Although we Alaskans still like to think we’re different than our cousins in the lower 48, there are some housing trends and economic factors that will affect even us in Alaska as we move forward into 2019 from rising mortgage interest rates to the color of bathroom fixtures in new homes. After almost forty years listing, selling and developing residential real estate in Anchorage, I’ve lived and worked through almost every imaginable trend both positive and negative. Just imagine selling a home with a mortgage interest rate at 15.75 % in the early l980’s. Yes, people do buy homes at that rate because people buy homes not because of the interest rate but because of personal factors like marriage, births, divorce, death and job change. Just imagine that Anchorage once built over 6,000 housing units in one year which was more than the city of Phoenix where I am writing this column from, visiting with my Japanese-American family for Thanksgiving dinner. Then, imagine when you could buy a Foxwood condo for $29,000 just by putting it on your credit card. Now, they are worth $132,000 and I sure wish I would have bought one then! I know one builder who told me he wished he had kept every home he had ever built. And I know another builder who did keep a percentage of them and did very well when he sold them off several years later.
So moving forward into 2019, you can expect to pay more for a mortgage. Interest rates will push to 5% plus but hopefully will not hit 6%. Home owners who bought or refinanced at 3.25% will be smug that they hit the market right. But who can really complain when it’s three times less than 15.75%? Labor shortages, rising material costs thanks to tariffs on soft wood from Canada and steel and sheetrock from China, will push new home costs up as well as rising regulatory costs—a national trend, not just a local one we all bemoan that no organization or elected official can seem to do anything about. And don’t forget about those rising interest rates. Most speculative building and development rates have already hit 6% and will keep rising in 2019, another factor that will increase the cost of a new home.
Now, about the color of those bathroom fixtures. Remember turquoise, gold and gray? Yes, I said grey. Regardless of how you spell it, grey is out whether its on the walls or the stand alone tub. If you have grey in your home and are fighting our dark winters, turn it into grayish by adding some white pillow accents, painting a wall white, and increasing the wattage of your lighting. Natural wood is back in 2019, whether it’s a fireplace mantle, a beam or cherry cabinets. And that kitchen island which is at the center of all Thanksgiving dinners? It’s big and bold with a quartz waterfall. The stove top and sink returns to their rightful place along a wall.
Now, I’m off to enjoy Thanksgiving Dinner with my multi-generational/cultural American made family and I hope you have all had a Happy Thanksgiving Dinner with your family and friends.