"But isn't it dark all day during the winter in Alaska?"

When I first talk to people that are considering a move to Alaska and they learn that we actually do things during the winter they often will ask, "But isn't it dark all day during the winter in Alaska?" Not here in the Matsu Valley!  Are the days shorter this time of year than they are during the summer?  Of course, but they certainly aren't pitch black all day.  As a bonus, it creates some of the most extraordinary ambient light during the sunrise and sunsets that can be found on earth.

For many, the thought of moving to Alaska seems to conjure up fears of how dark it will/must be, especially during the winter solstice in the Matsu Valley.  From personal experience, I can tell you that was a concern of mine as well before we moved here years ago.  For many, the thought of being plunged into perpetual darkness the day after Labor Day Weekend is a very real fear.

In order to dispel some of those fears, and to further illustrate that not only is it not pitch black all day, it's always an adventure to get out and enjoy the day of the year with the least amount of daylight so we headed out for a hike to one of our favorite spots.

The skies were going to be clear and although the temperatures were only about 5 degrees above zero, I finally fulfilled a goal that I've had for a few years by hiking to the top of Bodenburg Butte (The Butte) at noon on the winter solstice.  Having made the hike 4 times out of the last 5 summer solstices at midnight to take in the day of the year with most amount of daylight, I wanted to see what it looked like at noon on the day of the year with the least amount of daylight.

Part of my mission was also to climb to the top of The Butte to gain a better vantage point in order to document for our incoming clients just how much of an impact the Chugach Range plays in casting a shadow across much of the areas that we serve.  For those that feel that they would go a little 'stir crazy' without having direct sunlight for a couple of months during the winter months, I felt it would be helpful to know how big of an area that the shadow actually covered.

As expected, we were in the shadow of The Butte when we arrived in the parking area and were even entirely covered by the shadow of Pioneer Peak once we made the summit.  Although it was daylight, there was no direct sunlight on the top of The Butte as the sun didn't quite get high enough to clear Pioneer Peak.   

As you can see by the photos, the shadows cast from Pioneer Peak and Twin Peaks of the Chugach Range extend across much of the Matanuska Susitna Valley.  The further north or west you go in the Matsu Valley, the better odds are that you will be able to enjoy direct sunlight during the winter, with the Chugach Range losing some height as well as angling more to the southwest allowing the sun to be out longer in those areas.  The sun was out for 5 hours, 27 minutes and 41 seconds the day of the winter solstice but it was certainly a beautiful day for a hike.  

The following video captures a 360 degree view from the top of The Butte.  It was shot at 1PM on the day of the winter solstice.  

The trail up the north side of the The Butte was a little icy in spots but we made it up and down without any falls.  Unfortunately with the low temperatures, our phone batteries were very short lived so we didn't get as many photos as we had hoped for but I think that you will get a pretty good feel for what it looked like.  

The views certainly were extraordinary and even our dog had a full day of exercise getting to the top of The Butte...he wouldn't have missed it for the world as it is one of his favorite hikes too!

After the trek to the top of The Butte, we stopped at Dairy Queen in Palmer to replenish some of the calories that we burned on the hike. As a bonus, the moon was just starting to come up over the mountains at about 3:21 PM and the Palmer water tower in the foreground made for a scenic photo too.  

Although this post doesn't contain much information about the Matsu Valley real estate market, it does shed some light (pun intended) on what life is like here...and we felt that it is important for you to know what it's like so that you can determine if it's a place that you would be comfortable living.

For information about the Alaska real estate market visit our website to find out how to turn this extraordinary area into the place that you too will be proud to call home!  If you have questions about the area feel free to call my office at (907)352-1828 or send an email to Greg@AlaskaHomeSellers.com.

Greg Shepard

Associate Broker

Jack White Real Estate Matsu

WHAT EFFECT IS THE FEDERAL RESERVE'S INTEREST RATE HIKE GOING TO HAVE ON HOME PRICES IN THE MATSU?

Many people are probably wondering, "What effect is the Federal Reserve's interest rate hike going to have on home prices in the Matsu?"

And as you might expect, the answer is somewhat complicated.  Mortgage interest rates are set by a number of factors, but a relatively good barometer is basing mortgage interest rates toward the 10 year US Treasury Bonds.  This link provides some insight to the 10 year Treasury and mortgage rate connection.  This week Forbes came out with an article discussing what is spooking home buyer's the most and the answer might surprise you. Here is a link to that article What is spooking today's homebuyers?

Since the Federal Reserve's announcement this week that they were raising their rate from 0% to .25%, the 10 year Treasury has actually went down slightly.  Stated differently, the increase in the Federal Reserve has not equated to an increase at all in mortgage interest rates.  Yet.

Treasury bonds are traded in the world market, and as such, are being compared to other country's bonds by investors. With the turmoil occurring in other regions of the world, particularly European countries, world investors seeking higher returns are looking elsewhere.

As a general rule of thumb, the Federal Reserve raising interest rates is a way to curb inflation which normally translates to higher mortgage interest rates.  So we'll continue to monitor this over the next year to see where this goes, but we expect a gradual increase in mortgage interest rates over this period.

In looking at the Year over Year numbers for home sales in the Matanuska Susitna Borough, there is something that jumps out as more of a factor for home prices into 2016 than an increase in mortgage interest rates.  The average price of home prices in the Matsu is up 6% Year over Year shown by the report below.

With an increase in the average sale price of 6% Year over Year, combined with an increase in mortgage interest rates of 1%, the monthly price difference is quite dramatic. Many home buyers are hoping for home prices to drop in order to get a better 'deal', but based on the report below, that train of thought results in considerable increased costs on a monthly basis, showing an additional cost of over $200 a month.  Over 7 years that equates to $17,623!

In addition to the loss by waiting, those renting in the Matsu might not know that the price of rent is usually much higher than actually owning when you take into account the added cost benefits such as principle reduction, appreciation, and income tax savings.  The worksheet below illustrates the difference between renting vs owning here in the Matsu Valley housing market.  

As you can see by the worksheet above, the actual cost of home ownership instead over renting actually results in an income to the home buyer of about $164 a month after the principle reduction, appreciation and income tax savings are factored in  Read that again...based on a very accurate model of the current Matsu real estate market, your home actually paid you $164 a month to live there given the example shown above!  

When you factor in the Cost of Waiting and Rent vs Own worksheets the total amount of money saved/earned is $198,929 over 7 years if all factors stay the same over that period.  

Can all of these factors change in future?  Unquestionably.  But based on the information that we are currently monitoring, this is a very accurate snapshot of what your housing needs would look like based on the averages currently found here in the Matsu Valley housing market. 

If you have questions about your specific housing needs, we can prepare a customized analysis for you based on your actual situation.  If you are in the market to buy, simply log on to our website to perform a search to see what the market is currently like.  If you have to sell your current home, you can log on to our website's selling page to find out more.  I will do a blog about that later in the week to show you what the differences in what doing that now looks like too.

You can always call our office to speak with us directly too at (907)414-9456, or email me at Greg@AlaskaHomeSellers.com

Have a great week!

Greg Shepard
Associate Broker/REALTOR
Jack White Real Estate Matsu Office