Why the Housing Market Is Not What You Think

There’s a lot of discussion about the down turn in the Anchorage housing market but how much of it is based on facts? Here are twelve facts that will let you be the judge of our local market.

1. The average sales price of a single family home that sold in December 2016 was $366,328. This was the highest average sales price in 14 years.
2. The 250 reported sales in November 2016 was the highest since 2005. The 246 sales for December was identical to 2015 and the highest since 2005.
3. There is less than a two month supply of single family homes priced under $500,000.
4. The number of condo sales in December was 105, the highest reported condo sales of any month in 2016.
5. Single family building permits hit an historic low of 190 in 2016.
6. The number of duplex units built either for sale or rent was only 56. This is a popular and affordable building type for duplex condos.
7. Only 2 Anchorage builders, Spinell Homes and Hultquist Homes, built 15 or more homes.
8. The average permit value of a new home is $399,195 and does not include a lot value.
9. Multi-unit residential building permits plummeted to 96 from a high of 369 in 2015. 95 units is a five year low.
10. There are 18 Anchorage homes for sale priced over $1 million. Less than one of these homes sell per month. Current absorption rate is 21.27 months.
11. In the last six months homes sold for 98.70% of the adjusted list price.
12. From the original list price to the final sales price there was a 5% decline.

Some conclusions are obvious from the above ‘facts’. The majority of Anchorage’s buyers are buying under $500,000. That seems to be a breaking point for home buyers even if they can afford more. Today’s buyers are financially cautious and also like to negotiate as seen by the increase in discounts from original list price. New homes are hard to find and in 2017 most will be sold from a piece of paper, i.e. schematic and features list. New home buyers will need to have patience as the wait for new construction will be five to six months from an agreement and notice to proceed. These buyers need to shop for a long term lock on interest rates as uncertainty takes hold in the mortgage market. The growing disconnect between a 30 year old resale home and buying new will continue in 2017 as inflation for goods and transportation costs increase.