Housing Market Consistencies and Affordability

Despite job losses and Alaska’s mild recession, the Anchorage housing market has held steady in 2017. The number of residential sales has declined only three percent compared to 2016 sales. However, the average sales price has remained constant at $365,000+. Days on the market for active listings have declined by 17% while homes sold are only on the market for 49 days, the same as in 2016.  A shortage of single family homes has contributed to keeping values steady in 2017. So far, every month in 2017 has seen fewer homes on the market than in 2016. November and December should be no exception to this trend.

The condo market is also stable with only a four percent decline in the number of units sold. The average sales price has remained constant but with a $1,000 uptick in price to $212,517. Days on the market have increased to 65, a 12% jump from 2016. However, the percent of list o sale price has remained virtually unchanged. Condos, like single family homes, that are priced right, are a quick sale in today’s market, due to lack of inventory.

New home building remains at historic lows with only three more permits issued for the first ten months of this year compared to last year. Few digs actually occur in November and December and so Anchorage will continue to be faced with a new home shortage for the first six months of 2018.

Behind all these statistics, however, is a back story of buyer frustrations. New home sites are small, expensive and hard to find. Sellers wanting to move up or downsize can’t find a place to build. Ranches have become the go to housing plan for boomers and seniors with an average requested size of 1,800 square feet. That’s almost impossible to fit on a 6,000 square foot lot when adding a triple car garage to the foot print with a lot coverage ratio of 40% as dictated by the MOA. Move-up buyers want larger lots but if the acre lot costs nearly $200,000 plus well and septic that puts most move-up buyers with families out of the $800,000 price point. Most move-up buyers are willing to spend about $200,000 more than their existing home value to move up but with the average price point of $366,000 or even $400,000 in southeast Anchorage, that’s still out of reach of many buyers. Currently, there is over a 10 month supply of homes for sale over $750,000. For buyers who can afford that price point, now is a good time to do some negotiating before interest rates creep up in 2018 which for now is a sure thing.