish would surge by.  We were not successful in landing any Rainbows, but we did catch several Grayling as well as dozens of Reds.

On the way back to Keyes Point we drifted the narrows, a small river that flows from Lake Clark to Six Mile Lake.  Many fisherman fly in to local lodges to fish for Grayling here.

I was successful and land several very nice fish in the 30 minutes we spent floating this short stretch of water.  My first full day on Lake Clark exceeded my wildest expectations.  We finished off the day with a great dinner back at Ed cabin.  I slept well that night.

The next days we met with perspective buyers and toured the lots we have available on Keyes Point.  We discussed the logistics of obtaining building supplies and crews to build a cabin or home.  Most homes on Keyes Point are in the $250,000 to $500,000 rand with one close to $1,000,000 and a lodge that is, well I'm not sure what its worth, lets just say its not for sale and probably won't ever be.

We did finally get out on the water and headed up the lake to the Kijik River.  The Kijik River is in the Lake ClarkNational Park and this is where the ghost town of Kijik is located.  We spent the afternoon fishing this area for Grayling and Lake Trout.  The weather was awesome and we did get a little sunburned.  But all good things must come to an end; the wind started to pick up, and wind and Lake Clark can be very dangerous.  We were approximately 20 miles up the lake from Lake Clark, so we high tailed it out of there before the water got too rough.

On the way back we took a side trip into Chilitna Bay for some Northern Pike fishing.  We made a short run up the Chilitna River to Long Lake, and along the way saw a huge Moose.  I'm not going to tell you were because this boy was trophy class. He was big and the velvet was just coming off his rack (antlers).  We watched him for a few minutes (yes I have video that I will post on my Facebook Site), before he wandered off into the woods.  Too bad hunting season does not open for two weeks.

The wind was picking up as we came back to Chilitna Bay so we headed carefully back out onto the lake.  Lucky for us the wind was switching and we made our way home before the east wind picked up.  We were lucky, 15 minutes later and we would have been sleeping on the beach for the night.  the weather got pretty ugly as we arrived home for the night.

 

 The next day the weather kept us off the water, but I did enjoy myself on Keyes Point.  We spent our time taking photos and video of the Keyes Point area. 

My time on the Point with Ed Galvez was wonderful and I hope to do it again soon.  Ed is a great host and was able to explain to me about the history of Keyes Point and the Lake Clark area.  This is a part of Alaska that you must visit.  Lake Clark National Park is the has the lowest visitor count of any National Park.  Most likely because of its remote location.  This is beautiful country.

Please contact me if you would like to know more about this beautiful area.  We do have several lots available ranging from $15,000 to $50,000.  One already has the well and septic installed.  The views are tremendous and the area is truly breath taking.  I am currently working out the logistics and we should have completed home estimates available if you would like to build your Alaskan dream home.

January is when everything begins anew.  Here in Alaska it is traditionally on of the slower months, but that is because so many people are busy during the holidays.  However, it should be noted that this should be one of you busiest times of the year.

This is when you need to decide if you will selling a home in the spring.  You need to decide which Realtor you will be choosing.  If you're a buyer you're looking at neighborhoods you might want to move to.

See there is lots of activity in January.  Now is when everything begins.  so get crackin! 

Visit www.leerealtyalaska.com for your real estate needs!

Snow, Lights, Family, and buyers looking at my house?

If you need to sell your home this is probably what you thinking about.  I've had many conversations over the years with Realtors and Sellers about the merits of having a home on the market during the holidays.  It is my belief that this is one of the best time to sell a home during the winter months. 

I understand we have holidays coming.  Next week is Thanksgiving, for some families Hanukkah is coming next, and then we have Christmas and New Years Day!  We all have events planned, relatives may be coming to visit, or you may be hosting your annual Christmas party.  Lets be honest with ourselves, we always have something going on.  Now is never a great time to change things in our daily routines.

Here's why selling your home right now is a good idea.

First - Your home will be decorated for the holidays and most likely looks very festive.  You will have bright lights, wonderful selling decorations, and the lights will be on showcasing what a wonderful home this is.

Second - By having it decorated show that this home can be lived in and that it is a fun home, it has character. 

Third - There is less competition on the market.  Many people are not reading this blog article and have pulled there home off the market, their going to be smart and wait until next spring and sell it then.  Which is when the snow is melting and your yard will look horrible.  Right now its covered with a blanket of beautiful white snow that sparkles under  Christmas lights you've installed on the exterior of your home, saying look at me, I'm Beautiful!

Fourth - Interest rates are very low right now and provide buyers incentive to purchase.  In the spring there is a good chance they will inch upwards, or worse go way up to 6 or 7%, right now rate are hovering at 4%.  If rates go up buyer budgets go down, which means less people can afford your beautiful home.

So now is the time to put your home on the market.  I am sure there might be a couple of negatives, like the buyers might want to come during your Christmas party, but worst things have happened.  You can always reschedule, or invite them to join you!  You never know what might happen!

Hears to the Holidays and a wonderful New Year!

 

If you would like to know what it would take to get your home sold right away follow this link and I will contact you shortly!  Sell my Home!  http://www.valuemyalaskanhome.com/