It's easy to think of Anchorage, Alaska as a cool place to live, but local Realtors say the city is on a hot streak with housing sales.

"Anchorage's housing market currently continues as a seller's market with well-kept homes and condos, reasonably priced, selling quickly, many with multiple offers," says Realtor Pauline Hofseth. "The number of homes currently on the market is now increasing as more sellers put their homes on the market, however, an increasing number of buyers are coming into the market. Buyers are generally spending more time researching properties on the Internet before they actually start their home search."

Hofseth explains, "Interest rates rose then leveled and dropped again, but buyers can still afford more expensive homes. Indications show a continual rise in interest rates. As interest rates increase, purchasing power decreases and prices will adjust accordingly. Assuming the same payment, an increase from 5 percent to 6 percent means a $20,000 drop in purchasing ability.

" With the increase in interest rates," she continues, "the upward price movement may level. The hottest sales prices are on properties under $150,000. If they are priced right and in good condition, they only last a couple of days, and most have competing offers. Sellers are able to choose the offer with the highest net to them and offer few if any concessions. The next active grouping is from $150,000 to $300,000, and again, the best one have competing offers. Many buyers are moving to Alaska and job stability continues to strongly drive this market. One challenges in today's market is that some sellers are expecting to net higher amounts than buyers are willing to pay. With many buyers shopping on the Internet before purchasing, buyers have a good handle on what they want and how much it costs. And they are not willing to pay more.

"Still in great demand are existing single family homes or zero-lot line homes selling in the first-time homebuyer's price range," describes Hofseth. "Alaska Housing Finance Corporation has raised its first-time homebuyer limits from $132,592 to $249,750. That means that first-time buyer may obtain the lowest interest loan if they can find a property below that limit. Condos, though still popular have buyers turning back to zero lot lines and searching for other alternatives. The traditional $150,000 single-family home is decreasing in availability. There are about 10 builders who have jumped into the condo market offering numerous possibilities, locations, and price ranges. Buyers need to be careful when purchasing a condo to understand what they are buying and what, if anything, is included in the dues. Some condos are offering "water, sewer, garbage, snow removal, insurance and exterior maintenance." These dues are in the $150 to $200 range. Others, called "site" condos only offer "snow removal." On these condos, the buyer will be responsible for all exterior maintenance in the future." The municipality has tried to slow site condos and enforce greater restrictions, though a good number have already been approved and are under construction. With the land use rules in a state of "change" we don't know what future requirements the city will have, but we do know it will be harder and more expensive for builders and developers to work."

"Ranch style homes (all on one level) are "hot," advises Hofseth. "Be prepared to pay for them though. A small (800 s.f.) in excellent condition could cost up to $200 a square foot. One 1,200 s.f. could cost around $160 a square foot. These would be average type of homes with no special amenities -- new or 20+ years old. New 1,200 s.f. ranches on the south side of town are starting around $200,000. For the upper end buyers, Goldenview, Prominence Point and Turnagain View Estates in Anchorage, as well as several subdivision in Eagle River are doing quite well because of the low interest rates. There is a new subdivision starting on the West end of town near Turnagain for these move-up buyers. Buyers in this price range are demanding quality and amenities over square footage. So sellers with homes over 4,500 s.f. are finding fewer and fewer buyers and are being forced with more concessions."

Agrees Realtor Margaret Billinger, "Anchorage is in a continued seller's market with many homes receiving multiple offers. Average price for a resale home being 225-275K with new construction average being around 350K depending on the area. The average price for a resale condo being 125-150K with new construction being well over 200K depending on location. Currently most of what is available is new construction with higher prices due to the cost of materials and availability of good building lots."

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Published: August 6, 2004

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