By Bryan Epley
Special to the Turnagain Times
Now that we’ve been operating the RE/MAX of Alyeska franchise for almost two years, I have had the opportunity to meet, and conduct business with, many of our fellow Girdwood residents. Throughout the course of business and outside life, I am frequently asked real estate questions and most of these questions are essentially, “What’s happening in the market?” Sometimes this question is meant more out of curiosity, and sometimes this question as meant to be more seeking an understanding in the shift we have seen in the real estate market in the last twelve months.
Information comes from many sources and it is important to understand the origin of the information received. Most people are aware of the shift in the national real estate market. Sales, particularly those of new homes, have slowed on average throughout the country. In many of the markets where year-over-year strong appreciation was seen, prices, and values, have sharply declined. In many markets where year-over-year steady appreciation was seen, prices, and values, remain steady. It is nearly impossible to assess local market conditions by looking at national indicators.
So what is happening in our market? Although we typically see between 70 and 80 properties (Homes, Condominiums, Vacant Land, and Multi-Family) change hands in any given year in Girdwood, we saw just 64 properties change hands in 2006. This is a sharp increase from the paltry 49 properties we saw change hands in 2005. Marketing time for a Home in 2006 was an average of 45 days, as compared to an average of 38 days in 2005, and a Seller could expect to receive 98% of list price in 2006, as compared to an average of 97% in 2005. Interestingly, the average Sale Price of a Home in 2006 was $404,000, as opposed to $333,000 in 2005. Now, this doesn’t mean that the average home increased in value this amount; it means that the average home sold during 2006 increased in value this amount. We had a different group of homes sell this year than last year. Condominiums and Vacant Land were a different story. Both saw increases in the average Sale Price, but both saw significant increases in marketing time, while Seller’s could expect to receive about the same percentage of proceeds relative to List Price. However, this is a small market and can be easily impacted by just a few sales. I suspect that slow sales of a particular group of condominiums adversely affect the average marketing time for condominiums as a whole.
What does all this mean? We work with a handful of very experience Girdwood appraisers on a regular basis. These appraisers report to me that we are continuing to see moderate appreciation. It is important to understand however that appreciation is not a constant factor throughout value ranges. We are seeing more appreciation around the average Home Sale Price of $404,000 than any other market value segment. Taking appreciation, marketing time, and the percent proceeds of List Price a Seller can expect, we can surmise that the strong Seller’s market we saw for a few years has transitioned into a balanced market. After so many years of a Seller’s market, it may now seem like a Buyer’s market, but this is not the case.
What can we expect? The future is always tough to predict. The facts are that the national and state economies are strong, unemployment rates are low, and interest rates remain attractive. On a more local note, Girdwood remains an attractive place to live, with many improvements on the board for the upcoming summer. Long awaited improvements in the Townsite, including construction of the Library and Community Center, completion of the Park and Ride, new paving, Townsquare Park upgrades, construction of the Glacier City Center, and ongoing construction of the Snowraven Condominiums are sure to continue to enhance our commercial district. The sale of the Resort to a firm who plans realistic and modest improvements to the day skier facilities and Base Area will enhance the experience for the Resort’s base clientele scattered throughout south central Alaska and, likely, will help increase demand for the ski and snowboard, and related, experiences. Continued construction of the attractive Norway Estates and the Cedar Creek executive homes will fill a niche that will likely grow as the Resort makes their anticipated improvements.
Don’t expect sky rocketing values and mass speculation, but expect modest and sustainable year-over-year appreciation and sales activity, provided there are no major world or national economic, terrorist, or natural disasters. If either buying or selling fit your long-range personal goals, you’re fortunate enough to be in a stable market that should afford you the opportunity to help you reach these goals. If you’re planning to sell, listen to your Licensee and price your home close to where it will sell as the market will be more price sensitive than it has been in recent years and expect it to take longer to sell than in recent years. If you’re planning to buy, don’t get too wild with low offers; the statistics show that a Seller can expect to receive, on average, close to asking price for a reasonably priced property.
Bryan Epley is a Realtor for Remax of Alyeska in Girdwood.
Tel. 907/783-2010. Bryan@BryanEpley.com.
* All statistics are based on Alaska M. L. S. data.