Here you can keep up to date about the goings on in the real estate industry!

According to Anchorage Home builders we are seeing a reduction in housing inventory as the year draws to a close. Paritly do to the holiday season and partly do to the the the questions over the Arco/ BP merger taking longe then expected to be completed.

All indcation are that the new year will bring positivity market activity in our local real estate market.

Red hot market Low interest rates, population rise, land crush boost home prices By RICHARD RICHTMYER Anchorage Daily News (Published: July 20, 2003) When John and Kate McPherson decided last winter to sell their small three-bedroom house on Logan Street in the Airport Heights neighborhood and buy a bigger one, they weren't sure what kind of interest it would draw. Outside, it looks like lots of the other ranch-style houses. They've fixed it up some over the last eight years -- installed a couple of new windows and doors, added a porch and a walkway out front and a perennial garden in the back. Inside, its 1,100 square-feet are surrounded by walls painted in pastel colors, including purple, orange and red. Kate decorated the place herself, aiming to make it one-of-a-kind. "It's a little on the unusual side," she said. She worried that the house's unconventional decor might limit its appeal to buyers, and they might have trouble getting their asking price of $165,000. The McPhersons, who paid $110,000 for the house in 1995, arrived at that price themselves, without the aid of an appraiser. They determined a price mostly by looking at the selling prices of similar houses in the neighborhood. But the McPhersons' worries were unfounded. Despite its eccentricity, they got their asking price for the house in three days. "It was really exciting, and it was nice to not have to stress about it," she said. PRICE SPIKE Residential real estate values have been on the rise for several years, with a marked spike in the last two, making for a red-hot sellers' market. At the same time, buyers have been grappling with an ever-tightening inventory of available houses that are being snatched up almost as soon as they are listed. The average selling price of a single-family house in Anchorage last year was $221,148, according to Anchorage's Multiple Listing Service, an association that tracks the housing market for licensed real estate agents. That's a 19 percent increase over $186,301 in 2000. Values of houses in the Mat-Su area also have been on the rise, driven higher in part by a spillover effect as rising prices in Anchorage have prompted many to buy Valley houses and commute. The Valley's MLS calculates the average selling price of a single-family house in Mat-Su last year at $150,443. That was 15 percent higher than in 2000. Of course, house values have been on the rise most everywhere, but Anchorage and Mat-Su are beating the national average. In 2002, the average sale price of an existing single-family house in cities nationwide was $158,300, 14 percent more than $139,000 in 2000, according to surveys by the National Association of Realtors. National housing industry experts attribute the increase in values mostly to tumbling mortgage interest rates, which had fallen to 40-year lows. But there have been other forces at work in Anchorage adding to the momentum, especially over the past two years. For one thing, more people have been moving in than moving out. People also are holding on to houses longer than they used to. A dwindling supply of available land to build on in the Anchorage Bowl has been pushing house values higher as well. LOW RATES, MORE BUYERS South Anchorage between DeArmoun Road and Potter Marsh has been particularly hot. MLS estimates the average selling price for a house in that area last year was $377,238. That's a 26.5 percent increase over $298,313 in 2000. The MLS data does not include houses sold by their owners, a practice that some industry experts say is becoming more common in the sellers' market. Houses worth less than $250,000 appear to have been appreciating at a much higher rate than average, about 10 percent to 12 percent a year for the past two or three years, said Anchorage real estate appraiser Fred Ferrara Jr. The proliferation of first-time buyers has made entry-level houses, priced between $130,000 and $180,000, among the most sought after and difficult to find, Ferrara said. "Everything's been selling, but the real hot ticket is the entry-level house," Ferrara said. When the McPhersons placed their Airport Heights house on the market, they priced it right in the heart of this range. Low interest rates are fueling brisk demand for less expensive houses as first-timers take advantage of mortgage rates that give them similar payments to what they pay in monthly rent. Average interest rates for a 30-year fixed-rate mortgage, which last week stood at 5.67 percent, have dropped about two percentage points over the past three years. A 30-year, $155,000 mortgage loan at 5.7 percent interest carries a monthly payment of $900 plus property taxes and insurance. Shari Boyd, an associate broker at Prudential Jack White Real Estate, said many of the first-time buyers her firm is dealing with in Anchorage are former renters who have taken advantage of the falling interest rates. A two percentage point decrease in rates gives house hunters an extra $32,000 of buying power, she said. "That's made it possible for a lot people who were right on the verge of being able to qualify for a home to buy one," Boyd said. With all the first-time buyers jumping in, apartment vacancy rates are rising. A survey conducted by the Alaska Housing Finance Corp. in March found that Anchorage vacancy rates stood at 5.2 percent. At the same time in 2001, the vacancy rate was 4.7 percent. MOVE OVER A shift in Anchorage's population also has played a role in driving house values higher over the past two years. More people have been coming to the city than leaving, a situation state officials say they haven't seen in nearly a decade. Anchorage's population has been steadily growing for the past 10 years, rising to roughly 270,000 last year from 244,000 in 1992. But most of that growth was from children being born, and for most of that time, more people were leaving Anchorage than moving in, said Greg Williams, who tracks population trends for the state Labor Department. But that exodus trend started to reverse in 2001, when Anchorage experienced what Williams called "positive in-migration" of about 300. That means 300 more people moved to the city than moved away. Last year, the gain was much larger, about 2,100. The last time more people moved in to Anchorage than moved out was in 1994, Williams said. And they have to live somewhere. Neal Fried, a state labor economist, said the flagging national economy could be partly responsible for the shift. Because Alaska's economy historically has run countercyclical to the rest of the country -- showing steady, moderate growth while the Lower 48's was flat or declining -- fewer people tend to leave, and more people tend to come during times of economic uncertainty, Fried said. It's a very recent phenomenon, and one Fried said he expects to continue at least through this year. "There obviously are other reasons, but that certainly can add to the pressure of increased housing demand," he said. FEWER HOUSES FOR SALE People in Anchorage also are staying put in their houses longer than they used to. The last U.S. census taken in 2000 showed that 22 percent of Anchorage homeowners said they had lived in their house at least 10 years. That compares with less than 9 percent in 1980. With more people coming, and fewer people selling, house hunters increasingly have found themselves with fewer choices and less time to make a buying decision. As of July 1, the MLS listing showed a total single-family house inventory of 649. Last July, there were 832 houses listed for sale. Nearly 90 percent of the houses listed for sale are priced at more than $180,000, leaving Anchorage newcomers and first-time buyers with few options. "I expected higher prices, but I didn't expect there would be such a shortage of houses that they're getting snapped up so quickly," said Dana Spinney, who moved to Anchorage from Utah in November. Spinney and her husband, Charles, are looking to spend about $170,000 for a two-bedroom house with a decent size yard. But most of the houses she's finding in that price range are "zero lot lines" where one wall rests directly on the lot's boundary line and abuts a wall of the house next to it. "We don't find them particularly attractive," Spinney said. "They seem like glorified condos or apartments." SCARCE LAND A dwindling supply of land is part of the reason there are so many of the zero lot lines being built in Anchorage. It's also played a big part in driving up the values of existing houses, especially those built on large lots. Nearly a quarter of the Anchorage Bowl is reserved for parks and open space, and builders are fast using up the rest of the land. Much of the remaining land also has poor soil, deep peat and other characteristics that have driven up excavation costs, according to Chuck Spinelli, owner of Anchorage's largest home building company, Spinell Homes. Currently, Spinelli said his average cost to build an 1,800-square-foot, three-bedroom house in Anchorage is $204,600. Of that, about $61,500 is the cost to buy and excavate the 6,000-square-foot lot it sits on, or 30 percent of the total. Nine years ago, the same house cost $156,500 to build, while land and excavation costs accounted for 24 percent, or $37,500, Spinelli said. Spinelli said his costs have been rising since 1994, but land and excavation costs have taken a noticeable turn higher in the last few years. And there are no signs of those costs abating. "It's really going to go through the roof in the next two years," Spinelli said. "I'm one of Alaska's biggest home builders, and I don't know where my next single-family subdivision is going to be. That is a bad thing to have happen." Real estate appraisers arrive at their conclusions about a house's value by comparing it with others of similar age, style, amenities and size that recently have sold. Rising land prices for new construction boosts the value of the lots on which existing houses sit and ultimately increases their overall value as well. In Jeffrey Hansen's case, the increase was quite considerable. He recently sold his 2,000-square-foot, four-bedroom house on High View Drive in South Anchorage for $212,000. He bought it eight years ago for $110,000. "It almost doubled in value, and I think it's mostly because of the lack of availability of that kind of house in this town," Hansen said. "It sits on a quarter-acre lot, and you don't find quarter-acre lots too often. All the houses now seem to be crammed together." Daily News reporter Richard Richtmyer can be reached at rrichtmyer@adn.com or 257-4344.

Published: May 9, 2004 Residential real estate development in Anchorage has been booming in recent years as builders scrambled to keep pace with ever-growing demand. A growing population, favorable interest rates and a rush to break ground on new projects while lots are still available have driven the growth, which reached a crescendo last year as the city permitted $338 million worth of new residential building. Developers expect new construction to continue at a brisk pace, and recent indicators suggest that supply may be catching up with demand. Figures compiled by Alaska Multiple Listing Service show that the 2003 year-end inventory of single-family houses in Anchorage was 14 percent higher than in the prior year. You can read the full story online at: http://www.adn.com/business/story/5054178p-4982018c.html

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