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Good News For Anchorage Home Buyers (September 21, 2015)

by Connie Yoshimura

      This past Thursday’s Federal Reserve announcement of no increase in interest rates will keep mortgage rates at 4% for at least the next month until the next Fed meeting in October. This good news coupled with tomorrow’s announcement of a record breaking PFD check of approximately $2,000 per person, give or take a handful of dollars, will make for an active fall home buying market. After all, what better investment for a family of four with $8,000 arriving in their checking account than a new home? For example, $8,000 will pay all your closing costs and prepaids on a $300,000 VA purchase of a home. For an FHA loan, with a minimum 3.5% down payment, the $8,000 will pay all but $400 of the down payment on a purchase price of $240,000 which is more than the current MLS average sales price of $211,313 for a condominium. And for a brand new condo, some builders are providing closing costs and prepaid reserves which would amount to $5,896.92. So, take your permanent fund family dividend, add $400 and ask your local builder or seller to contribute closing costs and pre-paids and you’ve bought yourself a new home for your family. And with today’s high rental rates of over $1,200 for a two bedroom apartment, it’s not unreasonable to say that owning now costs less than renting.

     The permanent fund dividend check comes only once a year but there is almost no doubt that between now and October 2016 the mortgage interest rate will creep up from 4%. An increase from 4 to 4.5% is the difference of approximately $100 per month on a $300,000 mortgage. That may not seem like a lot but it will take four times that amount in monthly income for a buyer to qualify for the same mortgage amount.

     Buyers can also consider using all or part of their dividend to pay down credit card debt which can improve your credit score or give you more buying power because you have less consumer debt. All this information comes from Aileen Dimmick from Residential Mortgage at 952-3860.

     So with oil prices low and the constant media reminder of Alaska’s deficient spending, is now a good time to buy a home rather than take that vacation to Hawaii? Despite the obsession with our deficit spending, Anchorage and Eagle River’s residential market is holding up remarkably well. So far this year, the condo market has shown an appreciation of 2.85%. Anchorage’s single family homes have appreciated 2.63 per cent year to date over last year’s annual appreciation rate of 3.23%. Taking into account all price ranges, last week’s inventory remained below 700 homes for sale. And homes are continuing to sell for 99% of the listed price. Our market has remained stable with low inventory and modest appreciation. Keeping interest rates at an almost historic low has contributed to that stability. Buyers should take advantage of this postponement of a rate increase.

Are You Ready to Age in Place?

by Connie Yoshimura

     That answer to that question is ‘yes’, at least according to the American Institute of Architects’ housing survey just published by the National Association of Homebuilders. According to the survey, homeowners are attempting to remodel or build homes to grow old in. In Anchorage, that trend is evident by a substantial increase in remodeling permits over the past couple of years and more frequent inquiries as to the availability of ranch homes, despite the fact that their increase cost for new construction is anywhere from $250 to $325 per square foot. Ranches also generally take a larger and wider lot which also adds to their cost. Corner lots are popular for ranch homes because they are usually larger, although that additional square footage is usually taken up by front and side yard setbacks. Ranch buyers appear less concerned about the size of the yard because they’re no longer interested in maintaining gardens and extensive landscaping. Forty-six percent of home buyers surveyed now prefer a single floor design and 56% percent prefer informal spaces.

     Accessibility in and out of the home is also a priority for 59% of respondents. That means no steps from the garage to the mud room and slab on grade for construction. Active baby boomers are also concerned about caring for aging parents which is also fueling this trend for ranch homes, or double master suites, with one being on the first floor with its own private bath. The preferred ranch home has a master suite on one side of the home and secondary bedrooms or the second suite on the other side. A great room and open kitchen is where everyone comes together for meals and family gatherings.

    Other new trends reported by the survey include a 20% increase in the size of home since 2010. The improved national economy has resulted in the return of ‘big is better’. All homes have kitchens and bathrooms which are the two most expensive rooms in any home. Adding ‘great room’ square footage or increasing bedroom size from the minimal 9 x 10 for secondary bedrooms is an inexpensive way to add square footage. Volume, or the height of the ceiling, has leveled off to the new standard of 9 foot ceilings. Walk into any home and you can tell its age by its ceiling height. You can also determine the age of the home by whether or not it has a formal living room and dining room. Anecdotally, probably only one out of 15 new home buyers ask for a formal living room or dining room. And, if they do ask, it is usually for a formal dining room. What is popular, however, and replacing the formal living room, is the first floor office/den/flex room, which is usually about 10 x 12 and located off the entry. That’s the extra space or retreat area when it comes for private time. Gone, however, is the upstairs loft/computer room. Now, everyone is just walking around with an iphone for messages and information.

Hiring the ‘Handyman’

by Connie Yoshimura

     We do it all the time, because we are too busy or just not ‘handy’ around the house. Most likely, he or she has been recommended by a friend or co-worker. They might even be a relative between jobs we want to help out. Their price seems right to build the deck, replace a hot water heater, add a window or door, change out the dining room chandelier, or whatever else it is we need to have done. If you’re like most of us who hire the occasional ‘handyman’, we never ask to see their license or insurance--but we should. The handyman definition has become so problematic to the consumer that the State of Alaska took action to protect the consumer.
As of January 1, 2015, a professional ‘General Contractor-Handyman’ license is required. If someone is doing business under this license, the aggregate total of the project must not exceed $10,000 and they must carry public liability and property damage insurance as required by AS 08.18.101. Any work that requires a specialty license such as structural, plumbing, heating, sheet metal, electrical, or has a value over $10,000 also requires a business license, liability insurance and a bond of $10,000. Any work that has an aggregate contract price of $10,000 or less, including all labor, materials and other items, when the work is not part of a larger or major operation or otherwise divided into contracts of less than $10,000, shall require a bond of $5,000. This is according to Sec. 08.18.071 of the statutes and regulations for construction contractors.
     What can or can’t a handyman do? They can paint, dry wall, and lay flooring. They can adjust an interior door, install shelving in closets and do other work that doesn’t require a specialty license or interfere with the structural integrity of a dwelling. They can’t enlarge your backyard deck because that’s structural. They can’t move an electrical outlet because that does require a specialty license. Any remodeling that requires a ‘handyman’ to hire a subcontractor requires them to have a general contractor’s license.
How does a homeowner know who they are hiring? They should look up the person or entity in public records. Check to see if they have a criminal record in court view. Look for tax liens. Do they have a warranty program and is it in writing? Search the Recorder’s office. Have they ever put a lien on a property for non-payment by the homeowner? Remember, there are always two sides to every complaint. Has the handyman paid state unemployment or worker’s compensation? Do they have employees that they are paying off the books? Have they ever pulled a permit in the MOA? The handyman should never ask you to pull a permit which is required for any work done on a dwelling over $10,000. One licensed and bonded builder with a residential endorsement suggested not hiring someone who doesn’t have a land line and a physical address. A truck and a cell phone is not necessarily an indication of stability.
     With Alaska’s aging housing stock, who does maintenance and repairs on houses is going to become a more and important issue. A licensed, bonded and insured contractor with a written warranty program is the best protection against fraud and poor workmanship. The State of Alaska regulations are there to protect the consumer and it is their responsibility to ask the right questions.

Are You Ready to Age in Place?

by Connie Yoshimura

     That answer to that question is ‘yes’, at least according to the American Institute of Architects’ housing survey just published by the National Association of Homebuilders.  According to the survey, homeowners are attempting to remodel or build homes to grow old in.  In Anchorage, that trend is evident by a substantial increase in remodeling permits over the past couple of years and more frequent inquiries as to the availability of ranch homes, despite the fact that their increase cost for new construction is anywhere from $250 to $325 per square foot.  Ranches also generally take a larger and wider lot which also adds to their cost. Corner lots are popular for ranch homes because they are usually larger, although that additional square footage is usually taken up by front and side yard setbacks.  Ranch buyers appear less concerned about the size of the yard because they’re no longer interested in maintaining gardens and extensive landscaping.  Forty-six percent of home buyers surveyed now prefer a single floor design and 56% percent prefer informal spaces.  
     Accessibility in and out of the home is also a priority for 59% of respondents.  That means no steps from the garage to the mud room and slab on grade for construction.  Active baby boomers are also concerned about caring for aging parents which is also fueling this trend for ranch homes, or double master suites, with one being on the first floor with its own private bath.  The preferred ranch home has a master suite on one side of the home and secondary bedrooms or the second suite on the other side.  A great room and open kitchen is where everyone comes together for meals and family gatherings.
     Other new trends reported by the survey include a 20% increase in the size of home since 2010.  The improved national economy has resulted in the return of  ‘big is better’.  All homes have kitchens and bathrooms which are the two most expensive rooms in any home.  Adding ‘great room’ square footage or increasing bedroom size from the minimal 9 x 10 for secondary bedrooms is an inexpensive way to add square footage.  Volume, or the height of the ceiling, has leveled off to the new standard of 9 foot ceilings.   Walk into any home and you can tell its age by its ceiling height.  You can also determine the age of the home by whether or not it has a formal living room and dining room.  Anecdotally, probably only one out of 15 new home buyers ask for a formal living room or dining room.  And, if they do ask, it is usually for a formal dining room.  What is popular, however, and replacing the formal living room, is the first floor office/den/flex room, which is usually about 10 x 12 and located off the entry.  That’s the extra space or retreat area when it comes for private time.  Gone, however, is the upstairs loft/computer room.  Now, everyone is just walking around with an iphone for messages and information.

Displaying blog entries 1-4 of 4

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