Economic Recovery: Real Estate Outlook
Real estate has been one of the few economic bright spots for Alaska during the Covid-19 pandemic. To determine why that is we reached out to industry insiders who say though the process of buying and selling homes has been effected, the number of sales has not.
"It's like Covid-19 hasn't had any impact on the housing market." Says Connie Yoshimura of Dwell Realty, soon to be Berkshire Hathaway.
According to Yoshimura in at least one week in May there were 81 single-family home sales pending, she says that's twice the number for the same week in 2018.
"I attribute that to really we have record low inventory and we've had historic low-interest rates." Says Yoshimura.
Those factors have led to an average single home sales price of around four-hundred thousand dollars in the Anchorage area says, Yoshimura. That's the highest sales average for any month since at least 2012.
Out in the Mat-Su Valley, real estate specialist Michelle Mueller of The Kristan Cole Team tells me that while the numbers are different, closer to two-hundred and fifty thousand for a single-family home the landscape is similar.
"There's definitely a shortage of inventory but as far as buyers go I am extremely busy." Says Mueller.
While home sales haven't dropped the process of selling homes has drastically changed through the hunker down, social distancing, mid-COVID pandemic period.
"We had to get really creative." Says Mueller.
Different agents and agencies have employed a variety of tactics, everything from virtual open houses on the computer to FaceTime walk-through of a property, to drones tours that fly all throughout a perspective home.
"Our realtor did an awesome thing with a drone video, he had a kid come in and did a walk-through tour of the house. Which was really cool." Says Sonja Daum, who recently sold her home in the Anchorage area.
These new needs have even spawned small cottage industries. Enterprising entrepreneur Like Bredar started up a company that does these drone runs around, into, and through houses. It started with one opportunity and has grown from there.
"I said I know this hasn't been done much and it's a little bit concerning it's a drone indoors but I've been flying for months and I feel like I'm ready to do this and I can do it safely." Says Bredar
While housing sales are up, things look different in the commercial real estate space.
"Generally been pretty quiet for the most part." Says Joe Saunders of Alcan Realty.
Unlike the family homes side of the real estate business, the commercial side has faced a slew of challenges. Businesses closing, businesses downsizing, businesses adjusting to working from home modes of operation, it's all had an effect.
"Quite a few that we've worked with already that are actually downsized so we help them find new spaces that allow them to operate with a more streamlined staff." Says Saunders
Some industries were already leaning towards a smaller office footprint when the pandemic hit which made the move even more appealing.
"The coronavirus maybe accelerates some of that process." Says Saunders.
Whether in housing or commercial real estate, be it a particular market seeing prices swell or facing greater uncertainty it is all part of the economic reality here in the last frontier. Alaska continues to do it's best to forge forward through this worldwide disruption with few answers to the most important question in every industry. What's next?