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A Real Estate ‘True Confession’

by Connie Yoshimura

I have been listing and selling real estate in Anchorage for almost forty years. It’s a job I love and will continue to do in the future. You would think after all those years of experience I would not make a simple mistake but I did. It has haunted me for the past several weeks and so in order to get it out of my psyche, I need to share it with you and also others in the business so that we can all learn from it and be reminded of our professional vulnerabilities. 

The vast majority of residential real estate offers are written on an MLS purchase and sale form (PSA) which is a legally well-written document. When properly filled out, the PSA has specific dates and times for performance of various contingencies and acceptances, including such items as the time to order a preliminary title report; the home inspection and buyer’s request for repairs; the time to order the appraisal and the closing date. Most importantly, any offer or any counteroffer has a specific date and time for a response. I missed a counteroffer deadline. The lesson I learned is that my email response of acceptance which was seven minutes past the stated deadline is not a legal counter. I knew that, of course, but under most circumstances the email would have been ‘good enough’ but this was a sought-after property with multiple offers. The legal DocuSign acceptance on an MLS form arrived approximately two and a half hours later but by that time the seller had accepted another offer which was their legal right to do so. I lost a sale but more importantly my buyer lost a significant opportunity. 

The lessons learned here are many. Emails, texts, PDFS and DocuSign have made our industry a bit sloppy. We have no control over when DocuSigns are going to arrive in an inbox. Two weeks ago, the internet carrier that most Alaskans use was down for several hours. Some people lined up at other carriers’ stores just to buy a second phone so that business could continue. But that is not my excuse. I was late in writing and sending the acceptance, whether seven minutes or two and a half hours. It is also a cautionary tale for buyers and sellers who are busy people. Make sure your realtor tells you when you must respond by. Voicemails, emails left on buyer, seller or realtor devices are not binding contracts.

As a broker, I review files on a daily basis and even a missing initial, if push came to shove, can void a contract. Many of us do business with family in addition to repeat buyers and sellers who become friends and/or long term professional associates. Twenty percent of all realtors do eighty percent of all sales so it is easy for us to forget, take for granted or make assumptions about business relationships that may not always be reciprocal in intent but the bottom line is this: follow the contract.       

Well, according to the July issue of Alaska Economic Trends, the Juneau quarter pounder with cheese at $5.29 is the fourth most expensive burger in the U.S. The Anchorage burger at $5.02 fell out of the top ten and now ranks 11th. Mimicking the burger, Anchorage is also no longer Alaska’s most expensive place to live. It’s Juneau. According to the report for the first quarter 2018, Anchorage’s consumer price index is 134 compared to Juneau’s 145.4. That may not be much consolation for Anchorage’s residents who spend an average of 40.5% of their income on housing. However, there are now sixteen cities that have higher costs of living than anywhere in Alaska, including Seattle, which now ranks sixth in the nation. Anchorage is most comparable in cost of living to Portland, Oregon, a city that is frequently mentioned by local planners as the place to model our future planning after.

So has the Anchorage housing market cooled as a result of Alaska’s recession? That’s what the report says, along with stating the average home price hasn’t changed much at $367,743 and the rental market has softened with increased vacancies. What I would say, however, is that the local housing market has weathered the recession remarkably well with only a 3.2% decline from original list price to closed price. But when the home’s price is adjusted, the home sells for 1.3% of listed price. This adjustment indicates that sellers may still be holding on to an unrealistic expectation of appreciation which has not occurred during the past three years. Prior to that time, however, from 2012 to 2015, appreciation was a cumulative 13.3%. If you purchased during that time, you have equity and can afford to sell. If you’ve bought in the past three years, wait for future appreciation before selling or if you are in a newer condo or home, that area of the rental market is still very desirable.

I would attribute the majority of our decline in value to the thirty-five year plus age of our housing inventory that is now requiring new roofs, mechanical and electrical systems as they reach the end of their life expectancy. Plus, the traditional two-story floor home with both a living and family room on the first floor is not attractive to the millennials’ more casual lifestyle. So in answer to the question ‘has the Anchorage market cooled’? I’d say no more than five degrees with mild temperatures continuing until late fall.

COMING SOON!

Dwell Realty is proud to announce it is sponsoring a weekly radio show devoted to real estate. The show airs live every Thursday from 2 to 2:30 pm on KENI-AM (650) beginning on July 26th. Call in your questions to Connie each week.

The Myth about Where Millennials Want to Live

by Connie Yoshimura

Millennials, those born from 1981 to 1996, have been slow in embracing home ownership but much of that hesitation is now changing as they begin to marry and start families. Burdened by massive amounts of student loan debt, $1.5 trillion, according to national statistics, many millennials postponed home buying and marriage and rented in urban downtown areas. However, as they have aged they are moving to the suburbs, back tracking in the footsteps of their parents and seeking out and buying the type of homes where they were raised. In other words, they are moving to the suburbs.

The National Association of Realtors data for 2017 showed an increased share of buyers 36 and younger who purchased in a suburb location and bought a single family home. They also reported that 49% of those buyers have children under the age of 18, 66% are married and 13% are unmarried couples which is the largest share of all generations. Of these groups, 66% were first time homebuyers.

Here in Anchorage we see this trend emerging with a few Alaskan quirks. I like to say I’ve seen more babies in my office in the past year than in the previous five years altogether. Dwell’s Marketing Director, who edits this column for me, is a millennial. She married last year, adopted two Alaskan style dogs and just purchased her first home. She searched online for six months and bought the first home she and her husband physically went to see. It has three bedrooms, two baths, a single car garage and was built in 1976. They sacrificed age for a square foot lot with a fenced yard for the dogs, a nice storage shed andtwo cords of wood for the wood stove. They are now remodeling and concerned they may need to replace the roof.  

I share this story with you because I hope Anchorage, as a community, doesn’t respond to the myth that all millennials are urbanites and want to live on top of parking garage or in a multi-story condo building in downtown Anchorage which seems to be the direction the municipality is encouraging. Yes, there are millennials, generation X and Ys and snow birds who want to lock and leave and/or be close to dining, entertainment and the Tony Knowles Coastal Trail but according to national statistics, the vast majority of home buyers still prefer living in a single family dwelling, whether it be a zero lot line, PUD (planned unit development), cluster home or simply a small lot community. Buyers, particularly those in Alaska, want to park their truck in a garage with direct access to their living space;have a back yard at least 20x20 square feet to BBQ on a warm summer day and a deck to view the Northern Lights in the winter. The irony of this urban advocacy is that almost all of our city planners and elected officials, regardless of their age and income, live in a single family community, while at the same time advocating for the urban lifestyle for others.

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