Due to lack of inventory, the 2017 residential market remained almost identical to 2016 with only a slight dip in single family sales and an average sales price of $366,000+ virtually identical to 2016. Even the condo market held study with an average sales price of $211,000 and a single digit dip in sales. However, there were some definite surprises hidden in some of the statistics. Eight new construction four-plexes sold for $775,000 while older, much older, four-plexes sold for $300,000 less. Buyers who were worried about the high cost of maintenance and repair bought new. They also wanted a garage. A total of 85 four-plexes sold in 2016—a surprising number given the reported softening of the rental market.
Another market surprise was twenty-five homes over $1 million sold during 2017 compared to only 12 in 2016. There was definitely some concession in terms of final purchase price—sometimes as much as 7% but that doubling of million dollar home sales was a surprise to all of us. And I predict that market will remain strong in 2018, despite the new tax code which will cap interest deduction at $750,000 purchase price. Few buyers in this price point care about interest deductions or interest rate.
As I’ve mentioned before, nearly 500 ranch homes sold in 2017. This was also a market surprise. Most of us didn’t even know there were that many ranch homes built in Anchorage over the past 30 plus years. Expect more ranch homes, both as single family and attached condos, to be built in 2018, ranging in square footage from 1,250 to 2,400.
Finally, the Eagle River market broke the $1 million dollar barrier with approximately three new home sales. Eagle River, with its’ scenic mountain and inlet views, is where many newcomers think Alaska is all about.
With 75% of all homes built between 1970 and 1990, the Alaska Housing Finance Corporation has an innovative loan program for renovation of our aging housing stock. You must be an Alaskan resident in order to be eligible. The loan program is for owner-occupied single family residences, duplexes, triplexes, four-plexes, condos and some manufactured homes. Improvements to a home you already own are up to $200,000 with an alternative evaluation and up to $318,075 with an appraisal. The program had a modest beginning with only $12 million in loans but most recently has jumped to $20 million. I predict that loan program will quickly jump to $30 million as owners and buyers become more aware of it.