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Hints for Putting Your Home on the Market

by Connie Yoshimura

    With only 401 active residential units for sale last week, 2014 is sure to bring higher prices in almost all residential categories.  That 401 number includes every type of residential dwelling unit except multi-family.  Single family, attached zeroes, PUD's, and condos--that's all there is for sale in Anchorage, not including Eagle River which dipped to 96 units last week, another low benchmark.  That is the lowest number of homes for sale in my recent or distant memory on any given week. So now might be a good time, after taking down the holiday decorations, to think about putting your home on the market in the new year.

    There are really only five reasons why most people buy or sell homes--a change in their personal life whether due to marriage, birth, death, divorce or job change.  Yes, there are single family investors who regularly buy and sell their personal residence to take advantage of potentially rising home prices but most buyers purchase a home first and foremost as a personal lifestyle choice.  However, when it comes time to sell, there are some basic preparatory steps that can enhance your value that has nothing to do with an appreciating market.

    Most realtors will agree that good housekeeping will add $5,000 to $7,000 in value on an average priced $345,000 Anchorage home.  Good housekeeping means sparkling clean windows, dusted baseboards, no sheetrock nicks and well-scrubbed tile shower and tub.  It also includes well-organized garage shelves, a swept out floor with an unplugged drain, and in today's snowy environment a well-shoveled walk-way and driveway.  Fresh paint, shampooed carpets, well-oiled cabinet doors, replaced burnt out light bulbs, clean wall sconces and you are ready for your first showing.    It sounds simple but it is a lot of work to get your home ready for showings.  Make the beds, clear off the kitchen countertops, put the dishes in the dishwasher, pick up the dirty laundry and throw away old newspapers and magazines, if you still are reading hard copies and maybe even purchase some new lamp shades and a plant or two.  Take all those old clothes at the back of your closet that you haven't worn for three years and give them to Goodwill.  Some non-profits like the ARC will even pick up everything you don't want.

    Take the dog or cat with you when you have a showing instead of leaving them kenneled in the garage.  Garages are becoming increasingly important to homebuyers, particularly those looking over $500,000.  Leave the radio or TV off and turn on all the lights.  Now, comes the hard part for some home sellers. Take down all but one stuffed head.  Not all homebuyers are hunters. Anchorage now has a population of 300,000 and has a wide demographic of homebuyers.  Your job as a home seller is to make your home as attractive as possible to all buyers who may not enjoy your recreational activities as much as you do.   Not all buyers practice the same or any religion and homes that prominently display their religious beliefs make some buyers uncomfortable.  Your goal is to make your home attractive to as many potential buyers as possible.  This basic seller's rule applies to a $200,000 condo or a $1.5 million home.              

    Putting your home on the market creates a lot of mixed emotions.  Some sellers like their home so much after they do all this that they don't want to sell.  Others emotionally move out the day they make the decision to put their home on the market.  But one thing is certain.  You will receive a better offer if you take the time to prepare your home for sale before you put up the sign. 

The Housing Crunch is Here

by Connie Yoshimura

     If you’ve been out looking for a home in the dark Alaskan skies and driving on slippery roads, you know the Alaskan housing crunch has finally come home to roost right smack in the middle of winter.   Last week’s current inventory of all types of residential units was an historic low of 491 units.  According to the cumulative permit activity through October 2013, single family permits are down by 73; duplex permits down from 80 last year to 37 and multi-family units down from 299 to 221.  All this downturn in activity is occurring while overall sales volume is up 19% in Anchorage and the average time on the market has dropped to 46 days.  Heading to the Valley for more choice? Think again. Wasilla/Palmer sales volume has increased even more to 30%.
 

     There is some good housing news and that is sale prices have only increased by 2.27% and only slightly more at 3% in the Valley.  However, what these modest increases do not project is the increasing cost of new construction, both in land values and vertical construction.  It’s going to be hard to find a new home for less than $400,000 next year and for a larger lot on the hillside, think $750,000.  Resale homes offer lower purchase prices but these thirty year old plus homes require remodeling, both functional and cosmetic.  Most remodeling costs are paid for either with cash out of pocket or financed at a higher rate of interest than the first mortgage.  A buyer may be lucky enough to find a pre-owned home which has already been remodeled but it may not be to the specificity of their taste and lifestyle. 
 
     In 2014 you will see a lot more three story condominiums and townhomes to make up for expensive land costs and more three and four plexfamily.   For single family homes under $400,000 the narrow lot and narrow home with a garage front will come back with a vengeance despite the Title 21 rewrite which takes effect next year and will require the narrow home  to be a few feet wider with more windows other bells and whistles and, thus, more expensive.     
 

     Affordability versus aesthetics is a very complex dynamic. The new Title 21 which regulates our local land use took ten years to get approved and its first year of implementation is 2014.  Think back to 2004 and our market was radically different with more inventory and a robust economy.  If shoppers are thinking and buying essentials like towels at Wal-Mart for Christmas what is our city thinking about with new ‘enhanced’ requirements?  Not all shelter needs to be created equally.    Subsidized low income and affordable housing is frequently held up as an example of what ‘attractive’ housing can and should look like but that housing is subsidized with federal, state and local grants and even tax abatement.   Private developers can only dream about exterior flower boxes below windows.   With one or two exceptions who are no longer building homes, I can’t think of any builder or developer who does not want to make his homes more attractive and on a meandering curvilinear street.  However, with an average Anchorage sales price of $345,000 that is a financial impossibility in 2014. 
 

     So buyers are going to be left with a very difficult choice.  Pay nearly $100,000 more for a brand new home built to a mandatory five star energy rating or buy an existing home and face the prospect of out of pocket remodeling and repairs.  And many of those repairs will also have new guidelines and be subject to new Title 21 regulations as well, particularly if a buyer chooses to add square footage to an already existing structure which will require a building permit. 

Defining Luxury

by Connie Yoshimura

     Webster defines luxury as a condition or situation of great comfort, ease, and wealth; something that is expensive and not necessary; something that is helpful or welcome and that is not usually or always available.  For residential real estate, luxury homes are usually defined as the top 10% of a market.  In Anchorage, that would be homes over $750,000 which represent 12% of the active market.  Living in luxury usually includes a bathroom for every bedroom.  Bathrooms and kitchen countertops are solid surfaces (maybe granite, quartz or concrete) and cabinets are more like furniture than utilitarian boxes with doors.  Flooring is hardwood or stone with radiant heat.  Heated driveways and sidewalks are definitely a luxury in Alaska.

    A broader definition of luxury may be an indulgence in something that provides pleasure, satisfaction, or ease.  A kitchen faucet can be a luxury; so can a bathroom tub with feet rather than one that is set in the wall.  Luxury can also be an outstanding view or an expansive home site or, alternatively, carefree condo living where there is no yard maintenance but perhaps an elevator.  A luxury home is one that is well thought out.  It’s not based on size alone but rather the ‘right size’ with appropriate spatial dimensions.  It’s a home that doesn’t feel awkward.  You intuitively recognize the feel of luxury when you walk thru a home.  It’s a home that doesn’t say ‘Why did they do this or what’s that for?’.  It’s a home that provides the warm feel of cashmere and silk.

    True luxury homes have architectural style, such as modern or craftsman, with a consistency and discipline of style details throughout.  They have light with well thought out window placements that maximize southern exposure and views.  They fit nicely into the topography of the home site.   They look like they have always been there, even though the home may be brand new.

    Or maybe luxury is choosing from among several good options such as which home to purchase.  The very fact that a buyer has a choice of loan programs or an expanded price range may be a financial luxury that others cannot afford.  Some buyers have the luxury of a 15% or greater down payment to eliminate the cost of mortgage insurance; others can barely squeak into a home but to those who are renting or sleeping on a friend’s couch, even the $100,000 condo may be a ‘luxury’.  Others in the market place for a new home might say “We can’t afford the luxury of waiting any longer and risk having to pay a higher rate of interest.”

    Adequate food, clothing and shelter are the basic necessities of living.  A fine bar of Scharffenberger chocolate may be a luxury for some while a Mars bar is a luxury to others; the same holds true for the first time condo buyer and the $1 million home buyer.  There is always a home with more luxury as long as there is creativity and money to spend.  I have the luxury of living in Alaska and having a job I love. And for that luxury, I am very grateful this Thanksgiving.                 

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