The statistics on this page are for Palmer and Wasilla. They are from the Alaska MLS system which does not include all real estate that has been sold. It is, however, a good indication of condition of the market. I am only using the Wasilla and Palmer statistics which includes everything in between the two cities. This still includes the vast majority of the real estate transactions in the area.
As you can see from the chart below, there has been very little change in average price since 2007. This comes as a surprise to someone who bought their home 5 years ago and wants to sell today. For the average homeowner, this means that unless they had a large down-payment when they purchased their home, they may just break even on the sale of their house today after they pay closing costs and commissions. Some people have to pay to sell their home.
That is for the average home. Of course, everyone in Wasilla and Palmer is above average…remember Lake Wobegon? Seriously though, some people will make money and some will lose money but the average homeowner will just about break even.
We had almost a 20% drop in volume of sales between 2007 and 2008, but there has been very little change since. This is an amazingly flat market. It’s better than a falling market so I’ll take it!
Now let’s take a quick look at the future.
People are always asking me what real estate prices are going to do in the next few years. I usually say, “I have no idea!” But here are two factors that affect the market.
The first is oil production. No matter how you slice it, Alaska is driven by oil. We want to change that, and perhaps we slowly are diversifying a bit, but we are still primarily an oil economy. The trend looks bad. We hope to turn it around with new technology to pull oil out of areas where it has been previously unrecoverable. So far, it’s still a hope. Next summer should give us a good indication of what will be happening here. Shell’s recent fiasco with it’s drilling rig off Kodiak is not a good harbinger. Bottom line: if oil production increases, demand for real estate will increase which will drive prices up.
Second are interest rates. I don’t see how they can move down much further than they already are. They are in the 3% area right now. With 3% interest rates the lenders are working long hours to get everyone refinanced. I talked to Brian Scoresby at Well Fargo in Wasilla, he said that if your loan officer doesn’t call you back give them another call. All of them are over-worked right now.
Rates bumped up slightly in the last week. It’s difficult to say if they will upward, but if interest rates raise significantly you will see a drop in demand and value of real estate. Higher interest rates mean higher monthly payments for a house. That means fewer people can qualify for a house of any set value. Bottom line: higher interest rates will drive prices down.
So it’s up to you, will prices go up or down?
In the mean time, people need a roof over their heads, and that’s my job. I work hard for my clients to find them a home that meets their needs and price range. Give me a call or send an email.
We will find what you need!
This representation is based in whole or in part on data supplied by, and to, the subscribers of Alaska Multiple Listing Service, Inc. (AK MLS, Inc.). AK MLS, Inc. does not guarantee nor is it in any way responsible for its accuracy. Data maintained by AK MLS, Inc. is for its own use and may not reflect all real estate activity in the market.