Technically it is summer.  Summer solstice will be here next week and Father's Day is this weekend.  But, did someone forget to turn on the sunshine?  After a slow cold spring many of us convinced ourselves that sunshine would be just around the corner. 

Maybe the lack of sun is the reason record numbers of buyers have been on our website looking at homes this past week?  It's true there have been double the number of unique visitors on our site this week.  If they are interested in buying a home in the price range above $275,000 they will find a huge selection.  Take a look at the number of homes on in the Palmer Wasilla area that came on the market this week, versus the homes that pended and sold:

 Total Actives   New Actives this week   New Pendings & New Solds this week

       710                      60                               22                   20

When there are more homes being listed for sale than are pending and selling, we are gaining inventory.  This trend needs to change before we will have equilibrium in the market place across all price ranges.  As I have mentioned before the bright spot is under $275,000.  This price range continues to be a normal market with 2-3 months of supply.  Over $275,000 continues to be a challenging market with more homes for sale than there are buyers.  If you have questions about your home, email me at Kristan@KristanCole.com  or call 373-3575.  Kristan

What’s Happening to Our Market You Ask?

Our real estate market is continuing to stabilize, but we still have a ways to go.  The number of foreclosures in March was the highest so far since our market started to decline.  Those foreclosed homes must work there way through the system before our market can completely stabilize.  That being said there are positives to be pointed out about our market.  While the $275,000 - $500,000 price range is still flooded with inventory, under $275,000 the market is “very normal” with only a 2-3 month supply in any given price range.  I don’t like to use averages because it can skew what’s really going on in the market, but I will share a few statistics here that will help us all understand why our market has not stabilized.  The number of new residential listings as compared to 2007 at this same time is up 22% so far this year.  Also compared to 2007 the number of under contract homes or pending home sales is down 21% and the number of sold homes down 23%.  When the number of listings coming on the market is more than the previous year and the pending sales and sold homes are less, it creates an over supply of inventory.  This inventory must be absorbed before the market stabilizes.  On a positive note, the average sales price is across the market is still stable at $220,000 and the average sale to list price remains 98% on average.  The linked chart shows graphically what I am describing here.  On another note, the geographic areas of the market that are suffering the most are Houston and Willow.  The number of pending sales and actual sold sales is way off compared to 2007.  Houston is down 60%.  Ouch.  In the sort term gas prices will continue to hurt the Mat Su market as there will be buyers who choose to buy in Anchorage rather than commute.  In the long run, we have the land for growth and we will continue to be the fastest growing area in the state.   New jobs in the retail and health care continue to increase.  There is a new prison to be built.  And the “big deal” for us and the rest of the state rests on our legislators as they debate whether to approve the Trans Canada Alaska natural gas pipeline plan.  If you have questions about your home or your property, please call me  907-373-3575 or email me Kristan@KristanCole.com  

There is one sign that our market is improving that we can’t miss, and that’s when our phone rings with new customers ready to buy or sell.  But there are other indicators—not including the familiar days on the market, new listings per month, and new contract activity.  Here in Wasilla we sold 34 more homes in April than we did in March; the number of days on the market came down from 126 to 98.  We still have more new listings coming on the market than typical which means in some price ranges we still have an excess supply of inventory. 

 

Bottom line is the market is making progress.  As long as builders continue to curtail their spec building in the $300,000 plus range our market will continue to recover.  As I have said before, sellers are in a pricing war and a beauty contest at the same time.  If you want to sell you have to "be the prettiest" and the "lowest price" as compared to your competition.

 

5 Signs of a Housing Market Pickup

Sign #1:  New Jobs vs. New Housing:  Historically one new home owner is created for every two new jobs, so if job creation continues in Wasilla and builders scale back on production, it’s just a matter of time before the supply and demand equation moves toward equilibrium. 

 

Sign #2:  Fewer Builder Concessions:  Look for new home builders to curtail their offerings of paying buyer closing costs, offering selling bonuses or other concessions they rolled out at the start of the downturn.

 

Sign #3:  Months’ Supply:  We had a 10-18 months supply (depending on the price range) of housing during most of 2007.  Currently in price ranges under $250,000 the supply of homes is 3-4 months.  Over $250,000 the months’ supply is still 7-9 months. 

 

Sign #4 Visitors per Listing:  Look at the visitor trends on web sites.  The more visitors looking at homes on line and the more pages they look at suggest buyers are getting serious. On my web site we typically have 135 unique visitors per day viewing over 1200 pages.  Friday we had 292 unique visitors on the site. 

 

Sign #5 Rising Number of Homes Under Contract (pending sale):  When the number of new listings per month is similar to the number of new contracts, we have equilibrium.  If the number of new listings outpaces new contracts per month, we still have a growing inventory of homes which will equate into greater supply than demand.  We haven’t reached equilibrium in our market in most price ranges yet, but we are moving closer each month. 

 

Will you regret not buying in 2008?  With low interest rates, motivated sellers, and reduced prices, will people look back at 2008 and wonder why they didn't take advantage of an ideal buying situation?  This is the beginning of my 25^th year in real estate.  I had only been selling for 4 years when the market declined to an all time low in 1988 through 1990.  Many of my friends later told me how they regretted not buying when the market was at the bottom.  The trouble then as is the trouble now, none of us knew until after the fact where the bottom was.  What I do know is we have low interest rates, motivated sellers and job growth making this a great time to buy.  Call me anytime with questions, 907-373-3575  Kristan Cole.

April's residential numbers were much better than March.  There were 103 closed sales in April and there were only 69 in March.   The sale to list price ratio for April was 98% and it was 95% in March, and finally the Average Days on Market was 98 and March was 126.  Bottom line is the market is making progress.  As long as builders continue to curtail their spec building in the $300,000 plus range our market will continue to recover.  As I have said before, sellers are in a pricing war and a beauty contest at the same time.  If you want to sell you have to "be the prettiest" and the "lowest price" as compared to your competition.  If you want to know specifics about your home and how to stage it "to sell", email me or call me, it would be our pleasure to help you be successful.

If you haven't entered already, please email me to enter our King Salmon Fishing Trip for two contest.  Drawing for the trip will be on May 20^th. 

Check out our Best Buy Listif you are looking for a home or an investment property.  Interest rates are lower than ever.  It's a great time to buy in 2008.  We regularly post our thoughts about the very best buys in the Valley.  If you would like to see the best buy list from this past week, click here. 

Happy Cinco de Mayo

Blogger Asks Consumers: 'Will You Regret Not Buying?'

With low interest rates, motivated sellers and reduced prices in many parts of the real estate world, will people look back at 2008 and wonder why they didn't take advantage of an ideal buying situation? In 1988 and 1989 there were lots of good deals, but few took advantage of it.  A few years later, many found were kicking themselves in the pants wishing they had. Here is an article that was posted by Kelly Sibilsky with RE/MAX Unlimited Northwest on March 30, 2008.

 

Will 2008 be the year you wish you'd bought real estate?

With lower interest rates and plenty of homes to choose from, now may be the right time for you to purchase real estate. Today's lower interest rates may not be around when prices flatten out, so trying to time the market rarely works to your advantage. Another problem with trying to time the market is that it requires a rising market to know just where the bottom was ... hindsight is always 20-20, isn't it?

In many cases, purchasing a home may be cheaper than renting. In my market area, it is difficult to find a decent rental unit for under $1,300/mth. That's $15,600/year that could have gone towards your own mortgage, instead of paying your landlord's mortgage for him. Your landlord loves you, by the way, because you're making him rich. You are literally buying his property instead of your own. Think about it.

Then there is the distressed (foreclosure) property market. While many of these properties have condition issues and other challenges, in many cases they are priced below market value and offer opportunity for those willing to put in a little sweat equity to make a profit. If you are considering purchasing a distressed property, I suggest you consult a real estate agent who specialized in the foreclosure market to assist you. It can be tricky to navigate.

All investments carry some level of risk, and purchasing real estate is certainly no exception. This is not the time to make decisions that have not been carefully analyzed. What is a good purchase for an investor may not be a good purchase for a typical homebuyer. This is why you should always work with a real estate agent who can guide you in the right direction and provide the information you need to make an educated decision based on your individual circumstances.

Many people wish to wait "until next year, when prices may be lower" which of course, is a risk in and of itself. Prices may be lower, or may be higher. How many times have you waited for that special sweater at your favorite store to be marked down, only to discover that it was snapped up by someone else before you had the chance to purchase it? It may be a simple analogy, but the principle is the same: sometimes you snooze, you lose. If that's okay with you, then go ahead and wait it out. Hopefully you won't want to kick yourself a year from now.

The truth is, none of the experts can accurately predict the real estate market any better than the experts can accurately predict the stock market or what gas prices will be a year from now. If you purchased real estate in 2006 or 2007, you most likely got a great home at a terrific price with a low interest rate. Provided you stay in your home for several years (something I always recommend), you will benefit when property values eventually rise again.

I actually purchased my own home when the market was so hot that homes were selling in just days and for full list price. My home is now worth about $100,000 more than it was when I purchased it. Had I purchased a few years earlier, my home may be worth $25,000 more than that. Had I purchased just two years ago, my home may be worth about what I paid for it. That's the nature of real estate. Values go up, values go down, and when you purchase and sell makes all the difference.

For the typical homeowner, purchasing real estate should be a long term investment as well as a good little tax deduction, a place to live and make memories that will last a lifetime. Would I be comfortable selling my home in today's market and purchasing a new home? You bet your booties. In fact, I wish I could do just that, because I feel this market offers tremendous opportunities. The problem is, it's not the right time for me to do so because my youngest son has three more years of high school. If the market values are higher in three years, I will make more money on the sale of my home. Of course, I will also be paying more money for my new home. Therefore, I will not have gained anything by waiting and may actually lose money because of the higher purchase price on my new home and potentially higher interest rates. But that's life, folks. Sometimes you need to make decisions based on what is right for you and your family instead of making decisions based solely on the financials. So will 2008 be the year you wish you'd bought real estate?

First Quarter Marketing Report—The Good, The Bad, The Ugly

 

There is really no way around it.  The first quarter residential home sales were slow.  In the Palmer-Wasilla area the number of homes sales in the first quarter of 2008 as compared to 2007 was down 30 percent and the home sales volume was down 33%.  The total number of active homes for sale is higher than last year during the first quarter.  We currently have 737 homes on the market as compared to 666 last year.  What does all of this mean?  It means most sellers are in a pricing war and a beauty contest at the same time.  

                                    First quarter 2007          First quarter 2008        % change

Number of home sales              299                              209                  -30%   

Average Sales Price                  $229,090                     $221,507         -3%    

Appreciation                                                                 -3%                 -3%    

Average Days on Market          86                                110                   28%   

Change in interest rate               6.25%                          6.00%              -4%    

 

What can you do if you want to sell?  First, have your home STAGED.  First impressions can really make or break a showing.  With more properties on the market to choose from, we advise all of our sellers to make the most out of every showing opportunity.  And this is where staging comes in.  If a home is staged properly, then the seller has a much better chance of selling their home for more money and in less time.  Statistics bear this out.  In fact, one survey found that staged homes sold for almost 7 percent more than homes that were not staged, and sold in half the time! We provide this staging service for free to all of our clients.   Next, make your house SHINE! Everything must be spotless, including floors, walls, drapes and especially windows, and even door bell pads! ELIMINATE ODORS!  Bad odors can kill a showing quicker than anything.  Burn candles, bring in flowers, and display potpourri.  People really notice this, so sellers should take care here!
REMOVE CLUTTER: Remove excess furniture and knickknacks.  Only keep essential furnishings and focus attention on your rooms’ best features.  Personal property can distract from the overall showing experience.  And finally: Use COLOR!  Fresh paint makes a huge difference. Have carpets, countertops and cabinets in the latest styles and colors. Add flowers and upgraded landscaping to improve your home’s curb appeal.  By following these basic steps, a seller can do a lot to maximize their market opportunity and increase the perceived value of their home. If you would like more help with getting your home ready to sell, contact me at Kristan@KristanCole.com or 907-373-3575.

My good friends Dale and Robin Hamitt caught this 80 pound King Salmon a few years ago.  Sign up for our free King Salmon Fishing trip for two by emailing me and maybe you can catch one like this too.

 

The above graph gives you an idea of what happened in the real estate market in 2007 as compared to 2006 when the market was the hottest for sellers.  In 2007, the number of home sales slowed and the number of days on the market increased; those are negative indicators.  The average sales price increased, there were few homes on the market for sale, and interest rates came down; those are positive indicators.  So what’s happening now?  Through February 8^th of 2008 we have sold 14% fewer homes than we did during this same time period in 2007; the average sales price is 4% lower and the number of days on the market has risen by 14%; those are negative indicators. The positive news is that the absorption rate for homes under $275,000 is stable.  We have a 3-4 month supply of homes listed for less than $275,000.  When we have less than a 6 month supply of homes on the market, NAR (National Association of Realtors) defines that as a normal, stable market.  In 2007 we also saw our population increase to over 70,000 and new jobs went up by 1% and that was positive.  Together with low interest rates, I believe our market in 2008 will be similar to that of 2007 even though we seemed to have started out a little slower.  So for those homes priced under $275,000 and in good condition, they will sell with normal marketing time.  Those homes priced over $275,000 are in a pricing war and a beauty contest.  They need to be in the best condition and at the same time have the best price if they expect to sell.  If you want to know specific information about your home, please call or email me.  Kristan