Written by Matthew Lindsay
As many of you may have heard, the current market is going crazy! Homes are being sold for more than their asking price, at faster rates, and at higher volumes than ever before.
If you’re a buyer, the likelihood of you competing with other offers is much higher than previous years. However, sellers are getting multiple offers, demanding a premium, and not offering many of the traditional concessions that have been seen in the past. With how hot the market has been, we have even seen buyers willing to bring cash to the table above what the appraised value is.
The graph below indicates that this time last year, sellers were only getting about 97% of their list price. Today, most sellers are taking their full asking price or more! That graph below has been pulled from the Alaska Multiple Listing Service and shows an average of all sales over the last 12 months. This shows that many sellers are getting offers on their homes that are well above the asking price.
Alaska Economist, Rob Kreiger, wrote in the latest issue of the Alaska Economic Trends publication that, “the number of loans for single-family houses climbed 13 percent over the year, and the total dollar volume grew 20 percent. Average sales prices rose as well, by 6.4 percent over the year to reach nearly $357,000.”
Kreigers statistics were for Alaska as a whole. However, when looking at single family homes in Anchorage, the average sales price last year rose to $388,603, which was still an incredible increase of 5.95% over the previous year. Not only did we see increases in sold prices, but we also saw 20% more sales, and an almost 20% drop in days on market for active properties before they accepted an offer.
The graph below was sourced from the Multiple Listing Service.
In 2020, we saw record low interest rates! Low interest rates make more homes affordable for buyers because they are spending less on interest throughout the life of the loan, and are therefore able to afford more on the principal paid. If a buyer pays $100 less in interest per month, they will be able to afford $100 more in principle. That factored over 12 payments per year and a 30 year mortgage can make a huge difference.
Kreiger went on to state that “Low interest rates were mainly what brought housing to its most affordable levels on record in 2020, despite rising sales prices. Affordability varies significantly by area, as sales prices and wages also differ.”
What does this mean for you?
If you have ever considered selling your condo or single family home, there isn’t a better time than now to make that happen! We are seeing some of the highest selling prices for homes than ever before, making this the perfect market for sellers. Even if it's a far off thought, feel free to reach out and we can talk about strategy and what the market would be able to get for you!
- Matthew Lindsay, Founder of Precision Home Group
If you are interested in buying or selling with Matt, or want to learn more about his venture in becoming a Realtor and starting Precision Home Group, contact him at 907.302.1011, or by email at firstname.lastname@example.org.
Precision Home Group is based in Anchorage, and provides real estate services to Southcentral Alaska. We will keep you informed on current trends and market dynamics to help you make the best informed decision. If you are interested in purchasing a home, get in touch with our experienced real estate agents! Our team of experts will negotiate great deals for your home and help you navigate the buying or selling process every step of the way. If you are looking to get into a property that makes sense, or need help analyzing a potential property, reach out at 907.302.0024.