How’s the Condo Market?

By any indication, the Anchorage condo market continued on its path of stability for the first four months of this year. The average sales price of $214,000 has fluctuated less than $1,000 since 2015. The 94 reported closed sales in April were comparable to the 95 sales reported in 2015 for the same month. Currently, there are 371 condos for sale in Anchorage ranging from $99,000 or less to $500,000 and above. On average, 84 condos sell per month with the most active price range being between $225,000 and $300,000.  
 
In the past, the condo has frequently been referred to as the first step in home ownership. Smaller, more affordable and usually in a location close to employment centers, the two bedroom condo appealed to young singles, students and travelling professionals. However, as they married, partnered and planned for a family they moved up to a single family home. Those buyers still exist in our local condo market but a new buyer has also emerged. Alaskan downsizing boomers are following national trends and giving serious consideration to the ‘lock and leave’ condo lifestyle. What they want in a home, however, is somewhat different than the two bedroom stacked condo. Most don’t want to go home on an elevator or down a corridor to their front door. Instead, they want a double car garage, a deck large enough to BBQ on and a small yard for the family pet or to plant some herbs and peonies. They still like to cook and need a kitchen with a pantry and a five burner cook top stove and canopy hood. Although they may still be active, they worry about their knees and hips and prefer a ranch style rather than a two-story or reverse two-story. They prefer new rather than a resale because they don’t want any maintenance or repair hassles even if managed by an association.
 
Unfortunately, there are not a lot of choices for this type of condo buyer in Anchorage. The vast majority of our condos were built in the early 1980’s and consist of two bedrooms, one or two baths and if they have covered car storage may have a shared single stall garage. Some associations have done an excellent job upkeeping grounds, replacing roofs and exterior painting and others have not. Boomers, living perhaps on current or future fixed incomes, are wary of older condos which may require substantial increases in dues.  
 
Multi-family building permits in Anchorage are at an all-time low.  The new title 21 regulations, affecting four-plex buildings and larger, will increase the cost of new condo development whether townhouse style or stacked units. Because of all the rules and regulations governing a common ownership community, the price per square foot for a condo, whether taxed or a duplex townhouse style, is actually more expensive than the price per square foot of a single family home. Future condo buyers, whether millennials or boomers, can expect to pay more for that lifestyle by year’s end. The best condo buys, whether new or resale, are the ones for sale today.