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Does your pet hurt your home value?

by Connie Yoshimura

   In 2014 the U.S. will spend an estimated $58.51 billion in pet industry expenditures.  68% of U.S. households own a pet and 12% of pet owners allow their pets to sleep in the same bed with them.  The ‘Disney’ humanization have made animals more than man’s best friends; they are now part of the family, as are my two poodles, Hapa and Peony.

  Needless to say, pets play a significant role when it comes to purchasing and selling residential real estate.   Homes for sale are often rejected by buyers because they don’t have a large, fenced backyard for Fido.  And when it comes to pet odors, sellers appear immune to their beloved pets’ carpet stains while buyers have the ability to sniff out even the faintest of pet odors.  Cat urine is one of the hardest odors to get rid of.  Professional carpet cleaning or even replacement which can cost several thousand dollars is a must.  The expenditure can involve removing the carpet, pad, resealing the floor and then replacing both the carpet and pad.  All of which is still less than the potential negative impact on the pet owner’s home value.  Uncared for pets, left for long hours alone in a home, can do damage amounting to tens of thousands of dollars, including chewing up baseboards and cabinet corners.  And here’s a tip for pet owners with a for sale sign in their front yard:  Take all your pets with you when you leave for a showing.  Kenneling in the garage is not enough.

   Not all communities are pet friendly.  Most subdivision covenants, codes and restrictions limit the number of pets allowed per household to two. Two small dogs and a cat is not an unusual pet family, but would not be allowed in many developments.  People sometimes have unique ways of overcoming these regulations.  I once owned a cat on behalf of a neighbor.  The cat simply liked her family of origin better than me which was my story if anyone asked.  Most homeowner association rules state that dogs shall not be allowed to run freely and shall be chained, fenced or otherwise restrained at all times.  The rules also include that dog runs shall not be visible from the street, lot owners be responsible for removing their pet’s feces from all areas of a planned community, and pets shall not be bred or raised for commercial purposes.  I remember a dog musher in a prominent Anchorage subdivision who kept several dogs on his lot in preparation for an Iditarod run.  However, no one complained.

  Unfortunately, not all pet owners raise their pets to be loving companions.  A vicious dog in a community is a threat to residents.  Unless the executive board of the association has the ability to act and remove the dog, there is a very long process with classifications by Anchorage Animal Control to remove the dog, including having to go to court to have a judge approve the removal.  But, what about the barking dog next door? He’s not vicious, just noisy.  Most associations allow that ‘pets causing or creating a nuisance or unreasonable disturbance or noise, so as to interfere with the rights, comfort or convenience of other Unit Owners’, have the right to remove the dog with three days written notice and hearing from the executive board.

  None of these rules and regulations, however, or even loss of property value, is going to prevent most pet lovers, including me, from snuggling up on the sofa, with my two best friends.

Beignets and Market Trends

by Connie Yoshimura

   If you are reading this on Sunday morning, I am in New Orleans at the National Association of Realtors Convention.  I’ve had my cafe au lait and beignet -- breakfast staples in the Big Easy.  Dr. Lawrence Yun, NAR chief economist, has reaffirmed what we already know and that is all real estate is local.  The Dallas market has remained steady the past few years; Miami is recovering with an influx of foreign buyers and even Des Moines, the capital of Iowa where I grew up and went to college, is one of the top ten growth cities in the next decade.  Who would have thought?

   But, despite our local market trends, Alaska is not immune from the economic influences of the Lower 48.  According to Dr. Yun, interest rates will rise the second quarter of 2015 to 4.5% and continue to increase to 6% within two years.  Despite the low interest rates of the past few years, the U.S. is at a 20-year low for homeownership as millennials struggle with student loan debt and are couched in their parents’ basements.   Many young adults in the 24-34 age group are facing serious obstacles on their path to homeownership as limited job prospects and flat wage growth have impacted their ability to save for a down payment. The new normal is that they’re often marrying later in life. 

   Mel Watt, who is head of the Federal Housing Finance Agency which supervises Fannie Mae and Freddie Mac, predicts that the credit box will open up.  The credit recklessness of the past has swung the other direction and in order for our economy to improve, a more moderate approach to responsible lending will occur for credit-worthy buyers. In the past few years, mortgage originators have relied on refinances for their income.  However, that market no longer exists and mortgage originators will voluntarily need to loosen their credit requirements in order to sustain profitability. This credit loosening will contribute to more opportunities for first-time homebuyers, many of whom are unaware, even in Alaska, that some mortgage loan programs require only a 3% down payment.  

   On a national level, homebuilding is only 50% of normal and that is certainly true in our local  market.  We will be lucky to hit 300 single family permits this year.  But, multi-family production is back to normal nationally and has almost doubled from a year ago locally.  Both locally and nationally, more construction loans should be available as banks are flush with profitability and need to lend.  Unfortunately, 50% of homebuilding is done by small mom and pops which are mostly out of the market, having voluntarily or involuntarily through bankruptcy, given up the trade.

   The good news is the record-high stock market which has created significant wealth for the top ten percent of Americans who are now buying second and third homes in resort communities and luxury single-family primary residences.

   Dr. Yun’s last slide was a cover headline from the British publication, The Economist, “America Has Lost its Oomph.”   But when 75% of young people still believe in homeownership, Alaska and America will most certainly prove that headline wrong.

   Well, that's about it from New Orleans.  Now, back to another beignet

   If you are reading this on Sunday morning, I am in New Orleans at the National Association of Realtors Convention.  I’ve had my cafe au lait and beignet -- breakfast staples in the Big Easy.  Dr. Lawrence Yun, NAR chief economist, has reaffirmed what we already know and that is all real estate is local.  The Dallas market has remained steady the past few years; Miami is recovering with an influx of foreign buyers and even Des Moines, the capital of Iowa where I grew up and went to college, is one of the top ten growth cities in the next decade.  Who would have thought?

   But, despite our local market trends, Alaska is not immune from the economic influences of the Lower 48.  According to Dr. Yun, interest rates will rise the second quarter of 2015 to 4.5% and continue to increase to 6% within two years.  Despite the low interest rates of the past few years, the U.S. is at a 20-year low for homeownership as millennials struggle with student loan debt and are couched in their parents’ basements.   Many young adults in the 24-34 age group are facing serious obstacles on their path to homeownership as limited job prospects and flat wage growth have impacted their ability to save for a down payment. The new normal is that they’re often marrying later in life.    Mel Watt, who is head of the Federal Housing Finance Agency which supervises Fannie Mae and Freddie Mac, predicts that the credit box will open up.  The credit recklessness of the past has swung the other direction and in order for our economy to improve, a more moderate approach to responsible lending will occur for credit-worthy buyers. In the past few years, mortgage originators have relied on refinances for their income.  However, that market no longer exists and mortgage originators will voluntarily need to loosen their credit requirements in order to sustain profitability. This credit loosening will contribute to more opportunities for first-time homebuyers, many of whom are unaware, even in Alaska, that some mortgage loan programs require only a 3% down payment.  

   On a national level, homebuilding is only 50% of normal and that is certainly true in our local  market.  We will be lucky to hit 300 single family permits this year.  But, multi-family production is back to normal nationally and has almost doubled from a year ago locally.  Both locally and nationally, more construction loans should be available as banks are flush with profitability and need to lend.  Unfortunately, 50% of homebuilding is done by small mom and pops which are mostly out of the market, having voluntarily or involuntarily through bankruptcy, given up the trade.

   The good news is the record-high stock market which has created significant wealth for the top ten percent of Americans who are now buying second and third homes in resort communities and luxury single-family primary residences.   Dr. Yun’s last slide was a cover headline from the British publication, The Economist, “America Has Lost its Oomph.”   But when 75% of young people still believe in homeownership, Alaska and America will most certainly prove that headline wrong.   Well, that's about it from New Orleans.  Now, back to another beignet

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Dwell Realty
3230 C Street Suite 100
Anchorage AK 99503
907-646-3600