Driving down C street on my way to work, I can’t help but reflect how in just a few short weeks the real estate industry has changed. I now carry in my tote a face mask and rubber gloves. My iPhone has the zoom app and virtual tours are taking the place of most open houses, at least for the next few weeks. I’m allowed to return to my office thanks to Governor Dunleavy’s declaration last Thursday that real estate is an essential service. Food, clothing and shelter are indeed life’s three essentials.
These are difficult times and every industry—real estate included–is filled with uncertainty. However, if you were considering the purchase of a home before the pandemic, I encourage you to reconnect with your mortgage lender as rates are at historic lows. One lender is quoting a 15 year conventional at 2.5%. Their VA rate is 3.0% with no points/no fees. Non-conforming or portfolio loans have a 30 year fixed rate of 3.625% with no points and no fees. These nonconforming loan opportunities come and go in the market but are almost always at a significantly higher rate than traditional mortgages so 3.65% for a qualified buyer is exceptionally attractive. In addition to low rates, most of the above mentioned loans come with nominal or zero fees. The reality is it is never the purchase price of a home but the cost of the mortgage that is the most expensive. Despite the pandemic, with low inventory and these historic low mortgage rates, now is not the time for buyers to quibble with a seller over a counter of a few thousand dollars.
This is because inventory also continues to remain at historic lows. According to the March MLS stats, there were 535 homes listed for sale which is the lowest available inventory since March 2014. There were 229 homes sold which is the highest number of closed sales since 2012. The average sales price was also the highest in eight years at $401,429. Before the pandemic and the ‘hunker down’ mandate, and the resulting job losses, Anchorage had an appreciating market. However, these stats are based on a market 45 to 60 days old—the time it usually takes to close a transaction. Last week, Anchorage pending sales did drop to 27 which is a 50% decrease from the same week last year and compared to 46 sales the week before. Only time will tell if that is our bumpy bottom and for how long. But, you never know when and where the bottom is until it is past. My bet is it’s not going to be as long as others have predicted. There is just something about pent up demand that causes markets to change.
Whether it’s 84 or 92%, depending on whose report you read, we all agree the vast majority of home buyers begin their search online. However, I would caution you to beware of virtual staging, photos taken with a wide camera lens or Zillow Zestimates. Our market is still local. One house. One sale at a time. Now is a good time to walk your neighborhood. Wave to your neighbors. Or get in your car and explore an area of town you usually don’t go to but have thought about. This is your community and you might be surprised at what you find.