Homer Alaska - Business

It's still a little early to tell for sure, but data for the first half of the year seems to show that, said Max Korting, president of REMAX of Alaska, a leading real estate firm.

Korting and Dan Fauske, executive director of Alaska Housing Finance Corp., gave Anchorage Chamber of Commerce members their views on the outlook for housing and real estate at the chamber's weekly luncheon Aug. 23.

Fauske said Alaska missed the bullet on mistakes made by lenders that contributed to the national real estate meltdown, and that the state's economy is in a strong position relative to other states.

While Korting addressed the Anchorage market, Fauske's remarks reflected the situation statewide. Alaska's home loan delinquency and foreclosure rates are among the lowest in the nation, Fauske said. The national foreclosure rate is about 4.6 percent, and Alaska's is about 1.34 percent, he said.

Korting said about 3,000 residential home sales, including single-family and zero lot-line units but not condominiums, occurred in the Anchorage market area in 2009. That's down from about 4,500 units sold in 2006, which was during the era of easy bank money.

Sales are looking a little stronger so far in 2010, Korting said, but he cautioned that one federal one-time homeowner tax credit may have influenced buyers' decisions. It is still a little early to call it a turnaround, he said.

"Things went down from 2006 to 2009," but the city may see a turn this year, Korting said.

Condominium sales trends are similar to those of single-family homes and zero-lot line units, he said. Korting didn't have data for larger apartment units or commercial real estate, he said.

The average single family or zero lot-line unit sales price is $326,000 for the year to date, Korting said. Average 2010 condominium sales prices are $196,000 so far, he said.

The strongest part of the real estate market is the mid-range of prices, basically homes valued from $150,000 to $450,000. "It's still a seller's market," in this range, Korting said. Homes listed at this price sell more rapidly, and there is about a three to four month inventory at the current pace of absorption, he said.

Higher-priced homes, from $500,000 to $750,000 or more, face a softer market where it can take up to two years to sell.

"This is a small part of the market, however. We're only talking about 60 homes," in these price ranges, Korting said.

Overall, there is about a five- to six-month inventory of homes of all prices listed, which real estate experts consider a balanced and healthy market, he said.

The key to this is the economy. "It's all about jobs and employment," and Alaska employment is strong relative to other states, Korting said.

Korting and Fauske both see an uptick in new housing construction this year. Korting said new building took a dip between 2007 and 2009, and remodeling activity shot up, but now the trend seems reversed, with building of new homes increasing and remodeling declining.

The new construction is mainly being done by larger homebuilders, he said.

Fauske said there have been 148 new single-family home permits issued in Anchorage in the first half of the year, a 32 percent increase over the same period of 2009.

Fauske is bullish about the future because the state's resource-based economy is in relatively good shape, Alaska banks avoided the mistakes made by financial institutions elsewhere, and that the state of Alaska has the financial reserves to make strategic investments in the economy.

"We have more control over our destiny than other states do," he said.

The Legislature's action to help finance home weatherization, a program managed by Alaska Housing Finance Corp., is an example of how the state can help the economy, Fauske said.

Homeowners do an energy audit, invest in efficiency upgrades and receive a rebate from the state for part of the investment. So far the average homeowner rebate has been about $6,200, Fauske said.

The upgrades have resulted in average energy savings of $1,600 per year and a 30 percent reduction in energy used for home heating, he said.

Korting said Alaska is fortunate, but there is still worrisome uncertainties.

"The issue I sense is uncertainty. Generally people are optimistic and doing well, but there's still a little 'off,' a little unease," about the future, he said.

Tim Bradner can be reached at tim.bradner.@alaskajournal.com