THINGS TO CONSIDER WHEN BUYING A HOME

The Winter Edition of "Things to Consider When Buying a Home" is available now.  With all the daylight that we are gaining now on a daily basis, all of us are probably experiencing a bit of 'Cabin Fever' and are anxiously awaiting the rapidly approaching Alaskan Summer!

For many, spring also means that the new home that they have been dreaming of starts to become an all consuming part of their daily lives.  Looking online every night to see if the 'one' has came on the market today, to even sneaking a quick peak during breaks at work.  If you are one of these, we have a booklet that we think that you will find invaluable.

Things to consider when buying a home

It is filled with information that answers so many of the questions that today's buyers have.  It covers all of these topics, plus so many more of the most asked questions of today's buyers:  

BUYERS: THE WINDOW OF OPPORTUNITY IS STILL OPEN

WHERE ARE PRICES HEADED OVER THE NEXT 5 YEARS?

HOMEOWNERSHIP'S IMPACT ON NET WORTH

We at Alaska Home Sellers feel that this is the type of information that buyers in today's world are yearning for.  While there are countless websites to find homes for sale, simply having access to the millions of homes that are for sale across the country doesn't answer the BIG questions that most buyers have.   And that's where we come in...we bring you through the process with an unbiased approach to educate you on what the best moves are for you based on your individual goals.

There is still plenty of time to grab a cup of coffee and spend a few minutes educating yourself regarding the 2014 real estate season.  All the early signs point to a very busy year!

If you would like us to mail you a copy, simply give us a call at (907)352-1828 or send us an email to Greg@AKHomeSellers.com and request "2014 Winter Buyer Guide".  

 

 

5 THINGS THAT YOU PROBABLY DON'T KNOW ABOUT VA LOANS

There are 5 things that you probably don't know about VA loans according to a blog post that I recently came across.  But I am going to add in a 6th because of it's importance...and with 10% of Alaskans being retired military, there are a lot of VA loans that are used to buy Mat-Su Valley real estate.  

This is a link to the blog post that I came across that very well summed up a couple of the myths regarding VA loans that many consumers have. 5 Things that you probably don't know about VA loans.  And while those 5 are quite valid, I think that there is a 6th thing that could apply here in Alaska as well with the high amount of disabled veterans.  And #6 could be one of the most important of all.  Did you know that if you have a service-connected disability of 10% or higher that you are exempt from paying the VA funding fee?

If you are an active member of the military or are a retired member of the military and are contemplating buying real estate in the Mat-Su Valley of Alaska, we work with competent lenders that can review your present financial position to analyze what loan program would work best for you.  

VA Flow Chart from Hawaii VA Loans

You can always visit our website to obtain an enormous amount of information on Alaska real estate.  You can shop for current homes for sale here or if you are curious as to what the value of your home is in today's rapidly heating market , you can fill out this short form to obtain an approximate idea from us.

We at Alaska Home Sellers feel that there is something BIG about to happen this year here in Alaska real estate!  We featured a post about it yesterday WILL 2014 PROVE TO BE THE YEAR OF GROWTH?.  

Stay tuned for further updates as this begins to unfold...

Greg



 

WILL 2014 PROVE TO BE THE YEAR OF GROWTH?

Will 2014 prove to be the year of growth?  We at Alaska Home Sellers absolutely believe it will be.  2013 proved to be the year of stabilization as investors purchased an enormous amount of the "low hanging fruit", including the thousands of foreclosures that were available.  They were compelled to enter the market and invest after they watched from the sidelines during much of 2012 to see if the bottom had indeed drawn near and the market would start to recover.  And when they jumped 'feet first' into the market over the last 12-18 months they substantially, and knowingly, reduced the remaining inventory (homes for sale) levels causing a rapid increase in values.  With real estate being a market like anything else, it is predicated on a "supply vs demand" principal.  The more demand there is for something, the price naturally increases on the remaining supply.  
 
In an ideal world, you would always like to buy at the bottom of a market and sell at the top...but all too often, when the consumer 'senses' the market has hit the bottom, it has already made it through the lowest point and has already started back up.  Conversely, when a seller 'senses' that the market is at it's peak and tries to time their sale, the market has often already started a downward trend.

The investors over the last 12-18 months have hedged their bets with a bit of 'insider trading' of sorts.  Knowing that the price of the housing would increase with a decreased supply, they purchased untold amounts of it with that knowledge.  In a way...they were hedging that bet by purchasing placing large volumes of real estate (in many cases entire blocks filled with empty housing) into their portfolios and renting them out knowing that their asset would gain almost instant equity by virtue of the supply vs demand dynamic.  They know that reducing the inventory increases the price. 

It's in large part why areas like Nevada have experienced phenomenal year over year appreciation as illustrated in map below compiled by FHFA's third quarter report in 2013.

The bi-product of their investing has had a pleasant side affect that existing homeowners have been able to take advantage of.  Rather than being subjected to a long protracted recovery, the investor involvement has accelerated the recovery exponentially.  As you look at the map above, you will see those areas that were hit the hardest during the housing bubble bursting, are recovering at a much higher rate than those areas that were least hit.  Investors aren't interested in single digit returns on their money...they are interested in the big returns! 

And with the values rapidly recovering, the number of mortgage delinquencies is on a sharp decline as well.  Homeowners over the last few years that were 'upside down' in their homes and couldn't afford to sell because they would have to bring a check to the closing table, are suddenly learning that the market has often recovered to a point where they can now sell and actually walk away with a check in many cases.  And voilà, delinquencies are dropping like a rock.  The following map is from the National Association of REALTORS from December 2013.

We at Alaska Home Sellers feel that there is an ENORMOUS amount of pent up energy with existing homeowners that would love to be able to move...maybe to a larger home due to an increase in family size, or that have job opportunities in another area but couldn't accept them due to their negative equity positions in their existing homes.  Not only do we feel that 2014 will be the year of growth, we are starting to see signs of it being larger than even the experts are predicting.  All of this teamed up with our post about the Boomerang Buyers a couple of weeks ago is further evidence that 2014 will prove to be the year of growth.  

 

Of course all real estate is local...and Alaska real estate is no different.  The Matsu real estate market is off and running for the year so if you have been sitting on the sidelines trying to decide what to do, this might be your year to make the move that you have been dreaming of.  

There is no substitute for competent counsel and advice when it comes to making decisions regarding large financial matters.  If you are curious how the local market is impacting you and would like to get our professional advice along with a customized analysis based on your individual real estate goals, you can call our office at (907)352-1828 to set up an appointment to discuss them.  

WHERE ARE INTEREST RATES HEADED IN 2014?

Where are interest rates headed in 2014?  That is one of the questions that we are often asked and it isn't an easy guess.  At Alaska Home Sellers we keep a watchful eye on not only what the local real estate market is doing, but combine it with forecasts from many local, state and national economic and financial reports to help our clients to better understand what it all means to our clients.  We do not have a crystal ball as to what the future holds, but we like to keep our customers aware of the factors in the marketplace that could have a bearing on their decision making process.  

The following information was pulled from a real estate blog that we watch:

"Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end.

The Fed announced last month that they would be pulling back some of their stimulus package which has helped the housing market by keeping long term mortgage rates at historic lows for the last few years. This should come as no surprise as the real estate experts have been warning of this likelihood over the last several months.

Above are the most recent projections of where rates will be at the end of 2014 by the four major agencies. However, we believe that the government is not afraid to shoot right past these levels.

Doug Duncan, chief economist for Fannie Mae, this past summer announced: “I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”

And Frank Nothaft, Freddie Mac VP and chief economist, at virtually the same time explained:  "As the economy continues to improve, we expect to see continued upward movement in long-term interest rates… At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.”

Only time will tell. However, we feel that rates will be in the 5.75-6% range by year’s end."

Our personal opinion at Alaska Home Sellers is that there are monetary policies in place at the Federal Reserve that will keep mortgage interest rates at or near their current levels for much of the remainder of 2014, and would be very surprised to see them hit the 5.75-6% as stated in the blog.

As a Residential Finance Consultant (RFC) we have the tools to evaluate your personal situation to help answer the big questions:

• How's the market?
• Should I wait to sell my house?
• Is now the right time to buy?

To obtain a customized report created with your specific goals, give us a call at our office at (907)352-1828.  To find out an approximate idea as to what your home's value is in today's market, fill out this short form.

We have a tremendous amount of information on our website at www.AlaskaHomeSellers.com.  You can find information on communities, local schools, etc on there.  


We help clients understand the tax advantages, financing alternatives, and investment aspects of home ownership and why now is an incredible time to buy!

http://alaskahomesellers.blogspot.com/

WHICH REMODELING PROJECTS PROVIDE THE HIGHEST RETURN IN 2014?

Which remodeling projects provide the highest return in 2014?  Every year about this time there is a report that comes out from "REMODELING" magazine that illustrates some of the most common remodeling projects and their relative return on investment.  This year there are 22 different projects that were rated on 'mid-range' homes and 13 more on 'upscale' homes.  The National results can be found here.  This is a "good news/bad news" report.  The good news is that the results all show positive growth over their return on investment (ROI) when compared to their ROI from last year's report.  The bad news is that there are none that yet yield a positive ROI based on a National average.  

What does that mean?  It means that just because you decide you want to make some improvements to get your home ready for sale, it doesn't necessarily mean that you will get all of the money that you invested back.  For example, the national report shows that a basement remodel that costs $62,834 averaged a $48,777 return or only a 77.6% return on investment.

The news does get better however when you go to the Regional Data for the Pacific Region.  The results of the Pacific Region's ROI have 7 of the 22 projects on 'mid-range' homes showing at least a break even proposition.  The results of the Pacific Region's report can be found here.  A new steel front door will yield a 113% ROI and a new wood deck will yield a 109% ROI.  Only one project was able to yield a positive ROI on the 'upscale' homes and it was a garage door replacement with a 104% ROI.  

On a more local level, the closest community to us here in the Matsu Valley is the city of Anchorage.  Surprisingly, even with the housing market having a pretty good year in Anchorage, the reports show that last year's returns were better than this year's report.  The Anchorage report can be found here.

They also have some informative videos this year to help illustrate the purposes of the report. 

It's always this time of year that we talk to prospective home sellers and they often tell us about all the projects that they have done over the last year...and how much more they expect to get as a result of them.  Unfortunately, we have to then show them that the $10,000 project that they took on might only get $8,000 back.  

That all said, if you are thinking of taking on a remodeling project with the plan of selling in the near future, we need to schedule a time to meet and discuss them to really determine if they are projects that need to be done...or projects that should be left for the new buyer.  

To find out what your home is worth in today's market you can fill out this short form on our website.  For other questions on the state of the real estate market in the Matsu Valley, visit our website at www.AlaskaHomeSellers.com or call our office at (907)352-1828 to discuss your remodeling project plans to determine if they are right for you.  

Have a great weekend!  

Greg
 
© 2014 Hanley Wood, LLC. Complete data from the Remodeling 2014 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.

ALASKA BOOMERANG BUYERS ARE TAKING AIM AT THE HOUSING MARKET

Alaska Boomerang Buyers will be taking aim at the housing market over the next 2-3 years and if you aren't familiar with the term, you will soon start to hearing more and more about it.  The impact of the Boomerang Buyer is we are seeing a strong Seller's market here in the Mat-Su Valley and the inventory supplies are low in the most popular price ranges.  

For current information on homes for sale in the Mat-Su please click Mat-Su Homes for Sale or if you would like to find out how the Boomerang Buyers entering back into the market can impact your home's value, Click Here and fill out a short form.

A "Boomerang Buyer" is someone that has lost a home through the foreclosure process or other credit damaging event, and is working on repairing their credit (and in many cases already has) and wants back in to the home ownership arena.  The following illustration is from AfterForeclosure.com and highlights where we are currently at in the recovery process for those buyers and is an absolute bright spot for the real estate market in the coming years.  

There is also a very informative article on their webpage that you can read here 2014 Needs the Boomerang Buyer.  

Why do we at Alaska Home Sellers feel that it is especially applicable here?  We have seen an influx of in-migration into the state over the last few years as the employment opportunities here are greater than where they are moving from.  Many of the residents that have moved here over the last 3-5 years did so to seek a better financial environment, but due to the financial hardship where they were at either have a foreclosure, a short sale, or a deed-in-lieu of foreclosure and have been forced to rent once they arrived here.  

For many of our new arrivals, they fit the above illustration to a "T" and we are already starting to see evidence of them coming back into the housing market.  Something that the illustration doesn't address is how they will view the current interest rates.  Don't think for one minute that it went under their radar when interest rates were around 3% a year ago!  But for many, they were helpless to do anything due to the prior blip on their credit.  If you also think back to where we were at in 2006 when the housing market started it's collapse, interest rates were around 6.5%.  At 6.5%, it was still well below the 40 year average, but yet it's nearly 50% higher than where they are at today.  The following graph represents a snap shot of mortgage interest rates dating back to 1971 from Freddie Mac's Primary Mortgage Market Survey and compiled by www.calculatedriskblog.com.

What does all of this all mean?  

We are convinced that not only did we see a substantial increase in the number of transactions last year in the Matsu Real Estate Market, but it was also combined with a healthy 2% increase in average pricing.  We feel that as the Boomerang Buyers continue to gain financial traction, that they will put even further downward pressure on the declining inventory levels locally, creating an even larger increase in pricing in 2014.  

We also know that there are buyers that opted out last year thinking that mortgage interest rates were going to stay around where they were, and hoped they might even go lower.  But that have now realized that the "Mortgage Interest Rate Horse" is out of the barn and may be nearly impossible to put back in.

You can obtain real estate market information on the various communities in the Matsu Valley in Alaska by visiting this link Wasilla, Alaska Housing Market Insider Data.  Based on the last quarter of 2013, it appears that the trend is clearly toward higher pricing in 2014 as you can see by the illustration below.  Once there you can enter other zip codes in Alaska that you would like to obtain similar data on as well.

We see some definite trends starting to emerge as we hit the 2014 season and welcome you to come back to gain valuable local information presented in a logical format that you can use to determine what the best options are for you.

For current information on homes for sale in the Matsu please click Matsu Homes for Sale or if you would like to find out how the Boomerang Buyers entering back into the market can impact your home's value, click here and fill out a short form.

You can visit our website at Alaska Home Sellers or call our office at (907)352-1828 to privately discuss your real estate goals.

   

TO SELL...OR NOT TO SELL...THAT IS THE QUESTION

To sell...or not to sell...that is the question.  There hasn't been a period in my 20+ year history as a real estate broker where potential selling clients ask that question more then they have in the last 2-3 years.  Not necessarily in the 'Shakespearean' sense, but some variation of it.

In today's world it's not uncommon to find 2 completely opposite, contradictory opinions on the state of the real estate market on the same day, and in the same newspaper or news program.  And when that happens, the resulting effect is mass confusion for anyone that is thinking of buying or selling.  The following illustration from CoreLogic is a good example of it.  Reading the left hand side might lead one to believe that the current real estate market is pretty dire.  But if you continue onto the right side, it starts to look better on the top half.  But it isn't until you get to the bottom right hand corner, that you see that there is only one state ahead of Alaska as it relates to the number of homes with the highest percentage of having some equity...meaning that the home is worth more today than what is owed against it.

Sherri and I view our roles a little different than many others in the industry in that rather than putting a 'hard sell' on a customer to buy something, right now, today, our approach is more like an adviser rather than a pushy real estate agent.  We believe that while it is important for a client to know and fully understand what is happening in the local real estate market, it's when we then combine that knowledge with an overview as to what is happening in the national and world wide financial worlds, teamed with the local and statewide economic forecasts, that all of these factors have a cumulative impact on the client's decision making process. 

In case you might have missed it, the stock markets have blossomed since the crash in 2008 and the DOW has hit new record levels multiple times over the last year.  Many of the reports of the real estate market over the last few years have often been portrayed it in a negative light.  But the following graph from MSN Money.com and Case Shiller, illustrates how it has fared relative to the stock markets over the last 13 years.

And the National Association of REALTORS® recently produced a graph illustrating what they are projecting for the coming year.  

 

Because there are literally countless real estate websites that have information on homes for sale, it becomes completely overwhelming for most consumers.  That's why we focus on providing advice and counsel for the really big questions that our clients have that aren't so easily found on-line.   

We've found what most clients really want is someone who can...

1.  Analyze all the available information

2.  Connect the dots and let them know if now is a good time to buy or the right time to sell based    on their goals

3.  Take the time to explain their options—simply and effectively
 
Our approach is actually quite simple.  Overall, information being readily available (without context or understanding) causes confusion...and that’s when people seek out professionals. Whether it be a doctor, lawyer, or a real estate professional, for a thorough analysis of the information based on their unique situation.  Because of the wealth of information available, we believe people are yearning for expert advice...tailored to their individual needs and goals, and not some canned "cookie-cutter" reply.
 
If you feel this type of information is valuable, make sure to subscribe to our blog and keep checking back as we will be posting much more over the coming weeks as we head into the busiest season of the year.  For more, you can visit our website at Alaska Home Sellers, "like" our Facebook page here, or simply call our office at (907)352-1828.


Let us know what your "big" questions are...we're here to help.