PUBLISHED: 11:12 AM on Wednesday, July 18, 2007
Juneau facing a buyer's market
A change in Juneau's residential real estate market puts home buyers with enough for a down payment in a good position.

Boat parking, a three-car garage, washer and dryer, professional landscaping, free airline tickets.

Those are the varied and lucrative carrots home sellers in Juneau are dangling in front of prospective buyers in a market with a lot of inventory.

Throughout the capital city, agents are reporting slowed sales and a rising number of unsold houses, even as national reports indicate month after month of falling sales.

Harvard University's Joint Center for Housing Studies predicts that the current national oversupply of unsold houses would take two years to sell off.

In June the Multiple Listing Service real estate database showed 97 single family homes for sale in the capital city. That's about three times as many as the number listed for the same period last year. Chuck Ramage of ReMax of Juneau has been selling local real estate for about a decade.

He said there's a real estate cycle in Juneau. Locals put their houses on the market in the spring to coincide with the end of the school year.

They sell them and move to the Lower 48 in the summer. People moving to Juneau from other places usually list their houses in the spring and move to the capital city in mid to late summer. He said that cycle looks different this year.

"We're wondering if some of the people down south are having trouble selling their houses so we're getting a delay in the move up here," Ramage said.

He said sales, especially among properties more than $400,000, are slow.

Interest rates have been inching up and now hover around seven percent. The hike may be forcing people to look at homes with lower prices. Problem is, few are available. Of the single family homes listed in late June, the average price was $390,000.

Ramage said many people qualify for loans of no more than $150,000. That leaves prospective buyers with as much as $240,000 to close the gap between price and loan.

Honey Bee Anderson of Powell Real Estate said two large condominium complexes, several high end custom homes, single family structures and a number of attached homes have been completed in the last 18 months and that's swelled inventory.

Anderson said homes are selling, but sales take longer to complete now than in recent years. Price wars of years past-when a seller received several bids at once-are history. People who want to sell their home are showing flexibility in price negotiations.

"They need to realize it's more of a buyer driven market right now than the seller driven market we've been accustomed to," she said.

Builders may be reacting to a slower market.

Last year saw a drop in the number of new housing units permitted. According to the City's Community Development Department, permitting for residential building peaked in 2003 when the city authorized 205 new housing units. Last year it gave the go ahead to 157.

Despite the larger inventory, prices for some categories of homes continue to appreciate.

City tax assessor James Canary prepared a residential real estate trend report for the Juneau City Assembly in April. Comparing last year to 2005, the report revealed a marginal increase in the average price for single family homes selling above 340 thousand dollars, but below 540 thousand dollars.

Canary said zero lot line homes, which generally are built on the edge of a lot's outer property boundary, are the current market's hot ticket. He suggests that's because they sell for lower prices than other types of homes. Canary said their average price in 2006 hit $249,000, up from $235,800 in 2005.

"That represents a significant appreciation," he said. The assessor said prices waterfront homes-generally selling for more than a half million dollars also appreciated last year over 2005.

Sometimes sellers are slow to react to a weak market. They're reluctant to lower prices and so their homes sit in a glut. How long will the buyer's market last is certainly the pressing question for prospective homebuyers, sellers, developers and real estate agents.

Change could come over the next year or two provided interest rates stay in check and no geopolitical events spook the global, national and local economies.

Local realtors say they hope the fall selling season will show improvement. It starts in September. Canary said the assessor's office will begin analyzing 2007 sales prices at year's end.

Meanwhile home buyers with money for a down payment face a pleasant plethora of choices.