I have been working for awhile trying to come up with some good statistics to show where we are for the summer.  But it has been frustrating trying to find good statistics.

I have been trying to compare this summer beginning on May 1st until today to the same time frame last year.  But I haven’t been able to do that completely. 

The chart above from Alaska MLS purports to do that.  And they are doing it the best they can with the information that they have. 

I have also tried to do it with the Valley MLS system and I came up with completely different numbers…

Here they are:….

AKMLS shows a total of 285 single family residences sold in the core Wasilla area in the summer of 2006 compared to 262 this summer.  That is a decrease of about 8%. 

Valley MLS shows a total of 386 single family residences sold in exactly the same are during exactly the same time frame in 2006 compared to 293 this year.  That is a decrease of almost 25%.

The problem is that the data is very likely skewed.  There are more licensees inputting data in AKMLS this summer compared to last summer which makes the decrease smaller than it really is.  And there are fewer licensees inputting data into the Valley MLS this summer compared to last making that decrease larger than it really is.

 I believe that the accurate number is somewhere between the two and is likely about a 20% decrease in number of units sold this summer compared to last summer. 

I’m going to be meeting with computer whiz Ray Wood of Prudential Vista sometime in the next week to try to get accurate figures.  We’ll see how close my guess of 20% is. 

What we don’t know is if there are real value decreases.  I suspect that there are, but they are hard to show right now.  Values do not seem to have dropped significantly compared to last year but I don’t have hard data to back up that statement.  I discussed this recently with Appraiser Bill Johansen who said that appraisers are not yet showing a negative value adjustment.  We will try to get some numbers on that as well.

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I took an early look at the first half of the year.  Of course the first half isn’t over until June 30 but comparing the first 5 months of this year to the first 5 months of last year gives us a good feel for where we are.

Last year by May 30 we sold 533 single family homes in the Mat-Su Borough.  The average sales price was $221,014 and it took 62 days to sell each home.  Remember, this is for the whole borough, so this includes cabins outside of Skwentna to houses on the shores of Lake Louise and everything in between.  That makes the average sales price less then if we were only looking at homes in the Wasilla and Palmer area.

This year we have sold 476 homes in the same period for an average price of $230,827.   It took 89 days on the average to sell each of those homes.

The average sales price is UP just over 4% which is a long term average for our area.  Many people seem to think that the prices are dropping but that does not seem to be true.  However, they aren’t rising as fast as many wishful sellers hoped.

The total sold is DOWN about 11% over last year. That, combined with the fact that the number of homes for sale is up almost 25% explains why individual home sellers notice that they are not seeing any action on their homes.

Bottom line for sellers, houses are still selling, but houses that are not price right for their location and condition are going to have so much competition that they may hardly get any showings at all. 

Bottom line for buyers, take a good look at the selection before settling on a house.  There are a lot of very nice homes out there, pick through them to find the one that best meets your needs.  If you are looking for a Realtor that will help you find the home you need rather than SELL you a home, give me a call.  907 232–7900

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I attended a presentation at Evangelos Restaurant in Wasilla by Ted Jones titled “Bubblettes and the Economy”. He is the chief economist and senior vice-president of Stewart Title Guarantee Company. 

Here is the gist of my notes, I just wrote down the parts of the talk that interested me so the points do not really string together.

• Investment or speculation.  If you are buying a house with the hopes of making money it is only an investment if the property will pay for itself.  The house should rent for about 1% of it’s market value.  If you are purchasing it with the hopes of making money because of appreciating values you aren’t investing, you are speculating.  Jones says there are two new Latin words for speculators…Californian and Floridian.
• Now is the time for a fixed rate loan.  The interest rate difference between a fixed rate loan and an adjustable rate loan, (an ARM), is extremely small.  Yet, 21% of current mortgages are still ARMs.  He blames some lenders for encouraging ARMs because they make more money on them.  He says many of these are time-bomb loans because they will blow up in a few years and result in a massive increase in foreclosures.
• Interest rates will increase to 7% by the end of the year.  Some economists believe the interest rate will remain at about where it is now…the low 6’s, but Jones thinks the rates will likely be close to 7% by years-end for 30 year fixed rate mortgages.  If you are waiting and watching before you buy think about what that 1% will do.  It will increase the monthy payment for a $200,000 loan by about $130 per month.  Multiply that times 60 months, (five years), and you just payed $7,800 more for your house because you waited to buy.  Of course, he could be wrong.  Interest rates may go down, but no one is betting on that.
• Oil prices have not risen because of greed.  They have risen because of the devaluation of the dollar.  75% of our oil is purchased from overseas.  Most of the dollars we spend for overseas oil is changed into euros which have gained in value compared to the dollar.  So the Saudis and others need to charge more for the oil to maintain the value.
• 79% of home buyers begin their search on the web.  I am convinced that an even higher percentage of Alaskans use the web for real estate.  Yet, Realtors and sellers still spend most of their money on print advertising.  I am moving most of my marketing efforts to the web for this reason.  I noticed long ago that I receive more from online advertising than from print media.
• Land costs are high in Alaska.  Compared to the rest of the US, the cost of land here is high in relation to the total cost of building a house.  The cost of land has risen  much faster than the labor and materials cost to build a home.  That is the reason many builders keep building homes because they need to get some return on the land that they purchased.
• Job growth in the Matanuska Valley is much higher than the national average.  The growth of jobs in Alaska is significantly higher than the national average, and the growth in the Palmer and Wasilla areas is almost twice the national average.  Increasing jobs means an increasing population and the need for more housing.
• We do not have a real estate bubble in Alaska.  Because we did not have the huge increases in real estate prices seen in other parts of the county, we are not seeing a correction.  Real estate prices may not increase like they did in 2005 but because of the continued need for housing, they will not decrease either.  Some areas of the country ARE seeing huge decreases in real estate values…namely parts of California and Florida.  But Ted Jones does not expect to see prices in Alaska to go down.

More on the economy in Alaska and the Mat-Su Valley.

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This report is for the Mat-Su Borough including the Wasilla and Palmer Real Estate areas for the week of February 12 to February 19, 2007.

The statistics are beginning to show our normal spring time rush. 

The graph below is for all the residential realestate on the Multiple Listing Service for the Matanuska Susitna Borough for just this past week.

In every category, the number of listings are up.  There were more new listings, more pending listings and more closed listings this week.  In addition, there are more listings all together. 

The average price of all the listings on the MLS dropped a little this week which  is a response of the market to the need for more lower priced housing.  The increase in home prices has out-paced the increase in incomes so that it is more difficult for lower income people to purchase a home.

Most of the builders I talk to this year are planning to meet the demand for lower priced homes.  They will build the higher end homes when one is specifically ordered but not on speculation.

Contact me for info on new homes coming on the market.  I search the MLS several times a day to see if any of the new listings meet our clients needs.  The good deals, and the special homes sell very quickly.

My cell phone number is 907.232.7900

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I did some research last August to see how many unsold new homes were on the market. At that time there were 254 new homes in the Mat-Su area that at least had a foundation in the ground and were waiting for a buyer.

That was a lot of homes. Just a year before it was very difficult to find a new home for a buyer. They always had to wait for one to be built. It was obvious that the builders had gotten a little ahead of the buyers.

Just yesterday I attended a closing on a new home built by Ron Kuzina. What a fantastic home! The price was $242,000 for a 1,550 square foot ranch on a 1 1/2 acre lot and it had upgrades and quality galore. To find this home, the buyers and I looked at between 25-30, (I lost track), brand new homes in this price range. These homes were all finished or close to finished and most of them were one story ranches. That really drove home the point that there were a lot of new homes on the market. It also really drove home the value of the one the buyers chose. It was obvious when we walked in. That’s the house still under construction in the upper left…click on it to expand.

So, what’s it like today? As of today there are 154 new homes on the market. We have bitten off a 100 home chunk. That’s better, and going into spring I expect we will erase most of the remaining unsold inventory. But it does point out a quandary for builders and home sellers alike. You have to compete with those unsold homes already on the market. I’ve looked at a lot of them and there are some real nice homes for real nice prices on the market.

If a builder does not currently have a model he is competing with all the unsold brand new homes already on the market with “pie in the sky”.  It’s still possible to sell that way, but much more difficult.  Buyers have a hard enough time looking past the bare studs of an unfinished home, let alone one that is only builder’s mind.  It’s really hard to sell a home with only photos and plans.

And home sellers also have to compete with those new homes.  Even though buyers realize they will have to plant a lawn, pave the driveway etc., the allure of a new home is tough competition.  Existing homes need to be priced significantly under the new home market in order to complete. 

Drop me a line for more info.

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It must have been the weather.  The day dawned bright and clear, and it felt warm.  I showed houses in shirt sleeves today. 

The phone rang, and rang, and rang.  By 11:30 AM I had more than 60 calls.  I know this because my cell phone only holds the last 60 phone numbers.  I looked for a number from an early morning call and found it was before the 60th number.   I checked again at 6 PM and the 60th number was at 12:01 from Don Zimmerman from IEC Realty.  Thanks for lunch Don!

So that’s more than 120 calls for the day.  Still have a bunch to return.  I had a 9:30 appointment to take photos of this house.  A 1:00 PM appointment with a builder at which we found out the buyer wants to enter into contract.  An appointment at 3:30 to show a house and 5 acres, and a closing at 5:00 PM. In addition five of my listings were shown by three different agents.  Two of the listings were shown twice. I heard from one agent that we will likely get an offer tomorrow.

We will have to wait for the Monday Morning Market Memo to see if this is the beginning of the spring rush, but it does seem that Feb 1 is the end of winter in real estate.

Give me a call at (907) 232–7900, if I’m on the phone, I’ll call you back.  Or email, that’s easier.

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The information below was provided by Bryan Scoresby at Countrywide in Wasilla

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?Loan Type????????????????????????????????????????????????????????????????? 30 year?????????????? 15 year

Bryan Scoresby
Home Loan Consultant
1981 East Palmer Wasilla Hwy. Ste. 200
Wasilla, AK 99654
(907) 352-4504 direct
(907) 357-5866 fax?????? Email Bryan

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• Neal Fried was in Wasilla today giving a great presentation regarding the Mat-Su economy to the Valley Board of Realtors. Neal is an economist for the State of Alaska. He has a talent for making statistics seem interesting.   He is excited about research.  I was excited about his statistics. All the charts are courtesy of Neal Fried, click on them to enlarge.

Here are some of the highlights:

1. The population in the Matanuska-Susitna Borough continues to grow even though other population areas are shrinking.  The chart to the top left illustrates that.  The valley continues to show healthy growth even though Anchorage actually experienced negative growth.  The state as a whole also saw negative growth as the yellow column shows.
2. Job growth in 2006 was slower, but still healthy.  The four years previous to 2006 showed job growth of over 1,000 new jobs per year but 2006 saw only 646 new jobs.  Fried’s guess is that 2007 will be similar to this year in job growth.
3. Housing affordability has decreased. This has been the case nationwide.  Prices of homes have increased to the point that it now takes 1.9 workers at an average Valley income to afford the average home in the valley.  However, since Anchorage wages are higher it only takes 1.4 Anchorage workers to afford that same home.  That is the reason we have so many Anchorage workers living here.  In fact, 35% of our work force commutes to Anchorage.  In addition, another 10% work elsewhere in the state. 

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It’s not much of a photo, but after lots of tries I actually caught one burst of the modest fireworks displays I observed last night.  It’s a new year…welcomed in today with more snow.  I was up on Lazy Mountain where it looks like they got about twice as much snow as my area near Trunk Road.

In addition to the above snapshot, I thought I’d take a snapshot of the real estate market to see if it can tell us anything.  I took a look at November of 2006 compared to November of 2005 See Market News for more about real estate trends.   This is a comprehensive search of the Valley MLS system which includes data not only in Wasilla and Palmer but from Talkeetna and Trapper Creek to Sheep Mountain. 

November of 2005 showed 265 closed residential sales at a median price of $208,000 which were on the market for 51 days.  November 2006 showed 188 sales at a median price of $216,833 that spent 66 days on the market. 

What does this mean to you?  While we could use a lot more info to get the whole picture, it does seem to show that our red hot market has cooled a little.  Prices are still up but sales are slightly down at the end of the year. However, when we look at the market news for all of 2006 we don’t see much of a drop in sales. 

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In a market with ten months or more of inventory it is extremely important to correctly price your home.  If it is even slightly overpriced it will most likely prevent it from selling.  Remember, ten months worth of inventory doesn’t mean that your home will sell in ten months.  It’s not like we will run out of inventory in ten months so that your home will sell because it is the last one on the market. 

What happens is that homes are always entering and leaving the market.  The homes that are priced to sell move fairly quickly and are replaced by others.  The overpriced houses can sit on the shelf forever without a sale.  In Wasilla and Palmer, (not the whole core area), the median sales price for the 1,005 homes sold in 2006 was $225,000.  The median asking price currently is $259,950.  Any home that is priced $35,000 too high is going to be on the market for a long time.  In fact, if a house with a market value of $225,000 is actually put on the market at that price, it will likely sell in 60 days or less.  However if the same house is marketed at $260,000, it will likely take a year or more to sell it if the owner doesn’t lower the price. 

Five common methods to determine the price.

1. Some people choose the price of their home based on the amount of money they want to walk away with.  To them, it doesn’t matter how much the house is worth, they need a certain amount in their pocket and that is how they determine the price.

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