Selling real estate is like fishing. You dip the home in a sea of social media, print and online marketing and wait for a buyer. Some fishermen are more aggressive than others and try fancy flies, travel farther upstream or out in the ocean but it’s hard to beat the odds when it comes to time on the market and price per pound. This summer I’ve heard a lot of fishermen talk about the lack of fish—whether it’s caused by commercial trawlers, foreign intercepts or warm water. The discussion in the residential real estate market is not much different. Longer time on the market for that buyer to come along, particularly if you’re looking to catch a big king, i.e. expensive home buyer.
Last year was a great year for fishing and real estate. Plenty of fish and buyers. There’s no doubt the 2016 market is making an adjustment from the high water mark of 2015 but the statistics don’t indicate the depth of despair as purported by some. The month of July is a good indicator in real estate and fish. Recently statistics from MLS indicate a $5,000 drop in the average sales price of a condo when purchased in July 2015 compared to 2016. The average sales price of a condo now is $215,084. Because our local listing and sales activity is cyclical, just like when is the best month to fish for your king salmon, I much prefer monthly year over year comparisons to annual average. You can also spot more current trends, whether upward or downward, by looking at monthly statistics. What is surprising, however, in these recently published stats, is that the time on the market has actually declined by five days for condo sales.
Single family homes have dropped by $13,000 with an average July sales price of $365,217, just a few dollars shy of the July 2014 average. That’s more than a four percent drop in a twelve month period. Plus, days on the market have also modestly increased. Last week, there were 200 more single family homes for sale in Anchorage than a year ago while the number of pending sales remains the same. The difference between the stability of the condo market and the modest decline in the value of single family homes is interesting demographically. I would attribute it to the millennials putting a tepid foot in the water towards purchasing their first home. Condos are affordable and carefree. However, when a condo becomes more expensive and luxurious and reaches or exceeds the average sales price for a single family home, it becomes subject to the same pressures as in the single family home market, i.e. a reduction in the final sales price and longer time on the market. Meanwhile, the ‘boomer’ is stuck trying to figure out not only where to live (Anchorage vs. Arizona or both) but how. Keep their aging single family home, move to a new home with no stairs, less maintenance and utility costs but costing almost the same or more on a price per square foot or join their millennial sons and daughters in condo living? But in between those two demographic bulges are some generation Y and X’s who can right now go fish and find some good single family buys in Anchorage.