So the question on everyoneâ€™s mind is whether or not 2012 is going to be a turnaround year for residential real estate. The answer is maybe.Â All signs are pointing in that direction BUT Anchorageâ€™s recovery will depend upon the willingness of local lenders to allow speculative borrowing for new home starts.
While other real estate markets in the lower 49 have plummeted, Â Anchorage has done a good job of holding its own over the last three years.Â Depending upon whoâ€™s statistics you rely upon, the fluctuations in home values have been minor, only one or two percent down or up, contingent upon location, price point and condition of the property. Â Â The exception has been homes over $800,000Â whose owners have taken a beating in price and time on the market.Â Whatâ€™s not reported, however, are the concessions sellers have had to make in order to maintain values. In todayâ€™s world of mortgage qualification, itâ€™s common practice to have buyerâ€™s closing costs paid, even in the $500,000 to $600,000 price range.
According to Multiple Listing statistics, there were a total of 2,367 residential dwelling units sold in 2011 within the municipality of Anchorage which encompasses Anchorage, Chugiak, Eagle River, Girdwood and Indian.Â Thatâ€™s 67 more than last year and 82 less than 2010.Â Not much to analyze there.Â A flat market with flat prices and average days on the market still in the mid to high 60 days.
But a comparison of year end statistics doesnâ€™t tell the whole story.Â In the past six months, residential sales have increased by more than 10% when compared to the same time frame in 2010.Â Currently, Anchorage has only 510 residential homes for sale and Eagle River only 105â€”both lows for even this time of year. Â Â Â Low inventory has stabilized prices the past three years and in 2012 this lack of inventory will begin to put some upward pressure on values but it will also Â depress sales activity unless lenders allow for more new home starts.Â A hand count of single family building permits for 2011 shows only 205 permits issued for the entire Municipality.Â This is a record low for new home starts.Â The average value of the permits was $342,334, not including lot costs, which would put the average cost of a new home in the $400,000+ range.Â This compares to the MLS average sales price for 2011 of $322,280.Â Higher new home values helps pull the market upward.Â This is good news for current home owners who would like to see increased equity in their existing homes.Â It is not, however, good news for buyers, although record low mortgage rates compensates for increased values.
Bottom line for buyers is buy now before mortgage rates and prices increase.Â Â Â For sellers, be grateful you still live in the state ranked 10thÂ as the best place to live with low unemployment, a high median income, and one of the lowest rates of foreclosures in the nation.Â Your house will sell in 2012 if it is in good condition and fairly priced.