What Is Causing This Market?

What Is Causing This Market?
Post By: September 11, 2020 | Author: admin

By Cora Carleson:

End of Summer and no Alaska State Fair. How could this have happened? I mean really no fair, that there is no fair! So what are we to do with our late summer early fall? Buy or sell a house! Yup the market is still blazing hot and we don’t have enough to sell. So if you happen to have an extra house laying around, give me a call – because now is the time to sell it! I have many buyers looking for lake front property, homes with acreage – 5 or more, smaller ranch style homes with double car garage. Of course, anything in a good commute location is going fast. Why are things selling so fast? I have variety of response to this question. I asked a bunch of people that I was with recently (not at the same time, because of social distancing you know!) and here is what their opinions are about this crazy market:
Covid hit and everyone got stuck in their house and realized, “I don’t really like this house, I want a new one!” Bonnie B
This is an interesting theory because I know people that have said that! I can especially relate to people who are living in apartments or even small condo’s. I am sure the space got much smaller when we were all hunkered down.
“The military had people staying put for the first part of the summer. Then, when they started up the moving around again – it was just a huge amount of people all moving at the same time” Dustin M.
Again, another interest idea and yes this did happen. We got an influx of people moving to Alaska stationed at JBER. So maybe between these two things, it created our market today.
“Interest rates! The low rates are the key factor for people who were on the fence about buying and now, buying is cheaper than rent!” Ben C
This is probably true! When it’s several hundreds of dollars cheaper per month to own than to rent, and you have the freedom to paint your walls purple, heck yeah! So there is that!
“I think people want more space. This Covid thing really got people feeling like they needed more yard space or more private space”. Marla D
I agree, I do think that people just started to see the importance of privacy and space. This has been an unusual year and I think we have all felt a little “hemmed in” so to speak! Space is good.
“I know exactly what it is, you can’t leave the state! The boarders are were closed and unless you own property in Alaska, you can’t get in!” Gary J
Hummm, never thought of that one before! Could be I know that I recently sold a home to some nice people from Wyoming. They have never seen the home the bought! Just on line and me doing a walk thru with them over the phone. They were getting ready to drive up the ALCAN and they called and asked me for copies of all their papers so they could get thru Canada and into Alaska. Never in my 60+ years have I seen anything like that before.
“People want to live in Alaska because of all the riots in the lower 48, so we don’t have enough homes.” Carly W
Well, I have to admit, I am glad I live in Alaska, but for many reason, not just that one.
“It’s jobs. There is more job opportunity here right now than in the lower 48 so people aren’t leaving to take jobs down there.” Larry D
That could be. I know that skilled labor has always been a problem here, just not enough. People are able to work from home more now – I think covid helped everyone understand that you can actually do a lot of your work from home.
“I think it’s the school situation. We have a really wonderful school district here in the valley and of course home school system here and that really helps people made decisions about what their kids are going to do until this Covid thing passes. There is a lot of support in the home school community. There are also some wonderful private Christian schools that have a wonderful reputation and are working hard to accommodate students and parents, it’s our schools.” Debra H
Yes, that true too. This whole pandemic has really made us re-evaluate a few things that’s for sure. But even before the pandemic, our schools have been a real asset to the Valley.

With this said and all these theory’s rolling around as to why, here is one that I know is true – the market is hot right now because all of the above is true AND we are behind on new home starts. As you know, Anchorage suffers a bit from developable land to build on. It’s just hard to find and when you do, the development costs are very expensive. Even here in the Valley, the land developing costs can be quite staggering. It’s a gamble for developers, imagine having to put all your money into subdividing and the market changes and you end up with less that what your started with. There is an old joke: “How does a developer become a millionaire? He starts out with 2 million!”. So much of the developable land just isn’t being developed. No land development, no construction! No Construction no new houses (sad face). No new houses, higher demand and of course higher demand, means higher prices.

So there you have it! All of the theory’s and ideas and I know there is more. Some of the wild and crazy, some of them practical and plausible. Right now, we need inventory, if you have it, call me – I’ll sell it!