Now that the numbers are in, the following is my analysis of 2013 Anchorage area real estate market activity. The charts and data used in this publication are copyrighted by AK MLS, Inc. No portion may be reproduced, redistributed or retransmitted without the express permission of AK MLS, Inc. Further, AK MLS, Inc. does not warrant the accuracy of the information or data contained herein.
A. Residential Single-Family Homes
History: The Anchorage area real estate market appreciated strongly from 2001 through 2007, during which we saw the average single-family sales price increase 58%. However, from 2007 through 2011 we saw price stagnation in the low to middle price ranges (up to $400,000) and depreciation in the upper ranges (above $500,000). The $400,000 to $500,000 range was a mixed bag. We finally broke through in 2012 with an average single-family home sales price increase of 4.8% from $321,958 in 2011 to $337,306 in 2012. In 2013, it went up another 2.9% to $346,977. The median sales price actually gives a truer picture of market activity. 2010 and 2011 single-family home sales had exactly the same median sales price at $295,000, while in 2012 it jumped 5% to $309,900. In 2013, it went up another 3% to $320,000. Median sales price tells us the price wherein the same number of homes sold above that price as below it. In comparing the minor differences in yearly average sales price to median sales price, it tells us that the majority of single-family homes sold for less than the average sales price and a few ‘million dollar plus’ sales boosted the average sales price. This helps to confirm the fact that Anchorage really made some positive sales and property value progress in 2012-13.
Take a look at the following positive results: 1. Beginning in May, 2012 the number of Anchorage area single-family homes for sale at the end of each month was less than the corresponding month for every previous year, all the way back to 2005. This trend continued through 2013, in eleven out of the twelve months. 2. Average single-family “homes for sale inventory” in 2012 was down 20% from 2011. 2013 continued the trend with another 7% reduction from 2012. 3. The number of single-family homes listed in the MLS that actually sold in 2013 was greater than every year back ’til 2007. 4. The number of homes sold in 2013 was up 15.5% over 2012 and sold 20% faster. Average market time was 48 days.
Conclusion: 2012 was a great year for Anchorage single family home sales. Looking at 2013……for sale inventory was down 7%, the number of homes sold was up 15.5% and average and median sales prices were up 2.9% and 3% respectively. We had another great year!….the second one in a row!
If I were to make a broad statement about the Anchorage area market for single-family homes, I would say the following: Statistics tell us that we saw a shift in 2013 toward more purchases in the higher price ranges up to $750,000. Currently, we have a very good market for single-family homes throughout that range, with less than three months of inventory in all price categories up to $750,000. Above $750,000, it’s still a buyer’s market.
So, the question is: What’s been driving this recent upswing? Bottom line…..it’s increasing consumer confidence, along with the general knowledge that mortgage interest rates are bound to continue rising slowly, but surely over the next year or two. Today’s 30 year mortgage rates are currently in the 4.5% range, up from the incredible 3.375% range at this time last year. With that said, they are still historically very low. When you look at the rate charts below, you get some instant appreciation for current rates. With that said, loans are more difficult to qualify for now than they were just a couple of years ago. If you are a buyer who can get a loan in this market, it’s a great time to be looking and buying.
Finally, finally, finally! After years of merely limping along, Anchorage area condominium sales took off in 2013. 2013 easily exceeded 2012 with the number of sales up nine out of the twelve months. The final number of condominiums sold in 2013 was up 15.5% over 2012. On average, they sold 22% faster as well. Those numbers are almost identical to the local single family home market!
In addition, the average condominium sales price was up 4.2% over 2012, ending the year at $203,215. Sales prices finally jumped out of the $190,000-199,000 range that they’ve been hovering in for the past five years.
Condominium sales vary considerably from complex to complex. Sales success rates are very dependent upon available financing, i.e., is the complex FHA, VA and/or AHFC approved? Is the association well-managed with reasonable dues and adequate reserves for future capital expenditures such as roof replacement? Is the complex in a reasonable location and make for a nice neighborhood? Is it new, newer or old construction? Is it apartment style, attached, detached, covered parking, garage, etc?
What does the future hold for our local real estate market? Well, I’ve already given you a pretty good idea of what I’m going to say here. We have a stable local economy with new major retailers moving into the area, a shortage of buildable land in the Anchorage area, increasing population and rental market vacancy rates in the 3% range. All of these factors make for a real estate market with increasing values over the foreseeable future! This prediction is dependent on mortgage interest rates not rising too quickly. I foresee rates continuing to rise, but at a reasonable pace. Longer term predictions are difficult to make since there are so many factors over which we have no control, but history tells us over the long-term that real estate is one of the best investments you can make. With a consistently growing population, housing in Alaska and the U.S. in general will be in demand. Baby boomers may be downsizing, but younger generations are looking to upsize. Tastes will change, housing will change, etc., etc., but the overall demand will be there. The condition of the Anchorage area and Alaska economies are dependent upon numerous factors, but in general, economic experts view the future with a positive outlook, predicting growth in several areas. The Municipality of Anchorage is a rather diverse market with significant differences in various areas and price ranges. As always, ‘location, condition and price’ have a significant bearing on how quickly a home sells! Not to mention…..make sure you have a good and caring Realtor!