National housing woes slow to hit Fairbanks
Published Wednesday, May 28, 2008
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The Greater Fairbanks Board of Realtors reported Tuesday that one-quarter fewer homes sold around Fairbanks during the first three months of 2008 than the same stretch last year.
Overall, however, home sales — measured by average price and number of homes sold — remain well above average springtime levels seen during the past five years.
Real estate agents this winter said Fairbanks was cooling off from an overheated market but has largely missed a housing slump seen around the United States — the federal Department of Commerce reported Tuesday that nationwide housing construction in April rose slightly but remained far below levels from last spring.
Amy Krier, president of the Realtors board in Fairbanks, echoed that position Tuesday.
“We currently have a 10-month supply of homes on the market,” she said. “(That’s) actually pretty balanced.”
Tuesday’s numbers for Fairbanks show there are more homes on the market right now than in recent years — a 74 percent increase in inventory from early 2006 — and Krier said sellers are less likely to find multiple potential buyers “fighting” for a home when it hits the marketplace.
The average reported selling price for one-bedroom homes rose by more than one-fifth from the first quarter of last year, while the average prices for two- and three-bedroom homes fell.
James Wiedle, an analyst with the Alaska Housing Finance Corp., said rising home utility costs have likely thrown a wrench into the affordability of Fairbanks’ housing market, particularly for homeowners who live on a tight budget.
“When you consider that a lot of people are kind of on the cusp with home mortgage payments, it could push them into a situation where they can’t afford to make their payment,” Wiedle said. The housing corporation is managing an expanded weatherization-and-rebate program to make homes across the state more energy efficient and cheaper to maintain.
The housing corporation reported home foreclosure notices and actual foreclosures rose only slightly in the 17,000-home Fairbanks area last year — from 15 foreclosures to 22 during the first quarters of 2007 and 2008, respectively. More active was the mortgage refinancing market, Wiedle said.
Krier said real estate agents’ discussions with other agents from around the country, at a recent national conference, led them to conclude Fairbanks’ housing market is doing better than more than half the United States. She said she has heard lenders in Fairbanks have tightened loan standards for contractors looking to construct homes on the speculation they will sell, but she also noted interest rates for home buyers remain low.
The average of 154 homes reported sold around Fairbanks from January through March went for $218,407, according to the board. That was a 2 percent drop from last year’s first quarter average sale price but above the average of $204,334 for the first part of 2006. The figure of 154 homes sold fell short of matching a surge seen in the first quarter of last year, when 206 homes were reported sold.
Community Discussion
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How many thousand homes are currently on the market? I think the situation in worse than this article makes it out to be. The news-miner now has a separate section for real estate that is larger than all the other classifieds combined.
When dry cabins go for $60,000-80,000 there is something horrible wrong. Who is supposed to buy all these houses? Unless we are holding our breath for a gasline, things are not as peachy as the Realtors board wants you to think.
Go ahead and panic. Sell off all your stuff for a nickel on the dollar. Pack up and move on. I have buying homes up here for 35 years. Never lost a penny on any of them. Lean times have come and gone before and they will again. Think long term...it helps.
Oh, I don't know. I think it all depends on the house you're selling. Since I'm in the throes of this at the moment (and I hope that "guy" who thought I was desperate and tried to cut my knees out from under me is reading), I can speak to this. Houses in the $200K to $250K range are still gaining at the average 3%/year. It's the houses over about $260K that are seeing the modest losses (around 2%/year). If you have a wicked-cool, energy efficient house, you're in better shape when you go to sell (as I'm finding out). I had my house on the market for 3 weeks in February and got 2 offers. Unfortunately, I accepted the one from the "guy" who was about as honorable as pond scum. :-) The deal fell through, but I'm glad my neighbors don't have to live near him, so it was a win-win all the way around. I've got another offer on the table, so it's not as bad as all that. To listen to talk radio in Fairbanks, you'd think there was a mass exodus from the city/borough. I should mention that we're leaving because I'm caring for both of my parents who are dying of cancer. When they're finally gone (and have gotten all the time with the grandkids that they can get), we'll be back (and buying a wicked-cool, energy efficient house again). :-)
I can't help but look at the photo and remember a couple years ago, when many residents were up-in-arms over denuding the entire area from Shannon Park to Birch Hill. The developer made a public statement which, if I recall, promised a mixture of duplexes and single family homes, and included landscaping.
Two years later, no single family homes, no yards, no trees. There are three rows of uniform duplexes, so close together you couldn't plant a proper tree, let alone keep a midsized dog comfortable.
Hmmm... I feel another letter to the editor coming on...
-RK
I agree Rhonda. Sure doesnt look like they're selling well either since I've seen daily commercials for the last 2 years trying to sell the maybe 40 or so housing units there.
Compare the RE-industry reports to the classifieds and other populist marketing venues such as Craigslist and make your own conclusions as to which way the wind is blowing where you're standing....
http://anchorage.craigslist.org/search/r...
....free/reality
Thank you AK Soul.
Those of you posting negative comments obviously haven't looked too closely at the market around here. Yes there are alot of homes on the market, and yes, some people would call it a "buyer's market" but it all depends on the house you are selling. From price to location to quality. If you have a home in the 200ish range in a good area that is well maintained it is probably going to sell relatively quickly. Now the 400 plus thousand dollar homes usually don't move as fast. An overpriced dump isn't going to sell either. But it's not totally uncommon to see multiple competing offers on a well priced home, even in a market slump.
If you've ever watched HGTV and the local market you would all see that Alaska is way behind when it comes to real estate. Yes, you may see dry cabins selling for 60-80 grand but you also aren't seeing 1 bedroom condos selling for 800 grand to 1 mill. You also aren't seeing the same number of foreclosure rates in Alaska as you do in the states.
Don't be so quick to judge the market by the thickness of the Homes for Sale section of the News Miner. We've got it pretty good here people.
The party is over and people are just mulling around wondering who is going to get stuck with the check. Spring fever is in the air now, wait till late fall, the Strykers leave and fuel oil creeps up to $5/gal. It's going to be a mighty slow winter indeed.
I've noticed Craigslist as well. Looks like they'll be a lot of cheap furniture to burn this coming winter. :-)
Thanks, HAddison :-) We went to Denver yesterday to the airport, and there were houses off the Interstate (I-25) just north of Denver, big houses, probably made of OSB on postage-stamp-sized lots all on top of each other with a huge sign naming the subdivision and how the houses were priced FROM the $800Ks. Urk! Gak! I don't know who's affording those, to be honest. The town we're in now has 127 houses on the market (in a town with a 9,000 population), and I'm watching house prices listed in the newspaper drop $30K at a pop "Price Reduced!" No way I'd buy here. I don't think I'd get out. :-) I MISS FAIRBANKS! :-)
>We've got it pretty good here people.
You're right, we do have it pretty good, compared to outside. I was in Reno this last winter and drove through a HUGE Toll Bros project. With big billboards for each section (low 300's) etc. Each one had a banner stretched over it with (Now from Low $xxx's.) With each one $100k off of what it had been. And there also, had been, people camped out to buy the first one's on the block.
Fairbanks has a different problem, but no less severe. If you had bought a typical 2,500 sq ft. $250k home in the hills five or six years ago it's now 'appreciated' to $320k (or MORE) SO you'd now be paying $400+ / mo. just in property taxes, plus $500-$700 / mo. in fuel oil, and $250 / mo in electricity, and $300 / mo. in gas to commute, etc. That, combined with our stagnating wages, equals A LOT of people in trouble, many just don't know it yet. They only know their credit cards keep going up, that second mortgage is maxed out and they can't refi again. THAT is the party that's over and it's now time to pay the bill....
What MrDerik stated is the truth, for the last 20 years , the United States has been in a false economy. Housing,transportation, and wages always seemed to rebound just enough to give the illusion of getting ahead, but this time around, its not going to work out that way.
Know why? We are getting less and less self sufficient in the United States each and every day,month and year. We will alway need materials and items from out of country, but we are losing the ability to make what we need here.
Guess all my rambling just simply means, even in the real estate market, outsourcing has affected it. Those loans gone bad , guess the money is going overseas to pay our debts?
my parents house in another state was bought for $26K in 1962. They sold in 1993 for $250K. Now that same little bity house is selling for $750K. Ridiculous!!! We are about to sell our little bity house here in Fairbanks, and are not worried because it is a lower priced home (affordable!) and is in a pretty good area. I looked at some of the home prices here in town, and I find that many seem overpriced and/or unaffordable for the average person making an average wage. How do people afford those giant homes?
>How do people afford those giant homes?
The short answer is, they can't, they just don't know it yet. Personal debt levels in our Country have exploded in the last 20 years. We have eaten through our savings (rate) and now spend more than we make each year. The Boomers will get one more slight bump in inheritance receivables but the situation is pretty grim. The best (if you can call it that) way out of debt is through inflation, same with our Gov't who is feverishly working on that as we type.
>we are losing the ability to make what we need here.
That's true, but as the Boomers start to retire, we're going to find that we (as a Country) don't need as much. We currently have a glut of housing, vehicles and just about every consumer good under the sun. We will see the slow contraction of our Economy over the next 10-15 years. Harry S. Dent has absolutely nailed this one based on Demographics. You only have to look to the Japanese in the early '90's to see exactly what is unfolding in our Country. However, most would, unfortunately, point out that Japan had one very big advantage that made their 'generation long recession' alot easier - they had savings going in. All we Americans have is a big fat debt and an enormous 'energy' consumption burden.
The times they are a changin'.
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