Housing market heating up

Increased oil and gas activity are driving the central Kenai Peninsula real estate market, according to local realtors.

“Overall, we’re seeing an increase in productivity, we’re seeing an increase in interest,” said RE/MAX real estate agent Glenda Feeken. “We’re so much more positive than we were this time last year.”

Real estate sales are up on the central peninsula compared to last year, Feeken said. In Kenai, there have been 10 sales so far in 2014, compared to seven during the same time period in 2013, according to MLS data. For the Kalifonsky Beach area, there have been 10 sales so far this year, compared to five in the same period of 2013.

“When we have jobs and we have interest in jobs and we have the oil companies here, that drives our economy,” Feeken said.

In the past year, 435 properties have sold, with price ranging from $22,900 to $950,000. Most of the prices are below $400,000.

“Our market is getting stronger, by far,” Feeken said.

Realtor Mark White said it’s still a buyers’ market, with activity focused especially in the Nikiski area. Commercial activity is largely driven by the resource industry, White said.

He pointed to new structures in North Kenai and Nikiski that service the oil industry as the primary growth for commercial real estate and the main new buildings on the central peninsula. White said that other resource industries, like mining, also are supporting the real estate market as companies prepare for potential new mining projects that could be serviced by businesses on the Kenai Peninsula.

“If they do anything with the gas, we’ll see this probably really take off,” White said.

White said there’s also been commercial real estate growth in Soldotna, although he couldn’t elaborate on the specific business changes there, but said it’s on the way.

“We’ve seen some interesting commercial stuff developing here in Soldotna.”

Property values in North Kenai also are on the rise, likely related to the heightened interest in the area in general, Feeken said.

According to MLS data she provided, in 2004, 24 North Kenai properties sold, with an average price of $129,000. In 2013, there were 45 sales, with an average price of $184,173, the highest in the past decade. That was a rebound from 2008 and 2009, when sale numbers and prices dropped.

Sterling has seen some of the largest growth in sales prices. The average price doubled from 2004 to 2013, hitting a high of $134,769 last year. That year, 68 properties sold.

Sales numbers have been steadier in Kenai, with increasing prices. In 2004, there were 86 properties sold, with an average price of $133,671. In 2013, there were 75 sales, with an average price of $195,015. That’s down slightly from 2012, when the average price was $206,738, the high of the decade.

In the K-Beach area, prices are still lower than they were in 2008 and 2009, the peak for that region. In 2013, 81 properties sold in the area, down from a high of 102 in 2007, but more than 2010 or 2011.

Soldotna sales were down slightly in 2013 compared to 2012 in price, although the number increased.

Ridgeway also has seen steady sales, but a significant value increase. In 2013, there were 38 sales, the highest since 2006, when 39 properties sold. The average price was $286,331, higher than any year prior.

Those numbers are all sales prices. Borough data on assessed property values for 2013 is not yet available.

Feeken said some of the variation between areas can be attributed to industries in each community. Soldotna is more dependent on sport fishing and tourism, while Kenai sees more commercial fishing and oil employees, including some who work abroad. North Kenai tends to parallel the oil industry most directly, she said.

Not every area is as strong, however, Feeken said. Riverfront property is not a major driver of real estate transactions, she said, and generally those purchases are second-home purchases and tied more to tourism-related fishing. Homes there typically sell much more slowly, as well.

In 2013, 13 riverfront properties were sold — although one of those transactions is still closing — with prices ranging from $295,000 to $950,000, Feeken said.

Future activity is likely dependent on the oil and gas sector staying strong, White and Feeken said, noting that whether changes to the oil tax regime are repealed will affect future growth.

Feeken said she’s been a real estate agent on the Kenai Peninsula since 1988, and this is the best the market has been in 10-15 years. There are local jobs, little rental availability and increasing prices.

“Probably this is the most enthusiastic I’ve seen the market in a very long time,” she said.

Molly Dischner is a reporter for the Alaska Journal of Commerce. She can be reached at molly.dischner@alaskajournal.com.