There are currently 103 homes above $700,000 listed for sale in the Anchorage Multiple Listing Service which includes Anchorage, Eagle River and Girdwood. According to MLS, this amounts to over a two year supply based upon current absorption. The amount of inventory and the number of sales since 2009 remains about the same but there are some nuances in the upper range which would indicate a softening.
In 2009 a total of 64 homes sold above $700,000. Over half of these homes (36) sold in the $700,000 range. Ten sold above $800,000 and three above $900,000. But a surprising number (15) sold for over $1 million. In 2009, the majority of upper end sales (43) was either new construction or built from the year 2000. Only four homes sold that were built in the l970â€™s. And only 8 built in the l990â€™s and 9 in the l980â€™s. These statistics indicate a strong preference for newer home construction, despite the considerable remodeling efforts often put into older homes.
Of the 64 homes sold in 2009, 47 had price reductions which averaged over $125,000. Eleven had price increases due to additions and amenities added to new construction homes. These new construction increases averaged over $85,000 per home.
Although we have a few months remaining in 2010, there currently have been 56 closed and pending sales over $700,000. Assuming a few more sales occur between now and the end of the year, it looks like the number of sales above $700,000 will remain approximately the same. This is due, in part, to the lower interest rates, hovering around 3.75%, and an AHFC maximum loan amount of $688,000. However, a closer look at the statistics show that only seven homes have sold over $1 million compared to fifteen in 2009. Interestingly enough, more sales have occurred in the $800,000 and $900,000 range (23 this year compared to 13 in 2009), indicating perhaps a considerably softening in the upper end. In other words, homes that might have sold for over $1 million in 2009 are now being sold in the $800,000 to $900,000 range.
Newer homes over $700,000 have better than a 50% chance of selling than a home built before the year 2000. Unfortunately, of the 103 homes currently for sale, 24 of them were built prior to l980. In the past two years only 15 homes have sold over $700,000 that were built before 1980. The older the home the less likely it will sell without a deep discount. Possible exceptions to deep discounting in older homes may occur in premium locations like Old Turnagain, Bootleggerâ€™s Cove or South Addition. Otherwise, expensive home buyers prefer brand new or like new in South Anchorage or large lots on the hillside.
So if you are a move-up buyer and want to take advantage of historic low interest rates and high loan amounts, now is an excellent time to do some shopping. Be savvy about your location and the farther south you go, the newer the construction the better. You wonâ€™t find any bargains in brand new construction but you will find builders motivated to make a sale and finishing basements at almost bargain basement prices which adds to your square footage and total overall value and livability. Youâ€™ll also find some significant discounting in homes over ten years old, i.e. the older the home the greater the discount.
If youâ€™re a home seller, make sure you compare your home to ones of similar age. In todayâ€™s market, the age of the home is the determining factor in establishing value. Limit your remodeling to cosmetic upgrades. Neutral new carpet and paint will show best. Many older homes where the owner has lived for ten, twenty or even thirty years need to be de-cluttered from the garage to the basement. Donâ€™t try to second guess what a buyer will want in a brand new kitchen or master bath. Leave that remodeling to the new owner.
Finally, set a realistic price, about three to five percent below your bottom line. This price needs to be based on what your competition is in the market place. You can consider past sales but theyâ€™re not as relevant as to what youâ€™re competing against today. Then, be prepared for a fairly long wait. Remember, thereâ€™s a two year supply of inventory. If you want your home to be the one to sell, make sure itâ€™s priced in the bottom third of your range. Setting a realistic first price, based on market statistics, is your best opportunity for a sale. Deep discounting, after a home has grown stale on the market, only weakens the over all market.