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What Is the Square Footage of Your Home?

by Connie Yoshimura

     The answer to that question depends on the kind of home you own, whether it is a condo or a single family and who and how they measure it. Sounds confusing? It is. Let's start with a set of plans which are usually drawn by home designers with CAD expertise and not architects who are required to measure according to specific standards. Popular websites and glossy magazines on the rack identify the square footage of each floor of the plan which need to be converted to Alaska structural standards. One significant discrepancy amongst designers and even home appraisers is how stairwells are calculated. Some count the first floor square footage of the stairwell if it is used for a closet or nook with or without a discount for the low ceiling. Some also add the landing, if there is one. Others will or will not count the opening on the second floor. I've seen square footage vary on the same home by 100 square feet as measured by the designer and different appraisers. This has occurred after the homes have actually been built.

     Plans are submitted to the Municipality of Anchorage for approval. They are valued by the square footage cost of improvements as established by the MOA. The value may vary based upon the reviewer. Pop-outs and cantilevers may or may not be measured. Field changes due to excavation, i.e. the discovery of a potential daylight basement may or may not have a change order. We've recently had a field change where the builder added a cantilever on the second and third floor which resulted in an additional 92 square feet. This square footage most likely won't show up five years from now in MOA records when today's buyer goes to sell the home which is why the square footage in the tax records is not always accurate. In another instance, we recently had a discrepancy of 50 square feet between the MOA taxed assessed footage and a physically measured property by a certified appraiser. In this case, the MOA square footage was actually larger than the appraiser's physical measurements due to a discounted garage pop-out. At current values of $200 per square foot, that difference in value was worth $10,000.

     Single family homes are measured outside wall to outside wall. Theoretically, condos are measured paint to paint, as required by the Horizontal Regime Act. However, we recently saw two identical condos in the same community identified in Multiple Listing Service with a discrepancy of 120 feet. The difference? A disclaimer at the bottom of the flyer by the builder stating how he was calculating his measurements. This builder was reputable enough to identify he was measuring outside wall to outside wall rather than paint to paint. Others may not be so forthright.

     In most areas of the lower 48, garages are included in the square footage of the home. Not so in Alaska. When you are quoted square footage by your realtor or builder, it should only be for the actual living area of the home. Ceiling height is not part of the square footage. Today, builders are building ceilings that are eight, nine, ten, eleven, or twelve feet high. However, there is no "added" value as calculated by MLS in price per square foot. Sheet rockers and builders, however, are well aware of the added cost of volume which has become a "must-have" for many buyers. Take a guess as to which has more value: a two-story living room ceiling or a lower ceiling with a bedroom above? The way measurements are done today, it's the extra bedroom. What do buyers want? The two-story ceiling.

     So how important is square footage? Very. MLS currently identifies the cost per square foot as one of its fields. Realtors doing comparative market analysis use low square footage cost as a selling point, disregarding vertical value and other added amenities as well as the overall general condition of the home. It's a mistake for all of us in the industry to use square footage as the benchmark of value.

It's all about the kitchen

by Connie Yoshimura

     I love kitchens.  I imagine the rich aroma of homemade banana bread with just a touch of cinnamon coming out of the top double oven; the scratch of the saute pan on the five-burner Jennair stove top as my husband stirs lemon risotto; the morning sound of water bursting out of the Delta faucet as it hits the Kohler farmer’s sink. But, I only dreamt my kitchen had all these luxuries.  That’s because  millions of other Americans, like me, are in love with their kitchens and can’t get them out of their dreams or pocketbooks.  Whether you’re a gourmet cook or a take-out junkie, the kitchen is the heart of the home.  It is the number one room  that gets remodeled and it is where new home buyers spend thousands of dollars for that one, two, three or dozens of extras trying to make all those dreamt of aromas and memories come true.  Kitchens now get center stage in new home plans and are no longer stuck into a back corner of the home.  They’re open and airy with large windows, spacious islands, high ceilings and with cupboards that look like finely stained furniture.  They’re sleek, modern and almost indistinguishable from other living areas.

     But, here is where the olive oil hits the hot frying pan. It is also the most expensive room in the home to remodel or create.  There are dozens of choices when it comes to finishing a kitchen and they all add to the cost.  Cabinets have become fine furniture, although it’s not just the door and frames.  Soft closings on drawers can add $250.  Add two stained glass doors for $500.  Under cabinet lighting an extra $300, just for the outlets. Double ovens and a cook top with a fancy hood can add $7,000 to $10,000 to a standard builder’s allowance for appliances in an already half million dollar home.  Forget the four-inch backsplash.  They now extend all the way to the bottom of the cabinet. You want pulls and knobs on your cabinetry?  Add $2.50 for a modest pull and another $2.50 for each one to be installed because everyone has to be measured.   Peninsulas are out and its now stand-alone, walk-around  islands and the bigger the better.  An island that doesn’t seat at least four is almost obsolete.  And then there is the pantry.  It’s a walk-in, big enough to store the next Costco run, with a fancy glass door.   Add another $450 to your already over budget allowance.

     And that instant hot water dispenser that will save you three minutes in the microwave?  Add $750.  Kitchen floors are now hard surfaces with wood laminate being the most popular.  Next is tile but without in-floor radiant heat which if done right can add $15,000 per floor, makes for a cold  floor in Alaska.   

     Remember those fluorescent ceiling mounts?  They’ve been replaced with recessed cans and pendants over that detached island—the larger and more interesting the light fixture the better.  If that’s all you can afford to do now, replace your small pendants with new light fixtures.  That one small investment will change the character of your kitchen and brighten your morning on a cold winter day.

The New Multi-Town?

by Connie Yoshimura

     Anchorage may be a ‘big wild life’ place to live for now, but it is fast becoming a multi-family community with more building permits for multi-unit dwellings than single family homes.  The mid-year building statistics are a stark reminder that our single family homes are becoming increasingly expensive, rare and old.  Single family permits have actually declined from 182 homes in 2013 to 149 while duplex units have increased from 44 to 116 and multi-family units have increased from 66 to 158 units.  What little residential building that is occurring in Anchorage is becoming more up close and personal with duplexes and four-plexes the common denominator. Your neighbor is no longer across a sixty-foot wide backyard, but just an air space away from your living room wall.

     Our big wild life is being threatened by a lack of affordable single family homes for our working middle class.  When, and not if, mortgage interest rates increase, the affordability factor will make our housing crisis even more acute. The only good news in the building reports is the continued increase in residential alterations or permitted ‘remodels’ which totaled $9.6 million and had 652 applications.  Our aging housing stock is in need of both cosmetic and functional repairs.  Neighborhoods like Old Turnagain in mid-town and Turnagain View in south Anchorage are maintaining values and popularity due to the conscientious efforts of homeowners to keep their homes and yards in prime condition.

     The average-priced home that sold in MLS these past six months had a value of $359,000, a 6% increase over the 2013 mid-year report.  Interestingly enough, the average value of a sold condo was stagnant at $199,000 for both years.  Condo sales did increase 11% from 465 to 514, along with a 30% decrease in market time. Buyers are being forced into condos due to lack of affordable single family homes despite the fact that the most successful condo developments are historically in niche markets created for buyers who desire a specific location and lifestyle.  Anchorage families with two young children, a full-size pick-up truck and a snow machine, who want to enjoy our ‘big wild life’ don’t want to live in a two-bedroom, or even a three-bedroom condo, where they have to BBQ in their driveway for lack of backyard space.

    Anchorage housing is going in the wrong direction.  There are 5,800 acres of residentially zoned land in the Anchorage bowl.  However, getting affordable access to it is the bottle neck. The MOA mandated expensive cost for installation of roads, water and sewer makes it prohibitive for development within the context of building the average priced single family home. The upcoming implementation in 2015 of the new Title 21 residential design standards will add another 2-3% to the cost of the average new construction home.  The MOA needs to reactivate its willingness to financially participate in the extension of infrastructure which will generate the opportunity for more affordable family housing. Developers should not be asked to foot the entire bill for a collector road if they are not allowed to create a lot with driveway access to the road.  The MOA also needs to bring its design criteria for infrastructure in line with state and federal road and lighting standards. Significant amendments for the new Title 21 need to be created, allowing for more flexibility in residential design standards and land development, particularly for those areas in need of redevelopment. Without these changes, Anchorage is going to lose its ‘big wild life’ self-designation and become the ‘multi’ town of the north.

An Eagle's Eye View of the Market

by Connie Yoshimura

     Last week, MLS reported 51 new single family sales in Anchorage.  Of those sales, 19 were under $300,000 and 15 were under $400,000. In other words,  more than 50% of the  sales were under $400,000 while at the same time the new construction average valuation in 2014 for a single family building permit is $369,830, not including the lot value.  This disconnect between single family buyers and current new construction prices is at the heart of Anchorage’s housing crisis.  The statistics get even more interesting when looking at the average age of the homes sold.  The year 1992 is when building codes began to make significant health, climate and safety changes.  However, of the 51 sales, 34  were built prior to 1990, making 67% of the homes sold facing some current or future  functional obsolescence and ultimately increasing the annual cost of home ownership for maintenance and repair, to say nothing about the 48% increase in the cost of gas that Enstar just announced to heat these aging properties.   

     During the same week, 26 condos went under contract with an average sales price of $190,650 while only two single family homes sold under $200,000.  With one-third of all sales last week under $200,000, the shortage for affordable housing in Anchorage could not be more glaring.  With a few exceptions, the average price per square foot for condos is $164, although new construction medium density condos can’t be built for less than$200 per square foot.  Buyers are definitely willing to live in smaller square footage just to get into the market place and stop paying high rental rates.  Of the 25 condos, 11 are under 1,000 square feet; ten are under 1,500 square feet and only 4 are over 1,500 square feet.  Fifteen of the 25 condos were built in the 1980’s and 1970’s which means condo owners are going to be faced with special assessments or association loans from AHFC for roof repairs, painting, driveway and street replacements in the near term.  

     A good example of the condo market and its ups and downs are the Foxwood condos off Arctic Boulevard.  When they were first built in the 1980s, the asking price was $82,500. These units have two bedrooms, two baths, 745 square feet, a fire place and a heated garage space.  During the real estate recession of the late 1980’s, these condos dipped in value to $32,000.  Since then, they have experienced steady appreciation and last week’s pending sale was for $158,000, making it one of the highest priced resales in the complex.  And at $212 per square foot, that price meets or exceeds the cost of new construction.  I wish I had bought a few way back when at $32,000 a unit!
 
    What is obvious from these statistics is any newly built condo under $300,000 has to be a good investment.  Newly built condos have less of a risk for special replacement and repair assessments.   And any new single family home on a 6,000 square foot lot with water, sewer and a publicly dedicated road under $500,000 also makes for a smart buy.  Unfortunately, with the low number of building permits for both single family and multi-family development not much is going to change in the way of affordability in Anchorage.  Costs are only going to continue to creep up and buyers who hesitate are going to regret not buying when they should have. Just like me, passing up the opportunity to buy a $32,000 condo way back when.

Displaying blog entries 1-4 of 4

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