Seller Tips for Anchorage

Today, I thought I would update sellers on the Anchorage market conditions and share a few tips for sellers and for those thinking of placing their home on the market.

Market Conditions

* There are fewer homes on the market this year compared to 2008 (about 4.8%).
* Competition is still stiff with over 1,200 single-family homes (new construction and resale) and over 500 townhomes/condos for sale.
* Best selling price range is between $225,000 and $350,000 for single-family homes.
* Best selling price range is between $100,000 and $130,000 for townhomes/condos.
* Average days on market vary according to sales price.

Single-Family Residences:

o Under $180,000 – 120 days
o $180,000 – $200,000 – over 90 days but less than 120 days
o $200,000 to $225,000  – about 25 days on market
o $225,000 to $250,000 – near the 45 day mark
o $275,000 to $300,000 – near the 90 day mark
o $300,000 to $350,000 – about 135 day
o $400,000 to $750,000  – 180 – 210 days or more
o $750,000 and over – 365 days and as long as 2+ years

Townhomes/Condos

o $100,000 to $130,000 – 90 days
o $200,000 and $225,000 – 270 days (due to excess supply)
o $300,000 and over – 365 days and as long as 20 months

Seller Tips

* Price it right.  If you want your property to sell within the average days on market timeline, you must price competitively.
* Price it right.  Homes which are priced at true market value normally sell first.
* Homes which are in good condition and reasonably priced will sell before properties in poorer condition.
* Homes which show well inside and out,and are reasonably priced sell before competing properties in the same price range.
* Multiple offers are still a possiblity when the home is priced well.
* Expect buyers to ask for concessions.
* Be prepared to negotiate on pricing and/or terms when the offer is presented.
* If you are having a good number of showings but no offers, the home is most likely considered overpriced by buyers, who will continue to shop for a better value.
* If your home is not receiving any showings, then something is unappealing to buyers, whether it is price, condition or location.
* You cannot change your location.  You may or may not be able to change the condition.  However, you can definitely change your asking price to attract buyers.
* If your home is not selling, talk to your licensee about what corrections need to be made to draw more attention to your home.
* If you are placing your home on the market, look at the comparative sales in your neighborhood to determine competitive pricing.
* If you do not want to sell your home in a reasonable amount of time, test the market.  However, statistically speaking, testing the market will not only lead to frustration.  But, many times, testing the market will result in a selling price less than if the home had been competitively priced when first placed on the market.
* 95% of buyers begin their property search on the internet.
* Buyers who research properties on the internet are more informed regarding what they want from a home and what they are willing to pay.
* More buyers are researching homes on the internet.  So, open houses are less effective than in past years.

Pauline Hofseth, your Anchorage real estate resource guide

Yikes! Interest Rates are Jumping in Anchorage!

I was looking over my recent blogs and found that not even a month ago I asked “Is it Time for You to Refinance?”. When I posted that blog on May 19th, the interest rate was 4.75%.  So, homeowners who did not refinance at that time may have missed the boat.

Interest rates have been rising rapidly for the past three weeks.  Many states in the lower 48 have already experienced interest rates of 6% and above.  Just yesterday, RealtyTimes.com reported that interest rates were going up and no one was predicting how high they will go.  Bernard Baumohl of the Economic Outlook Group says that interest rates could go as high as 6.5% in the near future.

After a sudden and rapid rise in interest rates, the interest rates will sometimes fall back temporarily.  That must be where we are today because interest rates fell back.  Today’s Anchorage Alaska mortgage interest rate is: 5.625%.

Are interest rates headed back up or will they continue to go down?  It seems even the experts don’t know for sure.  For the past three weeks. all the mortgage alerts have reported that interest rates were going up and IF they fell back, it would only be slightly.  All agree that the days of historically low interest rates (4.5%) are gone, most likely forever.

I am not a mortgage lender nor am I an economist but this is what I would have the Anchorage home buyer remember:

    * Interest rates affect your buying power to purchase a home at the same payment.

• The move from 4.75% to the current 5.625% has diminished what you can buy by about $15,000.

    * Interest rates affect the income required to qualify for the same loan amount.

• The move from 4.75% to the current 5.625% has increased the required income by over $4,000 (gross annual income).

Now is the time to buy:

    * Now is the time to buy to take advantage of the buyer’s market in Anchorage.
    * Now is the time to buy to take advantage of today’s interest rates.
    * Now is the time to buy to take advantage of the first-time home buyer tax credit (escrow must close by Nov 30).

Interest rates were 6.5% a year ago.  For eight years before that, they were at the 7% mark.  Before that, interest rates were 9% and, at times, in the double digits.  Some economic analysts are predicting an inflationary period on the horizon due to the stimulus spending.  If that materializes, not only will interest rates soar, but housing prices will increase as well.

Thinking of buying?  Now is the time.

Pauline Hofseth, your Anchorage real estate specialist

The Purple Heart Trail Opens in Alaska

The Alaskan portion of the Purple Heart Trail will be dedicated in a ceremony this Saturday (June 6, 2009) at 11 a.m.  A ceremony will be held dedicating the portion of the Alaska Highway between Fairbanks and Delta Junction honoring those who have served their country and were awarded the Purple Heart Medal for their sacrifice.  The ceremony will be held at the Delta Junction Visitor’s Center.

Senator Johnny Ellis of Anchorage sponsored a bill to dedicate a portion of the Alaska Highway to the Alaska Legistature.  The bill received a unanimous “yes”vote.  As is fitting, Senator Ellis will be the keynote speaker at the dedication.

The date chosen for the dedication is quite significant, as it marks the 65th anniversary of D-Day.  D-Day, the invasion of France on the Normandy Beach, was the beginning of the end of Word WarII conflict in Europe.  June 6, 1944 saw many a brave serviceman earn a Purple Heart Medal with the sacrificing of their lives and blood.

The Vietnam Motorcycle Club will conduct a Fallen Warrior ceremony at the dedication to honor all those who have defended this country and paid the price with their lives.

The Military Order of the Purple Heart began working in 1992 to establish a nationwide trail as a tribute to the men and women who have served and given their all for our freedom.  Since that time, 45 states have dedicated portions of their highways due to their efforts.  I am very proud that our great State of Alaska is among them.

It is only proper and right that we dedicate a portion of our roadway to honor those who have paved the road to freedom and to keeping this country free with their bloodshed.

Freedom is never “free”!
Pauline Hofseth, your Anchorage real estate expert

D-Day Video

Is it Time for You to Refinance?

In the past two weeks, interest rates began to inch up slightly.  This week, RealtyTimes.com reports that today’s interest rate fell back.  The current interest rate is 4.75% for a 30-year mortgage and 4.5% for a 15-year fixed rate.  That report led to today’s blog.  Depending on your current interest rate, it just may be time for you to consider a refinance.  If your loan’s interest rate is around 6.5%, a refinance is definitely something you should check into.

* A reduction from a 6.5% to the current 4.75% interest rate would result in a savings of over $200 a month.

If that statement made you perk up your virtual ears, then I would like to remind you about the Making Home Affordable Refinance program sponsored as part of the recovery plan.

* You do not have to be in a distressed situation to take advantage of the program.

Anchorage is one of the places in the nation that the Making Home Affordable program can be of real benefit since our housing has not suffered the steep decline in values that other areas in the lower 48 have experienced.  Both Making Home Affordable program and FHA will refinance the loan balance for homeowners who owe more than the property’s current value.

* The Making Home Affordable program will refinance your loan balance if it is no more than 105% of the value of the home.
* FHA will refinance your loan balance if the first mortgage is less than 97% of the homes current value.

If you have equity in your home and pay PMI (Private Mortgage Insurance – insurance lenders require if the home was financed with less than 20% down), the savings could be even greater.

* PMI may no longer be required.

Most homeowners can take advantage of the government refinance loan programs.

* Making Home Affordable Program applies to Fannie Mae and Freddie Mac loans.
* FHA also offers a refinance program.

If you have a first and second mortgage, a refinance could eliminate your second mortgage.

* Make only one mortgage payment and save thousands of dollars in interest.

Check out all your options on the type of refinance which will best meet your circumstances and goals before you make a decision.

* Making Home Affordable Program
* FHA Refinance (even if your current loan is financed through FHA)
* An FHA Streamline (current loan must be FHA loan)
* Conventional refinancing through a mortgage lender

Taking advantage of today’s refinancing opportunities may be a wise decision, but it does depend on your personal circumstance, finances and goals.  I do think it is to the Anchorage homeowner’s advantage to check out the possibility of a refinance.  When considering a refinance you need to look at your long time goals.

* A refinance is not free.  There are fees and points to consider.

According to the various economists and mortgage lenders, interest rates are not expected to decline any lower than 4.5%.  However, they are expected to increase as the housing market improves, loan applications increase and the economy recovers.

Pauline Hofseth, your Anchorage real estate resource

Mystery Donor Selects University of Alaska

Thank you to the mystery donor who has made a donation of $7 million to our University of Alaska Anchorage campus.  The University of Alaska is one of more than 12 colleges to benefit the mystery donor’s generous gifts.  In total, various colleges have received over $80 million dollars.
 
The requirement for receiving the funds is quite simple: “don’t ask and don’t tell.  The donation stipulates that the University must not try to find the mystery donor and, for the few that know, they must never reveal the identity of the mystery person.
 
Approximately $6 million will be set aside for scholarships for University students, particularly for minority races and women, as requested by the mystery donor.  The Seawolf Opportunities Scholarship fund will provide 50 students with full scholarships to the University of Alaska – Anchorage campus.  The scholarships will be awarded to first generation college students in need of financial assistance.  Additional funds will be awarded to qualifying students as an incentive for completing their Associate and Bachelor degrees.
 
Only $1 million dollars of this much appreciated gift will go towards the fall opening of the newly completed Conoco Phillips Integrated Science Building.  There is no doubt that the kindness and generosity of our mystery donor will change lives for generations to come in Anchorage.  It always amazes me when I think of what the power of one person can do to change the world.
 
Whoever you are, wherever you are…I want to express my personal thank you for your kindness and extreme generosity.

Pauline Hofseth, your Anchorage real estate resource guide

Celebrate Earth Day with a Tax Credit

Spring brings thoughts of renewing our homes and gardens.  Spring is also the time we celerate Earth Day.  I was thinking of how Earth Day relates to Anchorage homeowners beyond recycling.  I was also thinking about how green living is becoming increasingly important to the homeowners in terms of the resale value of their homes.  These thoughts reminded me that the Federal government is offering to help homeowners go green while improving their homes with a tax credit.  The American Reinvestment and Recovery Act is providing a tax credit of 30% ($1500 cap) for energy efficient home improvements. 
 
Home Improvement Tax Credit Guidelines:

    *      The home improvements must be in operating condition or in use starting January 1 of this year and no later than December 31, 2010.
    *      The tax credit applies to the homeowner’s prinicipal residence only.
    *      The tax credit applies to all qualifing improvements made, not to each improvement separately.
    *      A Manufacturer Certification Statement is required.  You do not have to submit a copy.  However, you must have a copy on file.
    *      A receipt for the qualifing home improvement must be kept as well.
    *      The tax credit will be applied to 2009 tax filings (Tax Form 5695).
 
Home Improvement Tax Credit Exceptions:

    *      Second homes and rental property are eligible for tax credits when geothermal heat pumps, small wind systems, solar water heaters or solar panels are installed.
    *      The Home improvement Tax Credit is available until 2016 for fuel cells, geothermal heat pumps, small wind systems, solar water heaters or solar panel systems.

Existing Home Qualifying Systems:

    *      Doors and Storm Doors – Not all ENERGY STAR doors will qualify.
    *      Windows, Storm Windows and/or Skylights – Not all ENERGY STAR labeled windows and skylights qualify for tax credit.
    *      Insulation
    *      Metal or Asphalt roofing
    *      Heating and Air systems – List of qualifying products: Consortium for Energy Efficiency product directory
    *      Energy efficient water heaters – ENERGY STAR criteria for water heaters. A ll gas tankless water heaters qualify.
    *      Bio-mass stoves for household heating or water heating
    *      Geothermal Heat Pumps
    *      Small Wind Systems
    *      Solar Systems (water heaters or panels)
    *      Fuel Cells
 
If you are planning to build your own home in the near future, there is a tax credit available to you as well.

    *      The tax credit is a no-cap 30% credit.
    *      The tax credit is available until 2016.
    *      The tax credit is limited to fuel cells, geothermal heat pumps, solar water heaters and small wind systems only.

For further details on how the tax credit works and what systems qualify, be sure to visit the Federal Tax Credits For Energy Efficiency website.
 
There are two benefits to the tax credit program.  The first, of course, is the tax credit benefit you receive on your 2009 tax filing.  The second is that your home improvement will stimulate our local Anchorage economy with the purchases you make.  So, go ahead Anchorage…celebrate Earth Day this year with a tax credit!
 
Pauline Hofseth, Anchorage Real Estate

Anchorage Still Growing

In spite of the economic downturn, Anchorage is still growing.  The University Lake Springhill Suites Marriott Hotel is nearing completion, with a grand opening expected in August.  The Springhill Suites are located in Midtown.  The hotel will not target the normal tourist trade, but will instead look to serve those visiting the UAA and APU campuses, as well those in town for medical reasons. 

The Springhill Suites features 159 rooms, many of which overlook the nearby lake or park and many have a view of the Chugach Mountains.  In addition to the view, the suites include a coffeemaker, a microwave and a refrigerator.  Hotel amenities include a free continental breakfast, a fitness room, a swimming pool and shuttle service to the airport, university and medical district.
 
Anchorage has added several new new high-rise office buildings to its landscape.  Office space is at a premium in Anchorage real estate, so the new additions are much appreciated by local businesses.  The Centerpoint West (eight-stories) is scheduled to open later this year.  Over half of the space is already leased.  The 14-story Augustine Center is scheduled for completion in 2010.
 
Pauline Hofseth, Anchorage Real Estate

Alaska Credit Unions and Banks Are Strong

Happy Saint Paddy’s Day, everyone.  And I am happy to report that Alaska credit unions and banks are strong and healthy.  There seems to be alot of doom and gloom in the national headlines, so I am very happy to report some good news.  A few weeks ago, I wrote in my blog, What to Do if You Are On the Downside, that Alaska’s economy is very healthy compared to the lower 48.  The Anchorage Daily News seems to back me up on this in its recent article regarding Alaska banks and credit union health.
 
The ADN reported that many of Alaska’s credit unions and banks grew in local profits last year and are not in need of TARP funds.  Three Alaska banks which did accept TARP monies were Alaska Pacific Bancshares, Key Bank and Wells Fargo.  However, the banks that received TARP funds did not take the funds because they were in trouble.  The Anchorage Daily News reported that one of the reasons Alaska banks and credit unions fared well was because of their common sense approach to lending – no risky loans.  Although, Alaska and the Municipality of Anchorage has its issues, I think the common sense approach to life mirrors that of Alaskans in general, which has lead to our being one of the best economies in the nation.
 
Pauline Hofseth, Anchorage Real Estate
 
Read the full article:
  HEALTHY ENVIRONMENT: More conservative policies help avoid outside crush

What to Do if You Are On the Downside

Anchorage has one of the best economies in the nation.  The State of  Alaska announced this week that the Alaskan job rate was up both in terms of new jobs and in the jobless rate.  However, no matter how strong the economy may be in Anchorage, Alaska or the nation, if you find yourself on the downside of the economy, you need to take action.
 
Last week, the Obama administration unveiled the Homeowner Affordability and Stability Plan.  The plan is two fold, offering both refinance and loan modification options.  The purpose of the plan is to help homeowners prevent foreclosure.  You do not have to be behind in payments in order to qualify.  HUD’s Hope For Homeowners program was also revised to give more options to homeowners.

If you see yourself on the downside of the economy, please contact your lender immediately.  Here are links that may help you as an Anchorage homeowner:
 
Homeowner Affordability and Stability Plan: FinancialStability.gov (http://financialstability.gov)
HUD Hope For Homeowners: Basic Consumer Facts (http://www.hud.gov/hopeforhomeowners/consumerfactsheet.cfm)
 
Related Article:
Seek Help Fast (ADN)

Anchorage Economy Briefs

Just a brief update on the Anchorage economy.  Anchorage and Alaska are still in a better economic place than most of the lower 48, but no state will escape its repercussions altogether.

    *      The Alaska legislature is currently considering raising the minimum wage from $7.15 per hour to $8.75.  There is also a bill under consideration that would keep Alaska’s minimum wage at least a $1.00 more per hour than what is federally mandated.

    *      The budget shortfall for the State of Alaska is much more than what was reported two months ago.  The estimate now stands at $1.65 billion.  Lower gas and oil prices are the culprits for the increase in the estimated deficit.  Governor Palin has put forward a proposal to tap into the state’s savings account as well as implementing budget cuts.

    *      Acting Mayor Claman has begun his reductions in spending, which is estimated to save Anchorage $7.3 million.  There is an estimated shortfall of $17 million in the city’s budget.

    *      The Assembly has approved $100 million in bonds for Anchorage residents to vote on in the April ballot.  The bonds would affect schools, infrastructure and public safety.

    *      As California, Nevada and Florida have learned, double-digit increases in value may be “heaven” for awhile.  But, it does not take long for those inflationary prices to go south, bringing all kinds of problems along with it.  Slow and steady wins the race.