Despite all the concerns over potential job losses as a result of the state budget cuts and the recent announcement of BP’s sale to Hilcorp, the Anchorage and Eagle River residential markets have yet to demonstrate any negative affect. Pending sales for the past five weeks ending on Sept. 19 increased in Anchorage to 267 when compared to 253 sales in 2018. In Eagle River, pending sales increased from 46 to 60 in 2019. Although there is always some fall out (DFT’s) when using pending rather than closed sales, pendings give you a more immediate look into market activity.
Obviously, mortgage rates as low as 3.35% are helping more entry level buyers move into the market. But those low rates also have a trickle up affect enabling first time homeowners to sell their entry level condos and move up to single family homes which 74% of all buyers prefer regardless of the lot size.
Lack of inventory continues to plague the local market. Over the past month, Anchorage inventory had a total of 531 fewer units for sale than last year. In Eagle River that drop was just over 100 homes. These numbers are inclusive of all price ranges and both resale and new construction homes, according to MLS statistics. Not all sales are reported in MLS as some homes are private sales, particularly when there is a lack of inventory. However, MLS does include FSBOs (for sale by owners).
So it’s hard to say how the BP sale to Hilcorp is going to affect the market. Some BP employees will obviously be re-employed by Hilcorp. Others own homes on the Kenai or in the Mat-Su. And some commute from the lower 48. Those BP employees who do live in Anchorage/Eagle River and own their own home will have the opportunity to accept relocation benefits. Third party relocation companies will not want to keep inventory over the winter and incur the costs for utilities, snow plowing and winterization. Their goal is always to sell homes at the lowest fair market value because generally their compensation is based on how quickly they sell the home. So if the range for a home is $500,000 to $535,000 most likely it will be listed in the low $500,000 in order to quickly move it. Relocation companies are also not interested in cosmetic renovations but may consider health/safety repairs.
There will be some good opportunities for buyers with these homes, many of which will be in southeast Anchorage. For example, one relo home in a southeast subdivision recently sold within a week. These homes will also have been landscaped and include window coverings—two expensive items when purchasing a new home. Buyers interested in these homes should pay close attention to the market. In some instances, the sign will go up before the listing so I would encourage buyers to drive the communities they are interested in.. And use www.alaskarealestate.com rather than zillow or other websites which frequently have a two or three day delay before syndicating into the public domain.
The bottom line is due to our low inventory these relocation homes will be readily absorbed into the market. Buyers need to get pre-qualified and be ready to act quickly when one comes on the market. And not quibble over a few thousand dollars under the asking price.
BP has been an excellent corporate citizen and their employees have made valuable and generous contributions to our community. From one neighbor to another, we thank you.