Turbulence on the horizon…
What will 2013 bring? Many people are saying that 2013 will be a great year. I believe that we will good times and slow times in the coming year. 2012 saw growth in the number of homes sold in the Anchorage and Eagle River markets. The Mat-Su Valley was closer to flat, with gains in some areas and losses in other. Most will agree that the average home value increased between 1.5-3.5%.
At a recent Chugiak/Eagle River Chamber of Commerce luncheon, Mark Edwards, Economist for Northrim Bank spoke on the economy. Tax reform and government spending are issues here in Alaska as well as Washington DC. He also explained that many new businesses are started with funding taken from the equity one has in their home. So if values are increasing, we may see more new businesses that will lead to job creation.
As we move through the year I believe inflation and interest rates will drive the ebb and flows of the housing market. Currently here in Alaska we have limited supply of homes on the market. Unless values increase 5-6% many home owner may not be able to sell their homes without taking a small loss. So for the first half of 2013 I believe the new construction market will do well. As prices rise in 2013 more homes should come on the market, leading to a saturation point in the 3rd Quarter.
If interest rates rise, buyers will have less buying power. If inflation occurs in any significant amount then new home prices will also rise above the reach of many buyers. Looking at all this information it is my opinion, and let me emphasis this, my opinion, the market will see good growth in value of homes below $350,000. However buyers in this range will get less for the amount they spend as the year progresses. The best deals will be in the spring.
Higher end homes with smart owners will bring their homes to the market slightly below the retail value and sell quickly, while those trying to take advantage of rising prices that attempt to sell for full retail will sit on the market. If interest rates rise, we will see downward pressure on the higher priced homes.
So fasten your seatbelts. Get your home ready to put on the market before the federal government starts messing with interest rates and taxes. I can create a market evaluation for your home and give you advice on when would be the best time to sell your home.
Call me at 907-360-7471 or click this link Market Analysis.