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2013 Real Estate Forecast

by Eric Bushnell

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 3rd 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.

2011 Eagle River Forecast

by Eric Bushnell

2011 Forecast for Eagle River Alaska

January 2011 has arrived and now its time to pull out the crystal ball, or the magic 8 Ball, whichever you think is most accurate.  Now is when I do much of my planning for the coming year.  In the past months we have celebrated the holidays, enjoyed our friends and family, and looked forward to dealing with a new year.

So what will 2011 be like?  Before we decide on our best guess we need to take a look at 2010 and 2009.  How have we fared in the past two years?  In Chugiak and Eagle River we have sold 971 single family homes (This does not include condos), 501 in 2009 and 470 in 2010; down 6.2%.  Not too bad considering that the market was down much more substantially in the lower 48 markets.  The average sales price was unchanged in the Chugiak market, but up 3% in Eagle River and the median sales price was up in both markets.*

The available homes on the market was up at the end of the year with approximately a 5 month supply of homes.  This was up from a 3 month supply at the end of 2009.  The numbers have dropped off now at mid month and when you remove the new construction to be built (homes that have not been started at this time).  Currently there is about 1/3 less homes available; however these number are sure to climb over the next 30 days.  This low number limits a buyers choice and they tend to look in Anchorage or the Mat-Su Valley, trying to find a home they can afford.

If we look at these numbers it is easy to suggest that 2011 will be a slow year, however I would like to point out that we are coming off several booming years.  Our market is more normalized now the ever before.  The sales rate will be steady and I think most client are looking for quality over quantity, a nicer home vs. a bigger home.  I have seen more people trending towards larger garages.  Banks will continue to be a speed bump in the selling process as the underwriting standards become stricter.

My forecast for 2011 is similar to many others I have heard, I believe the Eagle River and Chugiak markets will experience increases in the number of sales and valuation.  A tighter inventory will bring up the price for the home, and there will be more new homes built this year.  There will be less condos, and more single family homes. Here it is the magic number for our area, we will sell:

501 Homes

I really like the extra one!

 *Based on information from Alaska Multiple Listing Service, Inc. (AK MLS) for the period CY2009 and CY2010 but not compiled or published by AK MLS.  Listing content maintained by AK MLS may not reflect all real property activity in the market.

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Contact Information

Lee Realty, LLC
Lee Realty, LLC.
5050 Dunbar Drive #F
Wasilla AK 99654
Office: 907-376-0119
Fax: (907) 376-4039

 

 

 

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