Take a Trip Around the U.S. Housing Market
It’s cold and windy and although spring is just around the corner, it doesn’t really feel like it so let’s take a break from our local housing market and head down south to see how the rest of the country is fairing when it comes to home values and appreciation. It’s hard for Alaskans to get anywhere in the lower 48 without going through Seattle which has a hot housing market. Prices in Seattle rose 12% last year. The average price of a home is $410,000 thanks to growth in population and jobs. According to a recent article in Forbes Magazine, “Builders aren’t able to keep up, which is why home prices have increased rapidly and rental demand will be strong.” This same sentiment is echoed by Hultquist Homes, which is headquartered in Anchorage, and has new homes going up in Sunrise Meadows in Kent, Willow Place in Auburn and Brook Tree Estates in Carnation.
Further south, Phoenix and its outlining communities, is a popular second home destination for Alaskans. Home prices gained 7% in Phoenix last year and job growth was 1.8%. In general, the population growth in Arizona grew 5.7% from 2012 to 2015. My Japanese-American family lives in a suburb of Phoenix and I should have bought a new condo for $32,000 during the last real estate recession but I didn’t. Oh, well.
Due to our oil industry, we have a lot of transplanted Texans in Alaska and many of them buy homes after they recover from the sticker shock of our prices. In Dallas, homes are considered undervalued compared to historic averages and local income. The average price of a Dallas home is $233,000 compared to Anchorage’s $364,000. No wonder some recent transplants are looking at townhouses and condos in Anchorage rather than the 2,400 square foot single family home. Forbes projects a 9% annual home price gain for Dallas, propelled by population growth and a 3.9% gain in jobs last year. Fort Worth, Texas, has an average price of $206,000 and gained 9% in value in 2016. Both cities are considered good markets for investing in residential real estate.
So now let’s head southeast to Orlando, Florida, where the International Builder’s Show has set up their annual convention for 2017-2019. The average sales price in Orlando is just $219,000 where in West Palm Beach, Florida, it is a robust $313,000. All of Florida, including Naples, Orlando, Palm Beach, is most likely going to benefit from appreciation because of its high profile and headline grabbing second home citizen.
Back home in Alaska, we have an active and flat market with little or no appreciation in 2016 and none projected for 2017. Interest rates took a bump up this past week to 4.35% for a 30 year fixed rate. Many buyers are headed towards a 15 year amortization or higher down payments to offset the increased interest charges. Inventory remains at historic lows and resale properties in good condition are hard to find. New construction remains damped down as developers and builders continue to struggle with the new Title 21 Regulations. Despite all that, I’m always glad when the plane lands in Anchorage, despite the sometimes bumpy descent. Outside is nice but it’s not home.