Real Estate Information Archive

I Love Real Estate

By Eric Bushnell, Associate Broker – REALTOR, C.N.H.S.

Lee Realty, LLC

 Do you like, love, or hate the real estate market?  I love Real Estate!  Not everyone has this opinion, but everyone has an opinion about real estate.  The topic of Real Estate is a great conversation starter no matter where you are.  Consider this:  the American dream is to own a home, and buying a home is most likely the biggest purchase that you will make in your life.  The Real Estate market effects our lives in many ways. During the 2016 election polls showed 73 percent of Americans feel that housing affordability is one of the most important issues facing our nation.  So, it’s obviously going to be part of our conversation.

Real Estate is a popular topic, let me share with you a question I’m asked each week.  “Is now a good time to sell my home?  Maybe???”  Yes, that answer seems ambiguous, until you look at several factors.  Are you moving? Do you want to down size?  Do you need a bigger home?  Would you like to live in a different neighborhood?  Every person has a different reason as to why they need to buy or sell a home.  The worst one is because you have too, and there can be several reasons that you force you to sell, but we will not go into that here.  Your reason to sell, move, downsize, or upsize is a personal reason that is being caused by economic or social factors in your life.  Good advice here is to be sure this is what you need to do.  Is your reason to move based on specific needs, or an impulse?  Impulse decisions can be very expensive.

So whatever your reason is for moving, the next question is -”What will the real estate market be like this next year?” “Is it a good time to sell?”  “Is it a good time to buy?”  I get asked these questions all the time, and here’s a quick answer.  Springtime brings the highest prices of the year.  Mid-summer is when there is the best selection of homes to choose from.  Late summer and fall is when you start to see prices lowering as homeowners try to seller their home before winter, so you may get the largest discount against their original asking price (they may have overpriced the home, thus the big discount). Homes are sold during all twelve months of the year; however a majority are sold between May-August.  The home that is clean and has minimal deferred maintenance typically sells faster than any other home on the market.  People do not want to buy a money pit.  So, clean your home and make it shine like you’re having a dinner party for your companies CEO.  When buying you want the best looking house on the street, curb appeal is very important.

So back to the next question, “What is the Real Estate market going to do in 2017?” That will depend on how people feel about the local economy.  We know that the national economy is getting better, but is our local economy going to follow suit?  Fear can strangle the local real estate market, by slowing people down in making the decision to purchase.  If there’s less buyers looking, then potential sellers may not put their home on the market (in hopes of buying a different home).  The market begins to slow down.  People are motivated by fear of loss or hope for gain.  Now you see why I earlier answered “Maybe, it’s a good time to sell or buy a home”. The Real Estate market is based on everyone’s perception of the future. 

So, here’s my forecast:  The Real Estate market will be good as long as you’re buying or selling for the right reason!

Fall is here, the leaves are turning and at night there is a hint of frost.  When you walk outside you can smell the ripened high bush cranberries.  Fall has arrived in South Central Alaska.

So what does this mean to our local real estate market?  Inventories are actually down from this time last year, with 2670 total homes available in the Anchorage and Mat-Su markets.  In August the was a 25% increase in sales over last year.  This is not surprising since the First Time tax credit ended last June.  Many of the early year sales would have happened later.  Overall this year there has been a good number of sales each month.  The Mat-Su Market has done about the same as last year, and Anchorage is seen less sales.  The Eagle River market has remained the bright spot in the Anchorage bowl.

What is happening to the prices of Eagle River Homes?

This is the time of year we see some of the bigger discounts on homes as sellers try to sell before winter.  The fall market in Eagle River has traditionally been very good.  There seem to be many buyers in the market and with interest rate on government loans so low (3.75% on a 30 year VA loan), we are seeing many buyers in our market.  There is some uncertainty; and how can there not be when you here the national media crying wolf everyday.

A recent poll on the economy reflected that 75% of Americans were not satisfied with what our lawmakers were doing and felt we were on shaky footing.  But when asked how they were doing 75% indicated that they were stable and dong well.  We know that right no some people are having a rough go of it, but for the most part people seem to be doing fine.  Home ownership may not be the huge wealth building tool it was for many years; however it is an asset worth owning.

For a more detail view of our local economy feel free to call me at 907-360-7471. 

Is now the time to buy a home? 

Can you afford it? 

What are interest rates going to do? 

Should I? 

What if it's not my perfect home?

These are questions we all ask ourselves, and I am here to say that there is no easy answer.  But there can be peace of mind in making a decision and moving in one direction or another. 

Uncertainty causes stress.  Stress causes health problems.  Stay away from the stress.

My father gave me very good advice when I was younger.  I was looking at two career paths and did not know which one would be the better one.  He told me to pick one, and don't look back, go for it.  I did and for the next ten years I excelled at my career.  That move eventually launched me into my present career.

This is a simple lessen, and we've all heard a version of it from someone.  It doesn't make it any easier to make a decision, but here is something that might. 

Change in Interest vs. Reduced Sales Price

Purchase Price  $200,000

Interest  Rate  5%                          Term  30 years                              Payment  $1,073.64

  ½% Increase in Rate  $1,135.58

  5% Increase in Price  $1,127.33

A ½% change in interest rates is approximately equal to 5% change in price  

  1% Increase in Rate  $1,199.10

  10% Increase in Price  $1,181.01

A 1% change in interest rates is approximately equal to 10% change in price 

The National Association of Realtors anticipates that Interest rates will be gin to rise in 2010 and that by the end of the year they will be approximately 5.8%. Compared to day's rate that is an increase of 1% or you will end up paying 10% more for your home. 

I think that says it all.

We have seen several pending sales in recent days.  This means agreed contracts.  Our inventory levels are dropping as is expected this time of year.  The good news is that there are less homes on the market now then at this time in each of the two previous years.

The selection for buyers is still good, but it is dwindling.  Interest rate dropped to 5% this week.  This means that the buyer can get a better payment than last month, or they can buy a little more home.  Interest rates have dropped over 20% since earlier this year.

The weather may be cold out there but the market is warm in Eagle River, Alaska.

Call me today for more information.

Eric Bushnell- 907-360-7471