Winter is here in Alaska it would seem..ready or not! What an interesting year 2021 has been. There is an old Bob Dylan song, “Everything is Broken” that feels appropriate for these crazy times! I have found myself too often being anxious, stressed, fearful and generally out of sorts. One of my favorite writer’s/ podcaster’s is Cal Newport and he suggests a Deep Reset. First get rid of as much (or all) digital distractions (media, social media etc). Then focus on your own health, habits, attitude and being thankful. Then focus on being a Positive influence with your family, friends co-worker’s etc. Then be a positive influence in your community. Good advice!
It has been a remarkable couple years in the real estate world. Home has become so much more important and as a nation we are experiencing the effects of NOT building near enough homes since 2012. We are somewhere between 6-8,000,000 homes short of what we needed just to keep up with population growth according to experts. So now we have low supply not keeping up with high demand and rapid appreciation. I have been working on the numbers of where we have been & where we are to get an idea where things are going. And frankly no, I don’t think there is a crash coming any time soon. I’m starting with 3 segment’s of our residential market, Core area of the Valley, Anchorage single family and Anchorage condo’s. Next will be multi family.
Let’s get started with Mat-Su Valley core area (Palmer to Big Lake). The first graph compares active listings (supply) with pending sales (demand) from the first of the year to end of October. Realize that this graph shows the reverse from “normal” We never broke 300 active listings this year and were over 600 pending sales for 4 months! The ratio’s between active and pending’s are insane peaking at over 300% in April/May. Watching both these trends closely especially the pending sales. Everyone would Love to have more supply but I don’t see where it is going to come from!
A good reason for the lack of Supply has been the rapid increase in home values brought about by high demand & inflation. The average sales price increased almost 17% in 6 months this year and has remained pretty flat since. Another interesting indicator: We were involved with 3 sales this year of homes built in 2020 and sold in a year or less. The average sales price in 2020 was $281,000 and the average sales price in 2021 was $320,000 about a 14% increase. That is a big deal! I think that tended to diminish the impact of forbearance in that homeowners had more equity to refinance or sell. The average sales price in 2019 YTD was $281,000 vs $358,000 now which again is huge. # of sold homes YTD is 1896 compared to 1705 in 2020 & 1598 in 2019! And lastly average days on market have been hovering around 23 compared to 58 in 2019.
The Anchorage Condo marketplace shows a the typical decrease of supply and a more moderate increase in demand. Average sales price is up about 5% this year. This is an ALMOST normal market.
Below is the 3 year comparison of supply & demand showing a more moderate market certainly compared to single family residential.
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