Wasilla Real Estate News, Monday Morning Market Memo
The Wasilla, Palmer and Mat-Su Valley real estate statistics for July 30–Aug 6, 2007.
I expected more closings this past week because of the normal end of the month flurry and while it was almost twice the previous week it wasn’t really great. It was better than the previous four weeks but the last week of June saw 42 closings.
I expect this market to continue at about this pace until the end of September when we might see a slowdown. It is possible however that October could be helped by larger Permanent Fund Dividends that help families with down payments on homes.
So if you are a seller you have really three months before the real estate market begins its normal seasonal hibernation.
To the right is the same chart I had last week but updated for July’s numbers. Notice that the inventory bar jumped substantially, that’s because it is only calculated on the past 30 day sales compared to the total inventory…so ignore it.
The important thing is the blue line compared to the light green line. The larger the gap between the two, the more of a buyer’s market it is. A smaller gap indicates a seller’s market. Notice that the gap is almost twice what it was in 2005.
Also, notice that the blue line remains pretty steady since 2005, although there is a drop last month that could cause concern if it doesn’t step back up in August.
The national real estate market has been in the news this past week, as has the market in the valley. Most of the news has been focusing on foreclosures. This situation was caused by some real risky loans taken out by people who barely qualified.
I remember a loan officer trying to convince me to push a negative amortization loan with a five year balloon. I asked him to explain it several times in different ways. I just couldn’t believe he expected me to try to talk buyers into a loan that they would have to pay off in five years, and when they did pay it off, they would owe more than when they started. Those are the types of loans that have todays home owners in trouble.
I am often asked to predict the Alaska Real Estate Market. That is almost impossible to do but I will make these few observations. We are almost completely dependent on oil. If oil prices crash or the pipeline shuts down…we’re hurting. But if the oil keeps flowing and prices remain up, we will stay afloat. There are other sources of income for the state, but they are miniscule compared to oil.
That doesn’t mean we won’t see some market fluctuations. I believe we are in one now that will continue until next spring or summer, at least. But I don’t believe we will see a crash like 1985–1989 unless we lose our oil based economy. If we get a gas pipeline, we will probably see another boom.
If you need to buy or sell a house now email me by clicking the contact link to the right or call me at 907 232–7900.