It’s always hard to predict the future in residential real estate. I have probably been wrong more times than right when it comes to figuring out the market for the next year. This coming year is a particular challenge with the proposed changes in the tax code which may, or may not, affect the mortgage interest deduction which has been a home buyer benefit since the Homestead Act of 1863. Another proposed change which would have a positive impact on real estate is the reduction in the capital gains to 20%. However, there is still a lot of reconciliation between the House and Senate that needs to take place before reaching any final changes, positive or negative, to real estate. However, either one of these changes, and most likely there will be some sort of change, is going to have an impact on our local real estate market.
In the senate tax plan is the proposed opening of ANWR. If that economic opportunity for the state becomes a reality, I can say emphatically that 2017 was the bottom of the Anchorage housing market. In fact, I might just say that anyway. Statistically, there has been no change in the average sales price of $366,000+ for the past three years More residential sales closed in October (the latest available statistic from MLS) than in 2016. The average days on the market for a SOLD property is only 41 days–the lowest in six months. The last ten months have had fewer homes on the market than in for the same time last year. Single family building permits are still at historic lows. Less than two hundred new homes have been built annually for the past three years. Although absorption is slower in the condo market, prices have remained static, hovering over $210,000. A well-kept home, a reasonably priced new construction home with contemporary amenities, and a diversified marketing plan for sellers, including online and print, will sell your home despite Anchorage’s mild recession and job losses.
FHA and VA have recently announced maximum mortgage increases to $396,750 and $679,650. Both of these government sponsored mortgage programs assist first time home buyers, i.e. millennials towards home ownership. Buyers are wise to shop for mortgage rates and my preference is always to support our local market by working with local lenders.
I have predicted for the past two years that mortgage rates will increase and now, I should put that prediction in bold italics because for sure with a new Fed chair and a strong national economy that’s a certain prediction.
Bottom line: Between now and April 15th is the best time to make a move.
PS. The pantone color of 2018 is Ultra Violet, Pantone 18-3838.