Residential Market Absorption Report as of May 5, 2009 for Wasilla and Palmer Markets

Mat Su Valley Market Watch

First Quarter Statistics 2009

The first quarter of 2009 certainly started out slow.  The chart below shows the changes in the market from the first quarter of 2008 as compared with the first quarter of 2009.  The number of homes on the market has increased significantly and the number of sales has declined.  The volume of residential sales is down by 21% and the number of licensees has gone down 11%.

Where is the good news?  So far the sales in the month of April are outpacing last year by 10%.  With the $8000 tax credit available to first time home buyers, low interest rates, and a lot of inventory to choose from we are hoping the recent flurry of activity continues through 2009.  

If you have specific questions about the real estate market, please email me at Kristan@KristanCole.com

See below to find the absorption rate chart for this month’s Wasilla and Palmer markets. I havecompiled this data using the local multiple listing service and documented the data in this easy to read chart.

The definition of absorption rate is the number of weeks it takes to sell the current inventory at the present rate of sales. Absorption rates tell us how many months of supply is on the market based on historical data. For our purposes, we are tracking data over the last 12 months.

Residential Market

* Pendings – no sold.

As most of you know, Enstar has raised the rates on our gas bills almost double in the last 4 years.  I received notice yesterday that MEA is raising their rates 16%.  How do we keep our heating and electric bills down?  Most people purchase window treatments, such as heavy drapes, blinds or shutters to complete the look they want to establish on the inside of their home. But curtains, drapes, blinds and shutters are also a wonderful investment that will help keep energy costs down, whether you are heating or cooling your home. Attic insulation is also one of the best ways a homeowner can reduce the amount of energy they are paying for in their home, whether it is for heating or cooling. Without proper insulation it will escape via the roof. Expect to pay between $500 and $700 to insulate a 2,000-square foot home. According to experts, insulation can save you up to 25% on heating and cooling costs. Don’t forget to seal air leaks in your home. By simply filling in gaps around your windows and doors and sealing ducts, you can save up to 20% on your heating and cooling bill. Last but not least, always replace or clean your air filters. By doing this small task each season you can save 7% in electricity costs per year.  A big savings can also come from reducing your thermostat by 2 degrees. 

I just listed two great new properties.  One is a bank owned REO foreclosure on Neil Circle for $118,500 and the other is a large home almost 2400 sq. ft. located at 3820 N. Fireweed Fields Drive for $229,000.  See the flyers with additional information about these two houses click here  You can also go to our Best Buy List to see our current best buy list.  Happy New Year Kristan

If you are a buyer who qualifies to buy a home in 2009 and receive the $8000 tax credit, there is even better news. You can get the credit on your 2008 tax return even if you haven’t bought the house yet. You can get your taxes done before you actually close on the new and receive their $8,000!  So in essence you can end up using the money for the down payment.

This is an amazing incentive, and should really stimulate the purchase market.  However, if one receives that $8,000 and does not purchase a home this year they will be forced to pay the money back.

Three very important reasons to buy now are:

To start taking advantage of this tax credit and interest rates that are at all time lows, start shopping on our web site by checking out our Best Buy www.BestBuyListMatSu.com list and also sign up to receive our list of Bank Owned and Foreclosure properties www.ForeclosuresInWasilla.com

Happy Monday and enjoy your week, Kristan

There are many indicators that are tell tale signs of whether the market is improving, days on the market, average sales price, sales to list price ratio and housing inventory levels.  Housing inventory levels I believe are a key indicator.  So how do you know whether the housing inventory is normal in your geographic area?  The National Association of Realtors (NAR) indicates that normal inventory levels are 3.6% of the total markets occupied housing units.  In the Palmer Wasilla area of Alaska there are 21,015 single family occupied housing units.  Using NAR’s indicator of 3.6% a normal inventory level in our area would be 756 homes for sale.  As of October 29, 2008 there are 1803 homes on the market for sale.  That means we have a ways to go yet before our market is back to normal.  But as I have indicated before, there are some price ranges within our market that have normal inventories already.  So don’t let the overall number mislead you.  If your home is valued at less than $245,000 there is good news.  Almost all of the price ranges below $245,000 show a very normal housing market.  If you have questions about your home, contact me at Kristan@KristanCole.com or call me at 907-373-3575.

8/14/07 – 8/14/08  Residential Market

The Anchorage Daily News reported last week that property owners on Big Lake are being notified about dock permits.  Evidently permits have always been required, but few property owners have them.  They were either not aware, or disregarded the permit process. 

Big Lake is one of two lakes in the Matanuska-Susitna Borough that the Army Corps of Engineers regulates under an 1899 federal law as a navigable water body, meaning the water is used or could be used to transport foreign or interstate commerce per the Daily News article.

The Corps has indicated they are not out on Big Lake looking for problems or to penalize anyone in as much as they are just trying to get people to obtain a permit and come into compliance.  I also think they are trying to maintain safety (docks coming loose etc.) on Big Lake.  As we all know, there have been several accidents on Big Lake in the past few years. 

For the private landowner, new dock permits cost $10 and require a public notice period. New commercial permits cost $100.   Work on existing, permitted docks is generally free, as long as it stays within a certain size.

Well just when you thought you were up to date on land use requirements, you find out there's always more to know.  Kristan

Winners of the 8 adult passes to the Alaska State Fair are:  Bill and Barb Penyak 2 tickets, Chris and Laurie Miller 2 tickets, Al and Barbara Nault 2 tickets, and Rose Frey 2 tickets.  Please stop by our office anytime after Monday to pick up your tickets!  The fair starts on Thursday.  I competed in 4-H as a young teenager and actually won the showmanship class with my horse, Jules.  To earn money that summer, my brother and I worked at the fair grounds and cleaned all of the horse stalls; that was work.  I was thrilled to also compete in horse racing that summer and won my first race at 13.  Lots of fond memories for sure, what are yours?  Horse racing is no longer a venue at the fair, but there is always something for everyone.  This year the entertainment starts off with Sean Kingston (which my adult kids can’t wait to see), lots of competitions, and or course the phenomenal food.  I can’t wait to go and eat.  Yum Yum

Don’t forget to enter our next FREE drawing for 20,000 Alaska Airline Miles.  Email Kristan@KristanCole.com to win.  Drawing will be October 15. 

Keep checking our Best Buy List http://www.kristancole.com/best_buy if you are looking for a home.  There are some incredible buys out there that you won’t want to miss.  There’s no sense driving around to look at homes with current gas prices.  You can see every listing in Alaska on my web site; www.KristanCole.com.  Two of our sellers had multiple offers this week which speaks volumes about our best buys.  Bottom line, if you are looking for a home don’t buy without first checking out our best buy list.

One of our clients wrote me a very kind note this week and gave me permission to share it with you.  He said when our team took over the sale of his property; he had peace and could get on with things.  I worked some really long hours this week and when I got this note, wow did it make it all worth it.  Great opportunities to help others seldom come, but small ones surround us every day.  We all have the chance to speak a kind word to someone.  Go make someone’s day.   Kristan 

Alaska Housing released a press statement August 4th about Alaska Home Buyers Confidence.  They stated Alaska home buyers remain confident in the housing market despite national decrease in consumer confidence.  A June 2008 study conducted by Dittman Research and Communications Corporation revealed that 59 percent of Alaskans have a great deal of confidence or quite a lot of confidence in the strength of the Alaska housing market.  This compares to the Conference Board's national consumer confidence index released in June, which fell to 50.4, the lowest reading since February 1992.  Most Alaskan's cite Alaska's strong economy and the fact that housing is a good investment as explanation for their confidence.  Low interest rates and a low number of homes on the market also positively impact this confidence factor.  Alaska Housing Finance Corporation's CEO/Executive Director Fauske explains, "housing and energy issues are of critical importance to all Alaskans.  These survey results are an indicator of the marketplace and send a positive message that despite national trends, Alaska's housing market remains steady." 

Here in the Palmer/Wasilla area our inventory of homes is higher than last year so we still have a ways to go before our residential market totally recovers, but it's steady as she goes right now.  Call me if you want to discuss the specifics of your home.  Kristan

Is the national housing crisis really a crisis? Dennis Kneale recently addressed the issue on CNBC.His message took on a positive spin regarding the real estate market. He demonstrated in the video that the housing crisis is really only a crisis at a micro level.  Here in Alaska we are fortunate; our current foreclosure rate is less than 1%.  We haven't been hit hard at all, but then we took our hits in the late 1980's.  Our future economic growth looks positive.  Tourism, oil revenues, a new prison, growth in the military, low interest rates, more retail store growth and job growth for starters.  While job growth slowed in 2007, it's still growing and I expect our employment growth rate to be between 2-3% this year.  This should help our struggling real estate market recover more quickly.  So while we haven't seen much sun this summer in Alaska, I think I am starting to see at least partly sunny skies in the future of our residential real estate market, and that's good news for everyone. Check out our Best Buy List if you are looking for a home or an investment property.  There's no sense driving around to look at property with gas prices over $4.41 per gallon.  You can see every listing in Alaska on my web site.  Interest rates are lower than ever----It's a great time to buy in 2008. Kristan

Positive News

H.R. 3221, the Housing and Economic Recovery Act of 2008 — which was passed by the Congress on July 26 and then signed by President Bush — allows first-time home buyers to take a $7,500 tax credit from the purchase of a single-family home, townhome or condominium.  This is great news for home buyers, but also great news for home sellers as this will excite and hopefully generate more buying!  If you have questions about this new tax credit, please email me at Kristan@KristanCole.com

Friday the Alaska Senate voted to award TransCanada a license to build the natural gas pipeline.  The legislation now moves on to Governor Palin for her signature.  This should boost confidence here in Alaska regarding our economic outlook. 

Did you purchase a newly build home with a 5 star energy rating on or after April 5, 2008?  If so, Alaska Housing has a $7500 REBATE application.  Call Alaska Housing at 1-800-478-2432 and ask for the rebate Program manager or call the Rebate Manager direct at 330-8183, or go online at www.ahfc.state.ak.us/energy  

You don’t want to miss out on this. 

Wow, What a Market!

The first half of 2008 has come and gone.  So what’s really happening in the real estate market?  I reviewed all of the residential real estate market information for 2008 and compared it to 2007 for the same time period.  Below is a graph that illustrates the differences between the market then and the market now.  Frankly speaking, when the number of homes on the market for sale has increased, the number of home sales has decreased, and in addition, the time that it takes to sell a home is increasing, you know we are not through this thing yet.  So where is the light at the end of the tunnel? 

We have a very normal market for homes that are priced under $275,000.  A normal market is where the number of months of supply for a given price ranges is less than 6 months.  Meaning if there is a 6 months supply of homes in a particular price range, based on current sales it would take 6 months to sell all of the homes in that price range.  Homes priced under $275,000 are selling and we are still experiencing multiple offers on occasion.  Conversely, we still have a lot of inventory for homes priced between $275,000 to $350,000.  That’s where the congestion is.  As I have said before, in that price range, sellers are in a pricing war and a beauty contest at the same time.  Sellers need their homes to be in the best condition and at the same time have the best price if they expect to sell.  Cleanliness is number one.  Nothing is more important; it must be clean and smell clean.  I also recommend sellers have their home staged by a professional.  You only get one chance to impress the buyer, make sure your home is presented in the best light.

The exceptional market we experienced in 2005 has come and gone; today’s market is  a tough one.  And if you’re reading this, you know that as many as 90% of today’s buyers and sellers start their real estate search online.  This is even truer today with the price of gas at $4.50 a gallon. That means that just having your home on a website isn’t enough anymore, you need an integrated online system to attract, cultivate and help these “online shoppers” make purchasing decisions.  Think of it as selling your home before selling your home.  As real estate professionals we are really selling the house to the consumer on line before we physically even show the home.  To attract buyers, having an integrated online system with ALL of the MLS listings, multiple photos, virtual tours, online mapping software, specific neighborhood information with photos, is simply the minimum expectation of today’s buyer.

If you need to sell your home this year, make sure you find a professional to help you.  Approach selling your home in the same manner you would if you were looking for a doctor to perform surgery on you or a family member; do some research and pursue the best expert in the field who can demonstrate great outcomes and great results! 

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.