It’s hard to describe the current local housing market. Perhaps, the best way is a mixed bag of disappointments and opportunities. More inventory means more choices for last year’s frustrated buyers to move-up, move down or take that millennial first step toward home ownership. Comparing 2018 inventory to 2017, for the first three months of this year we saw 233 more homes for sale. Yet, time on the market shrank by 29% when compared to last year.
Three of the million dollar homes sold just last week. So did another brand new 4-plex for $775,000 with just sticks in the air. Foreclosures are way down. A quick look at the 17 short sales and foreclosed properties on the MLS market last week, reveals that 15 were built in the 1970’s which makes you wonder if homes built in the 1970’s aren’t beginning to lose their economic value. Yet, over 20% of our housing stock was built between 1970 and 1990 so listen up Anchorage! We need more housing yet the bureaucratic bungling of Title 21 continues to drive up our costs, making almost any new single family home out of reach for the average home buyer. The number of homes sold has declined by nine percent and total sold single family volume has decreased by 6%. In my service industry, 20% of our local realtors are earning less today than they did a year ago.
So what’s it all about, Alfie? – to use an old song phrase. Is what’s happening in Anchorage like what I read in the editorial pages of my favorite paper, the Sunday New York Times, that the rich are getting richer and the poor are struggling to find a home? On average, there is only a 2.5 month supply of homes between $300,000 and $400,000. Add to that mix the need for a well-built and maintained home built after 1990 and no wonder the average home buyer is frustrated with the Anchorage housing market.
Rising interest rates are forcing buyers to make a move before the end of the year. Yet, keep in mind these interest rates are more than just about the cost of the monthly mortgage payment. These rates also propel an increased cost for land acquisition, development and the ultimate new home. Anchorage is a very small community of land developers and builders and we borrow money for development. Higher interest rates mean higher costs for the consumer. My advice to buyers in this mixed bag of opportunities is to buy now. And to sellers, if your home is thirty years or older sell now or face future disappointment.