Despite Alaska’s economic recession, more and more buyers are searching out and purchasing million dollar homes. A recent survey of past MLS sales between $800,000 and $1.25 million, revealed that 32 sold in 2016, 42 in 2017 and year to date 22 sold and 10 in pending status. Currently, there are 38 active listings in MLS ranging from $800,000 to $1.25 million. Although this is a surprising amount of activity, not all million dollar sales are reported in MLS. Some are new construction where buyers contact directly with an architect and builder. Other expensive and sometimes older homes pass down to family members, long time business partners or word of mouth to friends and acquaintances.
So what does a buyer get for a million dollars in Anchorage? For many of these homes, the value is in location. Many of them are clustered in the downtown/old Turnagain area or on the hillside. Many have unobstructed views of the inlet or Chugach Mountains, although mountain views alone do not add as much value as views of Cook Inlet. Southern or western exposure is also very important. Buyers in this price range are also looking for a larger homesite. They frequently want more space, i.e. privacy. On the hillside, they want the right to park and store their boats and motor homes outdoors. In other words, they don’t want their lifestyle dictated by a strict set of covenants, codes and restrictions. Most of these buyers are looking for a minimum of an acre lot and most prefer even larger up to 2.5 acres if they can find it.
Square footage alone doesn’t add up to a million dollars, although most homes in this price range are around 5,000 square feet with a minimum of a triple car garage. In the past few years, we’ve seen contemporary homes with large floor to ceiling windows and flat roofs, selling faster and for more value price per square foot than traditional two-story homes. Older five and six thousand square foot homes built in the eighties without a remodel do not compete as well in the market as homes built after the year 2000. Frequently, a custom home for sale has been decorated with a seller’s taste which may very well not fit today’s buyer. Even willing to pay a million dollars for a home can be frustrating and full of compromise. The alternative to purchasing an existing home is the option to build what they want. That process will take a year but most of these upper end buyers have alternative housing options and can wait out the building process to get exactly what they want.
My only recommendation when choosing to build is to hire an architect and interior designer with an ASID designation. I’ve seen many million dollar home buyers not want to spend the additional money for an architect or designer and live to regret it when it comes to resell. Speaking from personal experience, I’ve built two homes—both with an architect and interior designer and although I don’t frequently say this, I recommend both professionals for added value.
Call in your questions to my new INSIDE REAL ESTATE show on KENI every Thursday at 2 pm. This week’s topic is all about the process on how to build a new home.