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PUBLISHED: 4:57 PM on Wednesday, February 20, 2008
Juneau 2007 home sales return to 2005 level, prices remain up
Juneau home sales were down in volume, up in sale price in 2007, compared to 2006's torrid pace. But both volume and price were up to the strong 2005 sales year and again far exceeded 300 total units.

That's the summary of data gathered this week from the Southeast Alaska Multiple Listing Service of homes for sale.

Because of real estate's importance to local economies, the Capital City Weekly is looking into what's positive about Southeast real estate compared to markets struggling down south.

At the CCW's request, Larry Spencer, broker and owner of Spencer Realty in Juneau, has spent some time evaluating real estate trends in Juneau through the local MLS.

"My general take is that 2007 was a banner year in real estate for total sales," he said.

There were 197 single family homes sold in Juneau in 2007, compared to 217 in 2006 and 191 in 2005, according to MLS data Spencer provided. The Juneau MLS Board has designated Spencer its spokesman for MLS questions.

"Although 2007 was 19 percent down in total sales from 2006, it was in line with traditional market sales in Juneau (2005 was also 19 percent down from 2006). Attached homes were the only class of residential real estate that total sales were at a 3-year low in 2007."

However, Juneau real estate prices have not decreased and in fact have risen albeit at a slightly slower pace in 2007. That is in sharp contrast to down-South markets that have seen double-digit declines.

"Despite all, the median and average price of home sales has continued to increase in 2005, 2006 as well as 2007 in nearly all categories," Spencer said. "2007 was a banner year for increases for single family (homes) and condominiums."

The average price for single family home sales in Juneau in 2007 was $343,168. The median price was $336,000 in 2007. That's an increase on average sale prices of 5 percent from 2006, which was flat to 2005 averages.

The average of all residential sales, including apartments and condos, was $292,467 and the median $281,000. And again, the average was up 5 percent to 2006 and 7 percent to 2005.

One category--attached homes--did show a significant drop in 2007, down from 95 sales in 2006 to 57 in 2007. These are zero-lot-line homes that were very popular with builders and buyers in the 1980s and represent a significant portion of homes in the Mendenhall Valley.

Competition may have affected this category more in 2007, Spencer said.

"There were a whole lot of new condos built in that period, that were priced competitively," he said. "These were two- and three-bedroom larger units, with multiple baths, garages, other amenities, and priced from $227,000 to $270,000. And they were new."

In 2007, 75 condominiums were sold in Juneau, compared to 71 in 2005 and 95 in 2006. Sales returning to 2005 levels, at higher prices, is a positive sign, he added.

Home prices continuing to increase in Juneau is a reflection of savvy homeowners taking good care of their biggest investment, and buyers demanding more for their dollar, he said.

"Just as people are doing in other investments, people in their real estate investment are being selective in quality. When you have a home in good condition, the kitchen in better shape, carpets, walls newly-painted, that the owner has shown care of years, it's reflected (in the selling price)."

Home improvements can earn the seller more, but won't necessarily be reflected in the appraisal.

"Replace all the plumbing, for example, didn't increase appraised value.

"Most people are looking not for homes as speculative investments, but as a place to live," he added. As a result, they are looking for solid features that will retain value.

"I'd call it a flight to quality," Spencer said. "Good floor plans, views, good neighborhoods, updated interiors-these are all things buyers are looking for. We have a very stable work force of well-compensated people and that's what they are looking for."

Homes holding their value also reflect a generation of inspections on home sales, he said.

"Starting about in 1988, that was when engineering inspections came into Juneau, and sellers started doing repairs (as part of closing). The advantage since 1988 is that we've had 25 years of repairs every time a house turns over. That's a substantial advantage to our basic housing market.

"The other part that is interesting is that these stats do not reflect the entire market (do not include for-sale-by-owners."

Current MLS inventory, in Juneau this week, includes 129 total properties are for sale. Back in 2005 it was down to 80, Spencer said.

That total includes 84 single family and single family/attached apartments, plus another 36 condos and 9 attached homes.

There are two peaks in the local real estate market, Spencer said, covering the months of March-May and August-September, so it's likely to see both sales and inventory to change in the coming months.

More choice is a great incentive for potential buyers, Realtors and financial institutions agree.

"One of the major improvements is in previous years there were only a few choices available to home buyers and now they actually have choice," Vickie Perry, branch manager of Residential Mortgage in Juneau. "You hear people commenting about our housing market being flooded, but really it is all about perception. As mentioned, a few years ago there were only a few choices which made Juneau a tight market, whereas now we are closer to a typical market which offers more choice."

"Beside more inventory, affordable financing is still a powerful incentive for buyers, Perry said.

"Interest rates are close to another historical low and there are still loan programs available to suit most borrowers. There are still Zero Down Payment options available, as well as No Mortgage Insurance options."

"2006 was a banner year. You can't deny that," Spencer said. "I'd say we're looking at more rational sellers and rational buyers.

"And a larger inventory in MLS provides more choice for buyers. I'd call 2007 a healthy market."

Next Week: Real estate trends in other Southeast Alaska communities.

Leschper is general manager of the Capital City Weekly and advertising director of the Juneau Empire. Email him at lee.leschper@morris.com.


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