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Business/Economy

Alaska's housing market stable overall, but high-end homes are slow to sell

Anxiety about the economy has many Alaskans unsure of what moves to make when it comes to buying or selling a home.

The answer appears to depend on the price of the house, according to the latest available real estate statistics from the Multiple Listing Service.

For houses priced at $500,000 or below, sellers tend to hold the advantage, assuming they're not asking for too much above the market.

"Virtually all that are priced at market sell quickly," Niel Thomas, associate broker, and Bethany Stamper, sales associate, both at Coldwell Banker Best Properties, wrote in a recent report. In that lower range, Thomas noted, the market will generally correct for an underpriced property.

"You'd likely get multiple offers, and that will push the property price up," he said.

Real estate professionals determine whether a market is more buyer- or seller-friendly based on inventory. And inventory is determined by estimating how many months it would take for all the homes currently on the market to sell, assuming the pace of sales in the past 13 months stays constant.

At less than $500,000, the inventory is two months, a clear seller's market.

In the $500,00 to $750,000 range, the inventory of five months points to a market in which supply and demand are about equal.

Above $750,000, it's a buyer's market. The inventory for up-market homes is estimated at about one year and would likely be even higher but for the fact that some homeowners in that higher bracket are holding back for now because they can't demand the prices they want, the report said.

"Anecdotal evidence suggests that the less-motivated sellers simply withdrew from the market when their price objectives were not achieved," the report said.

Thomas said many higher-end sellers are corporate employees with benefits packages that take the pressure off having to sell. Some companies offer to buy the house outright if it doesn't sell or make up the difference should the sale incur a loss.

"What it means is, from the owner's perspective, the house will sell regardless," he said.

Clusters of upper-end Anchorage homes currently on the market appear in the Turnagain and Westchester Lagoon areas, downtown and in the Prominence Pointe subdivision at the far southern end of the Anchorage Bowl.

State real estate economist Karinne Wiebold said uncertainty about Alaska's economy in light of the more than yearlong sag in oil prices is likely a reason buyers are hesitant to make larger housing investments.

Wiebold recently published a report in the December issue of Alaska Economic Trends showing the state's housing market was stable in the first half of 2015. She said the most recent data, from the third quarter of 2015, showed the housing market both in Anchorage and statewide appears to remain largely unaffected.

"There are not really any signs of downturn in the overall housing market," said Wiebold.

Housing data collected by the Labor Department showed a drop from last year in the number of loans for buyers of single-family homes and condominiums, but the numbers don't stray outside recent norms for this time of year, Wiebold said. In 2014, lending institutions provided 6,889 home loans throughout Alaska, while there were 6,511 loans in 2015. The average sale price for residences requiring loans, which represent the bulk of housing transactions, increased from $294,039 in the third quarter of 2014 to $304,238 in the third quarter of this year.

In Anchorage, homes are not sitting on the market appreciably longer than they were last year, according to the Alaska Association of Realtors. The average length of time a single-family home remained on the market was 36 days in 2014 and 37 days in 2015. Anchorage condos took longer to sell, staying on the market for 53 days last year and 57 days this year.

David Windsor, an associate broker at RE/MAX Dynamic Properties who works in the upper tier of the housing market, said he expects a blip in the real estate market, but no crash.

He routinely tells clients selling pricier properties to be prepared for the selling process to take about two years.

"Everybody seems to be worried about the upper end, but I'm not at all. There are plenty of people both inside and outside of this state with money," Windsor said. "And I might add, a million dollars is not that much anymore, in my opinion. There are plenty of folks that can afford homes above a million dollars."

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