"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

IS NOW THE TIME TO SELL MY ALASKA RENTAL?

Is it time to sell my Alaska rental home you ask?  Many homeowners over the last few years have opted to rent out their homes rather than sell them as they didn't have enough equity to sell without having to come to closing with a check.  For those homeowners that were 'upside down' or 'underwater', as it is commonly referred to, renting the home was an acceptable alternative.

 

If you have a home in Alaska and are curious about the value CLICK HERE for a fast easy evaluation. 

We at Alaska Home Sellers feel that there are a couple of things that you might want to consider.  If your goal was never to become a permanent landlord there are some timelines that you don't want to overlook.  And if you have lost touch with the current values of homes in the Mat-Su, it might be time to revisit the idea.

For many because they couldn't sell before they moved, they have been forced to rent at their new destination because they had always hoped that there would be equity in their home that they could carry forward to use to purchase their next one.  For many that have left the state of Alaska and have moved to the lower 48, they may also want to factor in what the appreciation rates are in their new state to help determine if selling here (albeit not as much as they hoped) might be a good financial move in order to to purchase sooner there.

For many that purchased at the peak of the market in Alaska in 2007-2008 and then tried to sell in 2011-2012, they found that their properties hadn't appreciated enough to cover the costs associated with selling.  Many then opted to rent it out and cross their fingers and hope that the market would come back.  If you have been wondering if now is the time to sell your Alaska rental, it could just be....but more on that shortly.

Did you know that the IRS has specific rules about the length of time that you can be out of your primary residence and still be excluded from a capital gains tax?  IRS Publication 523 has a wealth of information that you need to know about if you are one of those homeowners that rented out your home over the last few years.  In it there is a section regarding "Ownership and Use Tests" and that is the section that you might want to pay particular attention to.  It reads:

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

• Owned the home for at least 2 years (the ownership test), and
  
• Lived in the home as your main home for at least 2 years (the use test).
  

What does that mean?  Here are some examples that it gives: 

Example 1—home owned and occupied for at least 2 years.

Mya bought and moved into her main home in September 2011. She sold the home at a gain in October 2013. During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. She meets the ownership and use tests.

Example 2—ownership test met but use test not met.

Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. He later sold the home for a gain in June 2013. He owned the home during the entire 5-year period ending on the date of sale. He meets the ownership test but not the use test. He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion.

Period of Ownership and Use

The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time.
You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. 

For a homeowner that rented out their home for the last couple of years because they couldn't afford to sell, now could be faced with a capital gains tax on the proceeds of the sale if they have waited too long and no longer can meet the Ownership and Use Tests.

Many homeowners may not have kept a close pulse on the real estate market in Alaska after moving and may not know that property values have been on the increase, and particularly so over the last year. CLICK HERE for a look at Sold vs. List Price.  We pulled up 99654 for this example.  To find out another area, simply change the zip code to find out info about the area you are interested in.

If you have a home in the Matsu Valley that you have rented out because you were upside down, the environment hasn't been better in years to reanalyze your position and determine if now is the right time for you.  If you are getting to a point where time is of the essence, you will also be happy to know that approximately 1/3 of the pending home sales have occurred within 10 days at the moment, as buyers are scrambling to purchase before someone else beats them to it. Take a look at current listing prices here.

If you are curious as to the current value of the property, you can fill out this short form to obtain an approximate idea as to what it's worth.

As it relates to tax matters, we always recommend discussing the tax ramifications with an accountant or other tax professional in order to find out how it will impact you. 

Homes for Sale in The Ranch Subdivision and Creekside at The Ranch Wasilla, Alaska

Homes for Sale in The Ranch and Creekside at The Ranch Subdivision Wasilla, Alaska

Looking for a home in The Ranch or Creekside at The Ranch Subdivision?

If you are interested in finding a home for sale in The Ranch and the new Creekside at the Ranch Subdivision of Wasilla, AK please click on the link for immediate information about homes for sale.  If you would like to know a bit more about the neighborhood I have included a few facts and links that may be helpful for you. 

Why Do People Live in The Ranch and Creekside at the Ranch Subdivisions?

The Ranch and the new Creekside at The Ranch addition is a large neighborhood of single family homes, situated between the cities of Palmer and Wasilla, AK and located within a short distance of the Parks Highway. One of the big draws to this neighborhood is the proximity to the Machetanz Elementary School and of course the gorgeous neighborhood and beautiful surroundings.

What's the Neighborhood Like?

The homes you would expect to find for sale in The Ranch and Creekside at the Ranch Subdivision are generally going to range between 1460 and 4713 square feet. Most of the homes were built starting 2005 to 2014.  The typical configuration is mainly 3 to 5 bedrooms and 2 baths. The lots are approximately a little less than an acre to almost a full acre, most being at around 1/2 acre.

What's Going on Nearby These Subdivisions?

The Ranch and Creekside at the Ranch is conveniently located just off the Parks Highway between Palmer and Wasilla, Alaska and it is an excellent commute location to Anchorage and JBER.  Mat-Su Regional Medical Center is close by as well as big box discount shopping areas, most chain fast food establishments, as well as the local movie theater within 10 minutes. In addition we have a wonderful collection of local favorite restaurants, including Locals.  Find out about The Ranch and the surrounding area's community information including banks, schools, shopping and what the community statistics are at my web page.

What Schools are nearby?

If you buy a home for sale in The Ranch Subdivision and Creekside at The Ranch of Wasilla AK, the local schools serving this area are Machetanz Elementary School as well as Colony Middle and High School. To get local school scores and more information about these schools check out the Wasilla school reports on my website.
Because the area is in a growth phase sometimes school boundaries change, so you will need to reconfirm this.

Now You Really Want to Find a Home Here, Right?If you are interested in the current homes and lots for sale in The Ranch Subdivision and Creekside at the Ranch of Wasilla AK click on the link. Our 'for sale' property information is a direct feed from the Alaska MLS and is updated multiple times per day.

To Search for Homes in the Palmer, Wasilla, Houston and other areas please visit my site.

Alaska Real Estate is in a Stong Seller's Market

Alaska Real Estate is in a Strong Seller's Market.

The supply and demand ratio has tipped in the odds of the seller.  If you are curious what your home value is PLEASE CLICK HERE FOR MORE INFORMATION

Future House Values? Simple as Supply and Demand
For some time now, we have attempted to shed light on the fact that pricing in today’s real estate market, as it is in the markets for every other saleable item, will be determined by the concept of ‘supply and demand’.

According to dictionary.com:

“The relationship between supply and demand determines the price of a commodity. This relationship is thought to be the driving force in a free market.”

In real estate, supply and demand is represented as the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

• 1-4 months supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
• 5-6 months supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
• 7-8 months supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, home values are rising. This is for two reasons:

1. According to NAR’s latest Existing Homes Sales Report, raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.
2. According to this month’s Pending Sales Report from NAR, houses going into contract reached levels last seen in April 2010 which was the month the Home Buyers' Tax Credit expired.

This has resulted in a 4.2-month supply at the current sales pace which is the lowest housing supply since April 2005 when it was also 4.2 months.

Based on the table above, we can see that the supply/demand ratio is leaning toward a sellers’ market where prices will appreciate. That has created positive movement in housing values in most parts of the country.

DO YOU KNOW WHAT THE COST OF WAITING WITH PRICES ON MAT-SU VALLEY HOMES AND RATES ON THE RISE?

Do you know what the cost of waiting with prices on Mat-Su Valley Homes and Rates on the rise?

We, at Alaska Home Sellers, have often broken down the opportunity that exists now for Millennials who are willing and able to purchase a home NOW... Here are a couple other ways to look at the cost of waiting.
Let’s say you're 30 and your dream house costs $250,000 today, at 4.41% your monthly Mortgage Payment with Interest would be $1,253.38.
But you’re busy, you like your apartment, moving is such a hassle...You decide to wait till the end of next year to buy and all of a sudden, you’re 31, that same house is $270,000, at 5.7%. Your new payment per month is $1,567.08.

The difference in payment is $313.70 PER MONTH!

That’s like taking a $10 bill and tossing it out the window EVERY DAY!
Or you could look at it this way:

• That’s your morning coffee everyday on the way to work (Average $2) with $12 left for lunch!
• There goes Friday Sushi Night! ($80 x 4)
• Stressed Out? How about 3 deep tissue massages with tip!
• Need a new car? You could get a brand new $22,000 car for $313.00 per month.

Let’s look at that number annually! Over the course of your new mortgage at 5.7%, your annual additional cost would be $3,764.40!
Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining.  We could come up with 100’s of ways to spend $3,764, and we’re sure you could too!
Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $112,932, all because when you were 30 you thought moving in 2014 was such a hassle or loved your apartment too much to leave yet.
Or maybe there wasn’t an agent out there who educated you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready, but if they showed you that you could save $112,932, you’d at least listen to what they had to say.
They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now…
Agents: How are you preparing to help Millennials understand the opportunity available TODAY by become homeowners? Watch a free replay of our most recent webinar, "Spring Ahead in 2014: KCM's Action Plan for DOMINATING the Spring Buyers' Season" to find out the steps you need to take!

Wasilla Alaska Real Estate for sale... But don't blink or that home will be gone

Wasilla Alaska Real Estate for sale ...

But don't blink or that home will be gone

In keeping a watchful eye on the state of  the Wasilla real estate market, something has really stood out as of late.  Homes are selling....and fast.

We thought that you may like to receive an update on the Wasilla Market that doesn't appear in the Market Insider information that you receive, and that is the percentage of homes that are currently under contract and how many of them have sold within 10 days.  Of the 211 homes that are pending today, 20 of them sold in less than one day!  There are a lot of multiple offers on homes right now as a result of the frenzy that we are experiencing.    

Here is the breakdown as of 5-2-14:

        PRICE                     # OF PENDING SALES               % SOLD IN LESS THAN 10 DAYS

$100,000-$150,000                           18                                                       55

$150,000-$200,000                           43                                                       37

$200,000-$250,000                           54                                                       35

$250,000-$300,000                           34                                                       32

$300,000-$350,000                           26                                                       23

$350,000-$400,000                           21                                                       33

$450,000-$500,000                            7                                                        43

$500,000 and higher                           2                                                          0