Wasilla Real Estate News, Valley Market Real Estate

No Real Estate Bubble In Alaska February 27th, 2007

Categories: Market Trends, Wasilla Real Estate News

I attended a presentation at Evangelos Restaurant in Wasilla by Ted Jones titled “Bubblettes and the Economy”. He is the chief economist and senior vice-president of Stewart Title Guarantee Company. 

Here is the gist of my notes, I just wrote down the parts of the talk that interested me so the points do not really string together.

• Investment or speculation.  If you are buying a house with the hopes of making money it is only an investment if the property will pay for itself.  The house should rent for about 1% of it’s market value.  If you are purchasing it with the hopes of making money because of appreciating values you aren’t investing, you are speculating.  Jones says there are two new Latin words for speculators…Californian and Floridian.
• Now is the time for a fixed rate loan.  The interest rate difference between a fixed rate loan and an adjustable rate loan, (an ARM), is extremely small.  Yet, 21% of current mortgages are still ARMs.  He blames some lenders for encouraging ARMs because they make more money on them.  He says many of these are time-bomb loans because they will blow up in a few years and result in a massive increase in foreclosures.
• Interest rates will increase to 7% by the end of the year.  Some economists believe the interest rate will remain at about where it is now…the low 6’s, but Jones thinks the rates will likely be close to 7% by years-end for 30 year fixed rate mortgages.  If you are waiting and watching before you buy think about what that 1% will do.  It will increase the monthy payment for a $200,000 loan by about $130 per month.  Multiply that times 60 months, (five years), and you just payed $7,800 more for your house because you waited to buy.  Of course, he could be wrong.  Interest rates may go down, but no one is betting on that.
• Oil prices have not risen because of greed.  They have risen because of the devaluation of the dollar.  75% of our oil is purchased from overseas.  Most of the dollars we spend for overseas oil is changed into euros which have gained in value compared to the dollar.  So the Saudis and others need to charge more for the oil to maintain the value.
• 79% of home buyers begin their search on the web.  I am convinced that an even higher percentage of Alaskans use the web for real estate.  Yet, Realtors and sellers still spend most of their money on print advertising.  I am moving most of my marketing efforts to the web for this reason.  I noticed long ago that I receive more from online advertising than from print media.
• Land costs are high in Alaska.  Compared to the rest of the US, the cost of land here is high in relation to the total cost of building a house.  The cost of land has risen  much faster than the labor and materials cost to build a home.  That is the reason many builders keep building homes because they need to get some return on the land that they purchased.
• Job growth in the Matanuska Valley is much higher than the national average.  The growth of jobs in Alaska is significantly higher than the national average, and the growth in the Palmer and Wasilla areas is almost twice the national average.  Increasing jobs means an increasing population and the need for more housing.
• We do not have a real estate bubble in Alaska.  Because we did not have the huge increases in real estate prices seen in other parts of the county, we are not seeing a correction.  Real estate prices may not increase like they did in 2005 but because of the continued need for housing, they will not decrease either.  Some areas of the country ARE seeing huge decreases in real estate values…namely parts of California and Florida.  But Ted Jones does not expect to see prices in Alaska to go down.

More on the economy in Alaska and the Mat-Su Valley.

Written by Marty Van Diest 8 Comments »

Wasilla And Palmer Real Estate Statistics for the week of Feb 19-26, 2007 February 26th, 2007

Categories: Monday Market Memo

The following numbers show the statistics for the Matanuska-Susitna Borough from Trapper Creek all the way through Wasilla and Palmer and then out the Glenn Highway as far as Lake Louise.  Of course the bulk of the real estate action takes place in the core areas from Palmer to Big Lake.

You will notice that I am using the average prices rather than the median prices.  I do this because it is difficult to find the median price on Alaska MLS system.  I can find it easily on the Valley MLS.  The median price is the price at which 1/2 of the houses sold above and 1/2 sold below.  That is not the same as the average price because very high priced homes skew the average much higher than the median. 

The median price of the 26 pending sales this week is only $202, 450.  That means that 1/2 of the sales are below that price.  Folks, only 1/4 of the total amount of homes for sale are below that number.  That means that anyone with a house above $202, 450 is part of the 3/4ths of the homes competing for 1/4 of the buyers.

Since I belong to both the Valley Board of Realtors MLS system and also the Anchorage Board of Realtors MLS, I try to compare the numbers each week to make sure they are realistic. 

This week the numbers are a little skewed because the Valley MLS shows only 664 total active listings and the Alaska MLS shows 746.  Normally they are pretty close.  The funny thing is, the Valley MLS shows more pendings, more new listings and more closed sales.  So for the first time, I went with the Alaska MLS total numbers and the Valley MLS on everything else.  There probably is a little bit of play in the system somewhere, but it’s the best I can come up with using the numbers that I have.

Written by Marty Van Diest 1 Comment »

Why Scents May Not Make Cents When Trying To Sell Your Home. February 24th, 2007

Categories: Healthy Homes

A Wasilla Real Estate News reader who works in the Environmental Health Field has contributed the following article.? We look forward to adding ?a “Healthy Home” category on this site soon.

For many home sellers and real estate agents who believe the TV commercials that
claim chemical sprays “sanitize” the air, plug-ins “freshen” the air and Fragrance
emitting devices actually clean the air, well…this may not be music to your ears.

The savvy, health conscious home buyer has added chemical fragrances to their list
of what they don’t want to smell when they are looking to buy a home. These chemical
fragrances are now listed right next to mold, cigarette smoke odor and animal urine
by many home buyers.

Home buyers today are more educated than ever. Even inexperienced first time home
buyers understand that chemical fragrances do not clean the air, they contaminate it
with toxic chemicals and more often than not these chemical fragrances make people
very sick.

Home buyers have kids with asthma and allergies. They, themselves, might suffer from
migraines, respiratory illness, cancer or fragrance sensitivity. Home buyers know
that clean should not have a smell, not of disinfectant or chemical emitted
fragrances .

So, while the location, square footage and price of your home might be perfect for
your would be buyer, the smell of your home just might be the deciding factor on why
an offer was not written up.

What does your house smell like?

Once plug in style fragrance emitting devices are used in a home, the oil /
fragrance permeates the wallboard as well as flooring. Similar goes for the
fragranced dryer sheets in the laundry room. These chemical odors then circulate in
the air vent heating and cooling system and will never come out, no matter what you
do.

With the growing population of people suffering with fragrance sensitivity, Asthma,
respiratory conditions, various cancers and allergies, house hunting can often prove
to be quite a challenge.

If you are seriously in the market to sell your home, increase your odds of getting
top dollar and more offers by discontinuing the use of fragranced products. Open
your windows and let the fresh air in. Clean with non-fragranced products. Your
house will then be marketable to all potential buyers… even those with health
issues.

After all, you do want your home to take a buyers breath away… but not literally

Written by Marty Van Diest 23 Comments »

Who Should Pay For The Appraisal? February 23rd, 2007

Categories: Closing Costs

Closing costs always seem to be a mystery.? Most people say we will just split the closing costs 50/50.? But it?s not that easy! There are certain costs that are traditionally seller?s costs, and certain that are traditionally buyer?s costs.? In?some loan programs it is mandatory that the sellers pick up certain costs. Here are the costs usually paid by the buyer:

• All Loan Fees. These include commitment fees, origination fees, points, credit reports, and lock fees.
• Mortgage insurance.? Or VA funding fees, or rural development fees if required.
• Reserves account.? This is to pay the taxes and insurance as they come due.
• Lenders title insurance.? This is not the Owners Title Insurance paid by the seller
• Home owners insurance
• Inspection fees.? For their home inspection
• Flood review Read the rest of this entry »

  Written by Marty Van Diest 6 Comments »

Hiding From The Wind In Palmer Alaska February 22nd, 2007

Categories: Alaskana, For Buyers, Wasilla Real Estate News

It’s -1 degree this morning in Palmer.  Wasilla is reading -15.  Forecasts today are for winds to 20 mph with gusts to 40.  That Matanuska Wind really magnifies the cold.  Hey, it’s clear and beautiful outside! There is always a bright side.

I don’t mind the wind or the cold until it gets really cold, like -20 or more.  There are some advantages to being built like a walrus.  The cold and wind remind me that we haven’t tamed everything, and that’s a good thing.

Since people often say they like Palmer but don’t like the wind, I thought I would tell you how to live in Palmer and stay out of the wind.  But first let me say that the wind blows in Wasilla too.  If it’s gusting to 60 mph in Palmer, the gusts are probably hitting 40 in Wasilla.  So just because you don’t buy a house in Palmer doesn’t mean you are avoiding the wind.

And, the wind doesn’t blow as much as people imagine.  It’s just that you remember it so well when the roof blows off.  We have serious wind storms only a few times a year.  I’m going to guess 5–8 wind storms that last 3 days or so.  I’m no geophysicist so don’t hold me to that.  I’m just giving my best guess after living here for 35 years. 

OK, where can you get away from the wind.

Read the rest of this entry »

Written by Marty Van Diest 2 Comments »