Prices soar, Anchorage home sales continue to rise despite Covid-19 related turmoil
ANCHORAGE, Alaska (KTUU) - “It’s so busy that I don’t have time to eat lunch!” laughed real estate agent Rowena Pediangco with a look of both excitement and exhaustion.
The reason for this work induced diet has to do with record home prices in the Anchorage housing market.
Bill Popp of the Anchorage Economic Development Corporation put it simply. “There is demand but there’s not enough supply so that’s making it more of a seller’s market.”
In fact, according to a chart that was provided by Mr. Popp the average sale of a single-family home this year in Anchorage is $384,884. That is an astounding $18,603 dollars higher than the average back in 2015 which previous to this startling run was the high point of the past ten years.
“That’s a very positive thing for homeowners that are thinking of selling their home to up-size or downsize,” says Popp.
The driving force behind these high home prices is a combination of two factors. One, interest rates have fallen to rock bottom.
“People want to buy right now because of the rate being so low I’ve seen people locking in the rate under 3 (percent),” says Pediangco.
The other reason? Low inventory. There aren’t a lot of homes on the market right now in the Anchorage area compared to the number of buyers. “It’s giving sellers the ability to really sell at the top of their economic ceiling and buyers a stronger purchase power. So they can buy a larger purchase price with the same mortgage that they did maybe seven months ago,” says realtor Vanessa Noble while standing in front of one of those single-family homes that fall into the most sought after demographic right now.
All of this good news for those looking to sell does beg one big question. How long can this last?
“The reality is with the current interest rate it’s just not sustainable for a national economy to have this go on forever,” says Noble.
Bill Popp agrees with her. “How long is this demand going to go on? I think it’s going to be finite for a period of time. I don’t know how long but I do believe there is going to be some tough years in front of us and there’s going to be downward pressure on demand.”
According to Popp, the Anchorage market hasn’t reached that point yet, but he is monitoring the situation. “It’s something we’re going to have to pay very close attention too because the single-family home market and the rental market are both indicators of future trends of what’s going on in the workforce and what’s going on in the general economy,” says Popp.
For now, the indicators continue to look strong in this critically important part of the local economy, but it is a potential canary in the coal mine. One that’s certainly worth keeping an eye on in these uncertain times.
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