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Connie Yoshimura

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How’s the market? Find Out When You Take this Quiz!

by Connie Yoshimura

Everywhere I go people ask ‘How’s the market?’  Potential buyers are wondering if mortgage rates are going to go lower.  They also want to know if we’re at the bottom of the market.  My response to that question is ‘You never know when the bottom of the market is until it’s past.’  So take this real estate quiz and draw your own conclusions whether or not now is a good time to buy a home.  

 1.Is September’s condo inventory of 360  units the highest or lowest it’s been since 2016?

2. Is September’s active listings of 578 the highest or lowest since September 2011?

3. What was the average sales price of a single family home in September 2019?  

4. And is this price higher, lower or about the same when compared to 2018?

5. Last month there were 192 single family sales.  How many were there in Sept. 2018? 

6. Sellers who list their home with a broker in MLS can expect a full price offer or what percent list to original price?

7. How many million dollar and above homes are there currently for sale in MLS?

A. 13     B. 23     C. 28     D. More than 28

8. In the last six months, what was the average days on the market before a sale?

A. 154 days      B. 46  days     C. 38 days

9. What area of Anchorage has the highest average sales price?

A. Downtown     B. Abbott/De Armoun     C.  Girdwood       D. De Armoun Road/Potter Marsh

10. And what was the average highest sales price for that area?

A. $469,000    B.  550,441       C. $601,000

11. Lets not forget about Eagle  River.  How many homes above $700,000 have sold in the past 12 months?

A. 7      B. 17    C. 27

12. How many homes between $350,000 and $500,000 have sold in the past 12 months?

A. 53   B. 83   C. 153  D. 253

13. What percentage of millenials will buy a home in the next five years, according to a 2019 survey by the National Association of Home Builders?

A. 34%    B.  44%   C.  54%     D.  64%   E.  74%

14. If the average 6,000 square foot lot with public water/sewer and on a dedicated public street maintained by the MOA costs $140,000, what percentage of the cost is due to regulations relating  zoning, platting, private development design criteria regulations?  This calculation is based on the National Association of Home Builders research.

A. 9%     B. 19%     C. 29%

15.Based upon the answers to the questions, do you believe now is a good time to purchase a home?

ANSWER KEY:1. Lowest   2. Lowest   3. $380,490   4. Lower   5. 193   6. 97%   7. B   8. B   9. D   10. C   11. A   12. D   13. E   14. C   15. Yes!

Use Your PFD to Grab a Low Mortgage Rate and Buy a Home

by Connie Yoshimura

I know it’s tempting to use that PFD to vacation in Hawaii, buy a new TV with all the latest technology or even pay off that F-150 truck with the extended cab but there is no better use for your PFD than to make a real estate investment whether you’re a first time homebuyer or looking for an initial  small rental investment.   Real estate has proven time and time again as the one leveraged opportunity for the working and middle class to create wealth.  Owning a single family home has a greater opportunity to build wealth than even muni bonds with a 4% return.  That return is based on cash invested.  A real estate purchase is generally a leveraged investment with appreciation and depreciation based upon the total purchase price.

This week mortgage rates dropped to historic lows, making a real estate purchase even more attractive.  For veterans wanting to purchase with the triple zero down program, rates dropped to 3%  for a 30 year fixed rate.   This program also allows for sellers to pay some buyer’s closing costs.  The HUD 184 program with only 2.25% down now has an interest rate of 3.25%.  The AHFC Tax Exempt first time home buyer’s program with 5% down has an incredible low rate of 3.375%.  Conventional loans with 3% down have an interest rate of 4%.   All of these programs allow for gift funds and seller to pay a portion or all of buyer’s closing costs.

However, if you’ve been waiting for that perfect home or investment to come on the market, you might want to up your game.  Last week there were 715 active single family homes for sale in Anchorage.  A year ago, there was 792. Just over 50 homes sold last week and a year ago as well. Condo inventory has also fallen with 360 active condos on the market in August compared to 439 in 2018.

So despite all the negative concerns about our state budget cuts, the Anchorage real estate market has remained very stable due to lack of inventory.  Now, this week’s lower interest rates coupled with the state’s distribution of  the PFD, buyers should get off the fence and make a decision.  At least, that’s what I’m going to do.    

Condos Come in All Shapes, Sizes and Price Ranges

by Connie Yoshimura

There are single family condos, duplex condos (where you purchase one side), site condos (which are enveloped in an air space), townhouse style, flats and multi-story, to identify a few.  I recently had an opportunity to show condos to a buyer with a goal of purchasing a home in the $250,000 range and, frankly, I was surprised at the availability and excellent condition of many of the homes we viewed. 

 

Several of the properties had three bedrooms, two baths and a double car garage   Many of them were built in the late 1990’s and can be found in almost all of the MLS districts.   These condos have reverse living.  In other words, they feature two bedrooms, one bath and a double car garage on the first floor with a master and great room on the second floor. The differential in their value is due in part to location, interior amenities (laminate vs. granite or quartz), and how well the association has taken care of the common area grounds.  The more desirable ones are priced in the mid-$230,000 to $240,000 range.  This is slightly above the average August sales price as reported in MLS at $218,000.  These condos have wide appeal from young  families with prepubescent children to boomers and seniors downsizing from larger single family homes.  The condos with the most appeal have an accessible backyard from a slider in one of the first floor bedrooms and a fireplace.  Vaulted ceilings create vertical space and make the great room appear larger.

 

On the other end of the condo spectrum are the luxury condos being built downtown and in South Addition.  In the higher density R3 zone, these multi-story condos have a garage on the first floor, living on the second floor and bedrooms on the third floor.  The most popular ones have rooftop decks and inlet or mountain views.  These luxury condos with quartz countertops, luxury vinyl tile flooring and expansive windows start at $500,000.

 

In the middle of the price spectrum are the duplex condos in popular areas such as WestGate.  There, each duplex condo is built on its own R2A lot with a minimum square footage of 8,000 square feet which allows for fenced backyards as deep as 50 feet.  Ranches and two-story plans begin at $359,000.  These homes function as  single family but with a shared common wall. The most popular plans are ranches and two-story homes with three or four bedrooms and a two-story element.

 

And then there are condos in  buildings with elevators and shared stall garages.  These units are the most expensive on a price per square foot of living space because they generally have shared and higher common expenses for maintenance and security and may be built to commercial building standards, depending on the number of stories.

 

But, whatever the price point or style, the most important consideration when choosing to purchase a condo is to understand the rules of the association  by reading the public offering or resale certificate because you are buying into a defined community with rules and a budget for shared common expenses.  As Anchorage’s limited availability for single  family development continues to decline, more and more home buyers will  turn to condos.  In five years, prices for all of today’s condos will seem like the bottom of the market.

A Stable Market Heading into the Fourth Quarter

by Connie Yoshimura

Despite all the concerns over potential job losses as a result of the state budget cuts and the recent announcement of BP’s sale to Hilcorp, the Anchorage and Eagle River residential markets have yet to demonstrate any negative affect. Pending sales for the past five weeks ending on Sept. 19 increased in Anchorage to 267 when compared to 253 sales in 2018.  In Eagle River, pending sales increased from 46 to 60 in 2019.  Although there is always some fall out (DFT’s) when using pending rather than closed sales, pendings give you a more immediate look into market activity.

Obviously, mortgage rates as low as 3.35%  are helping more entry level buyers move into the market.  But those low rates also have a trickle up affect  enabling  first time homeowners to  sell their entry level condos and move up to single family homes which 74% of all buyers prefer regardless of the lot size.  

Lack of inventory continues to plague the local market.  Over the past month, Anchorage inventory had a total of 531 fewer units for sale than last year.  In Eagle River that drop was just over 100 homes.  These numbers are inclusive  of all price ranges and both  resale and new construction homes, according to MLS statistics.  Not all sales are reported in MLS as some homes are private sales, particularly when there is a lack of inventory.  However, MLS does include FSBOs (for sale by owners).  

So it’s hard to say how the BP sale to Hilcorp is going to affect the market.  Some BP employees will obviously be re-employed by Hilcorp.  Others  own homes on the Kenai or in the Mat-Su. And some commute from the lower 48.  Those BP employees who do live in Anchorage/Eagle River and own their own home will have the opportunity to accept relocation benefits.   Third party relocation companies will not want to keep inventory over the winter and incur the costs for utilities, snow plowing and winterization.  Their goal is always to sell homes at the lowest fair market value because generally their compensation is based on how quickly they sell the home.  So if the range for a home is $500,000 to $535,000 most likely it will be listed in the low $500,000 in order to quickly  move it.  Relocation companies are also not interested in cosmetic renovations but may consider health/safety repairs.

There will be some good opportunities for buyers with these homes, many of which will be in southeast Anchorage.  For example,  one relo home in a southeast subdivision recently sold within a week.  These homes will also have been landscaped and include window coverings—two expensive items when purchasing a new home.   Buyers interested in these homes should pay close attention to the market.  In some instances, the sign will go up before the listing so I would encourage buyers to drive the communities they are interested in.. And use www.alaskarealestate.com rather than zillow or other websites which frequently have a two or three day delay before syndicating into the public domain.  

The bottom line is due to our low inventory these relocation homes will be readily absorbed into the market.  Buyers need to get pre-qualified and be ready to act quickly when one comes on the market.  And not quibble over a few thousand dollars under the asking price.

BP has been an excellent corporate citizen and their employees have made valuable and generous contributions to our community.   From one neighbor to another, we thank you.    

Highlights from the Fall Parade of Homes

by Connie Yoshimura

It was a small tour with only nineteen homes in comparison to other years where there have been as many as thirty entries. That small number is no surprise because Anchorage home builders continue to struggle to find buildable homesites at a reasonable value due to the high cost of land development, particularly when it comes to water/sewer/road extensions which in many communities is shared between the developer and the local government but not in Anchorage. Add looming tariffs, and for builders, higher interest rates on their lines of credit, due to economic risk, plus the high entry fee of $1,000, and so it’s no surprise the Anchorage tour was small this year. 

But despite all that there were some outstanding homes to visit. They were more contemporary with shallow roof lines, expansive floor to almost ceiling windows and larger secondary bedrooms with their own walk-in closets. The open living floor plan is now a constant whether it’s an entry level condo in the $300,000+ range or the million dollar home. Three of the four entries in the million dollar category had panoramic inlet views from almost every room! Well worth their asking price as these builders went all out with custom cabinetry, Bosch appliances, luxury flooring and the wet room in the master bath. Wet room? That’s when you combine the shower and the stand alone tub in the same area, surrounded by luxury tile and a floor to ceiling glass enclosure.     

Years ago when I was building my first home, my architect told me that in Alaska you can’t keep guests out of the kitchen so ‘tear down that wall’. Today, the kitchen is still the heart of the home and all other rooms and activities revolve around it. The kitchen remains front and center and may even be visible from the entry.  But now the kitchen question is ‘Are white cabinets still in?’ According to the recently released annual survey from the National association of Home Builders, medium brown is now tied with white cabinetry. It’s not the dark or walnut stained espresso from fifteen years ago but a medium brown. It’s warm, inviting, has a neutral palette and doesn’t take a lot of energy to live with. Almost all of the Parade homes over $600,000 had brown cabinets while white lightens and adds visual space to smaller kitchens in the affordable home category.

‘Grayish’ is still the preferred wall color for most homes although my personal preference remains one of the dozen or more choices for white. Particularly, with our six months of diminishing or lack of sunlight, builders and homeowners doing a remodel can’t go wrong with white walls. 

Highlights from the Fall Parade of Homes

by Connie Yoshimura

It was a small tour with only nineteen homes in comparison to other years where there have been as many as thirty entries. That small number is no surprise because Anchorage home builders continue to struggle to find buildable homesites at a reasonable value due to the high cost of land development, particularly when it comes to water/sewer/road extensions which in many communities is shared between the developer and the local government but not in Anchorage. Add looming tariffs, and for builders, higher interest rates on their lines of credit, due to economic risk, plus the high entry fee of $1,000, and so it’s no surprise the Anchorage tour was small this year. 

But despite all that there were some outstanding homes to visit. They were more contemporary with shallow roof lines, expansive floor to almost ceiling windows and larger secondary bedrooms with their own walk-in closets. The open living floor plan is now a constant whether it’s an entry level condo in the $300,000+ range or the million dollar home. Three of the four entries in the million dollar category had panoramic inlet views from almost every room! Well worth their asking price as these builders went all out with custom cabinetry, Bosch appliances, luxury flooring and the wet room in the master bath. Wet room? That’s when you combine the shower and the stand alone tub in the same area, surrounded by luxury tile and a floor to ceiling glass enclosure.     

Years ago when I was building my first home, my architect told me that in Alaska you can’t keep guests out of the kitchen so ‘tear down that wall’. Today, the kitchen is still the heart of the home and all other rooms and activities revolve around it. The kitchen remains front and center and may even be visible from the entry.  But now the kitchen question is ‘Are white cabinets still in?’ According to the recently released annual survey from the National association of Home Builders, medium brown is now tied with white cabinetry. It’s not the dark or walnut stained espresso from fifteen years ago but a medium brown. It’s warm, inviting, has a neutral palette and doesn’t take a lot of energy to live with. Almost all of the Parade homes over $600,000 had brown cabinets while white lightens and adds visual space to smaller kitchens in the affordable home category.

‘Grayish’ is still the preferred wall color for most homes although my personal preference remains one of the dozen or more choices for white. Particularly, with our six months of diminishing or lack of sunlight, builders and homeowners doing a remodel can’t go wrong with white walls. 

Demographics Dictate Buyer Preferences

by Connie Yoshimura

Did you know seniors are more willing to accept smaller lots?  Younger buyers want more square footage?  And all buyers want a full-sized laundry room!  All this and more is what you can read about in the National Association of Home Builders 2019 housing survey.  Seniors and boomers, having raised their children and barbequed in their backyard, are now pretty much indifferent to lot size.  Over a quarter of boomers and seniors have no minimum lot requirement at all.  In other words, they are ready for townhouse or condo living where all exterior maintenance and lawn care are taken care of for them.  They are part of a ‘lock and leave’ demographic.  They frequently travel to visit grand kids or might even have a second home in the lower 48 to get away from Alaska’s dark winters.


Younger buyers, however, are more interested in lot size.  Thirty-eight per cent of millennials and 37 per cent of Gen X want at least an acre of land.  Although this is a national statistic, it is especially true  in Alaska where having a  piece of the great outdoors is one reason people come to and stay in Alaska.  In Anchorage, that means moving to the hillside where the minimum lot price for an acre is about $130,000.  Then, add well and septic and the cost increases to nearly $200,000. Depending on the size of the home, buyers are now looking at somewhere between $650,000 and $800,000 for a home on that acre plus lot.


These buyers also want more space in their home and garage.  Most likely it’s a triple car garage at least 24 feet in depth to fit that F-150 full bed truck.  There’s also that  extra ‘flex’ room with a yet to be determined use.  It’s just the idea of having more space than in the two bedroom condo or three bedroom townhouse they are currently renting or owning.  The open living concept is  strongly preferred by 49% of these buyers.  Another 37% prefer the kitchen and dining area partially open.  In other words, builders should throw out those plans that  segregate first floor living space.  Today’s buyers could care less about a formal living or dining room.


It’s no surprise that boomers and seniors want single story living.  Here in Alaska over 15% of all sales reported by MLS in 2018 were ranches.  In popular new subdivisions like Huffman Timbers in southeast Anchorage almost a third of the fifty foot wide lots have ranch homes built on them.    


According to the report, basements are more popular in cooler climates and, again, Alaska is no exception.  Almost all new homes in Alaska are built with at least a four foot crawl space rather than the slab on grade that’s popular in warmer climates. The most popular basement is a walk-out followed by a daylight.  A minimum eight foot ceiling height is important and so are lots of windows to maximize livability.


Now, back to that full-size laundry room.  I was surprised to find out that   70% of all home buyers now prefer it on the first floor.  It seems like just ten years ago we moved it upstairs to be near the bedrooms!  I’m going to have to take my own Alaskan survey on that one.

New Mortgage Opportunities for Alaskans

by Connie Yoshimura

First time home buyers account for 31% of all home sales, according to Lawrence Yum, chief economist for the National Association of Realtors. This percentage is down from around 40% of the market from years past.   One reason for this downturn is because  student debt has tripled just over the last decade.   Providing additional frustration is the limited amount of  inventory for new starter homes as builders have focused on more expensive homes.   Despite the fact that interest rates are at near historic 3.35% lows (think back two decades ago when a mortgage rate of 8% seems like a good deal) the needle hasn’t moved up much when it comes to millennials buying their first home.

 

However, help is on the way, at least here in Alaska.  This week Wells Fargo announced a $3.3 million program for Alaskans seeking to buy a new home.   In conjunction with Neighbor Works, which will administer the program and provide education, buyers who qualify with a maximum income of $104,900 for a family of four, are eligible for up to a $10,000 down payment assistance.  Veterans, service members, teachers, law enforcement officers, firefighters and emergency medical technicians, may receive $12,500 in assistance within eligibility requirements.  The only caveat is that  buyers must own and occupy the home for five years in order for the grant to be forgiven.  This program will help 300  Alaskan families purchase a new home and I’m predicting will be quickly absorbed by the end of the year.  Combined with a permanent fund dividend (the amount yet to be determined!) buyers, and particularly millennials, will have an opportunity for home purchase.   

 

Alaska also has a HUD 184 program for Alaska natives which allows them to purchase a home with a down payment as low as 2.25%. The program, which is for all eligible Native Americans, has more flexible borrower qualifications and lower interest rates than conventional rates because the Department of Housing and Urban Development guarantees the loan.   Both of these programs are available through specific lenders so buyers should do their shopping before making any commitment to a mortgage lender.

 

Not eligible for any of these programs?  A recent survey revealed that a third of all first time homebuyers received assistance from a family member.  So forgive and forget all those petty quarrels!  Your lender may actually be sitting next to you at this coming Thanksgiving dinner. 

 

And on a local level, Raven Mortgage, an affiliate of Hultquist Homes, is offering $8,000 in buyer paid closing costs on some of their affordable and finished inventory.  I wouldn’t be surprised if other builders also followed suite during the upcoming Parade of Homes.

 

Combined, these opportunities should help absorb some of the inventory that may be coming on the market as a result of the state’s budget cuts to local programs and schools.  Last week our inventory for single family homes was only 625 so despite all the sunshine and fishing, now may be just the right time to go shopping for a new home.       

How Important is Technology in the Home?

by Connie Yoshimura

Maybe not as important as we are lead to believe with all the gadgets now available from video doorbells to remotely controlled smart refrigerators. A 2018 survey by the National Association of Home Builders ranked security cameras as the most desirable of all technology features, followed by a video doorbell.  I have recently had both installed so I am part of the almost 50% of home owners/buyers who are concerned about security which is a national trend. So its no surprise that three out of the four most desired features are directly related to security.  Can you guess which is the fourth?  It is a feature that helps owners run their homes more efficiently by automatically adjusting  room temperatures, based on the use and time of day.  In other words, a programmable thermostat which 44% of buyers want. Think ‘the nest’ which I  had installed a couple of years ago and am still trying to figure out how to make it work!  That’s about as far as my investment in home technology goes. I do not have a voice activated assistant or a remotely controlled smart oven.  But some tech savvy homeowners/buyers  are also interested in lighting control systems, remotely controlled washer/dryers, even a charging station for their electric car.  But would you be surprised to know that 30% of homeowners have no technology? 

Over the past eleven years, technology features in a new home have gone from zero to almost 50% on the new buyer wish list.    But, you might also  be surprised to know that millennials  are not necessarily the ones for more pushing technology features.  Different generations have different interests in technology.  For example, only 29% of millennials are interested in multi-zone HVAC system, energy management system display and only 34% are interested in lighting control system.  Seniors, on the other end of the generational divide, are more interested in a lighting control system, energy management and here is one that I thought everyone had forgotten about—a central vacuum system. 

One reason why millennials may not be as interested in technology features in their home is affordability.  Seniors expect to pay more for their home and have more financial resources while millennials struggle with student debt and finding or saving funds for the down payment.  It’s not that they don’t want the savvy smart home, it’s that they can’t yet afford it.    

How Important is Technology in the Home?

by Connie Yoshimura

Maybe not as important as we are lead to believe with all the gadgets now available from video doorbells to remotely controlled smart refrigerators. A 2018 survey by the National Association of Home Builders ranked security cameras as the most desirable of all technology features, followed by a video doorbell.  I have recently had both installed so I am part of the almost 50% of home owners/buyers who are concerned about security which is a national trend. So its no surprise that three out of the four most desired features are directly related to security.  Can you guess which is the fourth?  It is a feature that helps owners run their homes more efficiently by automatically adjusting  room temperatures, based on the use and time of day.  In other words, a programmable thermostat which 44% of buyers want. Think ‘the nest’ which I  had installed a couple of years ago and am still trying to figure out how to make it work!  That’s about as far as my investment in home technology goes. I do not have a voice activated assistant or a remotely controlled smart oven.  But some tech savvy homeowners/buyers  are also interested in lighting control systems, remotely controlled washer/dryers, even a charging station for their electric car.  But would you be surprised to know that 30% of homeowners have no technology? 

Over the past eleven years, technology features in a new home have gone from zero to almost 50% on the new buyer wish list.    But, you might also  be surprised to know that millennials  are not necessarily the ones for more pushing technology features.  Different generations have different interests in technology.  For example, only 29% of millennials are interested in multi-zone HVAC system, energy management system display and only 34% are interested in lighting control system.  Seniors, on the other end of the generational divide, are more interested in a lighting control system, energy management and here is one that I thought everyone had forgotten about—a central vacuum system. 

One reason why millennials may not be as interested in technology features in their home is affordability.  Seniors expect to pay more for their home and have more financial resources while millennials struggle with student debt and finding or saving funds for the down payment.  It’s not that they don’t want the savvy smart home, it’s that they can’t yet afford it.    

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Dwell Realty
561 E. 36th Ave., Suite 200
Anchorage AK 99503
907-646-3600