Reprint of Alaska Star article
8/11/2009Local real estate market bucks the trend By DARRELL L. BREESE Nationally the economy is languishing in a recession, as foreclosed homes flood the market. And the picture is not much prettier within the state. Moody's Adversity Index, released July 17 tagged Alaska as "in recession" since April. The unemployment rate for Alaska is at 8.5 percent and in Anchorage it is at 7.3 percent. Given all the economic indicators one would assume that the local real estate market is struggling, but that is not the case according to a group of local Realtors. "The local market has remained fairly stable," said Eric Bushnell, "All in all the Chugiak-Eagle River real estate market is balanced and doing better than other parts of the state." Statistics from the Alaska Multiple Listing Service, which records all properties for sale by Realtors in the state, shows there has been little change in the local market since the decline of the nation's economy, especially in the area of median priced homes, between $250,000 and $350,000. "There has been a slight reduction in the number of sales in that price range," Bushnell said. "But the homes are still selling." The key indicator of the vitality of the housing market for Bushnell is the amount of supply. "National experts tell us that a market with a four to six month supply of homes represents a balanced market," he said. "Anything more than that indicates it's a buyers market. A supply less than that means it's a sellers market." The current supply of homes on the market in the Chugiak-Eagle River area is at 4.75 months. Of the 196 homes available in the local market at the end of July, there were offers pending on 21 of them and 38 home sales were completed within the month. By comparison, Parker Colo., a community with a similar population to the Chugiak-Eagle River area, has 900 homes on the market. Comparing the current local numbers to previous years reveals a slight dip in the market, but nothing as drastic as some communities around the state and country are experiencing. In July of 2008 there was a 4.1 month inventory of homes for sale in Chugiak-Eagle River and 53 sales closed; in July 2007, at the high point of the real estate boom, there was a 3.84 month supply of homes and 68 homes sold. "We're not seeing the homes flying off the market like they did a couple years ago," Bushnell said. "But the homes are still selling." The homes priced right and presented in a proper manner to potential homebuyers are still moving fast. One case is a home listed for sale by Cindy Wilson of Re-Max of Eagle River. The home received four offers within the first week on the market. Compared to other parts of the state, the local are especially striking. In the Matanuska-Susitna Borough, there is a 6.5-month inventory of homes; Anchorage has an 8.7-month inventory; and the Kenai Peninsula has a 16-month inventory. In July, Anchorage had more than 1,000 homes on the market and only 67 pending sales. "Having such a balanced market compared to the rest of the state is good for the local homeowner," Bushnell said. "It means homes hold their value, which brings stability to the local market." What is it that makes the local real estate market so appealing? According to Bushnell, it is because of the golden rule in real estate. "Location, location, location," he said. "The Chugiak-Eagle River area is a true bedroom community. But it's also a great place to raise a family and experience Alaska." Both Bushnell and Wilson credited the influx of military families, caused by an increase in troops at Fort Richardson, as one of the keys to the markets overall health. Wilson also pointed to the ever-fluctuating price of gas as a key element to the local housing market. "People who were looking in the Mat-Su Valley three years ago are now looking in Eagle River," she said. "As gas prices go up, more people move closer to where they work - Anchorage." Other key attractors for homebuyers are the community and small-town charm of the area. "People like to live here because they know their neighbors," Bushnell said. "Whether it be from a PTA meeting or a kids hockey team you get a sense of belonging that is difficult to find in Anchorage." Bushnell speculated that if there were an increase in certain amenities locally, such as entertainment outlets and restaurants, the market would be even stronger than it is today. Reach the reporter at darrell.breese.@alaskastar.com.
Alaska Star
This article published in The Alaska Star on Thursday, August 6, 2009.