I know that a lot of pople are out and about enjoying the summer.  So far this year the weather has been decent, not great but at least everyday has not been cold and rainy.  so I know that everyone is enjoying themselves.  Dip net fishing on the Kenai River has been awesome, the Eagle River Bear Paw was great and this week I know my wife is hiking the Crow Pass trail from Girdwood to Eagle River.  so there is plenty to do out there.

So with all this going on; what’s the real estate market doing.  I’ve seen recent reports about consumer confidence being down, but that does not appear to be the case here in Eagle River Alaska.  The Mat-Su valley(Palmer/Wasilla) is holding its own compared to last year, and Anchorage is down about 9.5% in the number of homes sold.  Eagle River and Chugiak are up 16.1% so far this year. 

One difference this year is that we are selling more land for new home construction, and as a result of this new home sales are up.  This is much different then what we are seeing in the markets in the lower 48.  It should be noted that many towns in the lower 48 are doing just fine.  Middle America is surviving, even though the talking heads and Wall Street don’t give us much credit.

There are tough sales out there, and there is more homes available this year than last.  the selection is good, and some homes are just over priced for their condition or location.  Remember the #1 rule in real estate is location, #2 is condition, and #3 is Price.  You can’t change #1, but you can change #2 & #3. 

For more detailed information feel free to call me anytime. 

Remember to rinse your fish before you put them in the smoker, they turn out too salty otherwise, but most importantly…

Enjoy the summer!

Can you blame them?

This is normal and we will see them back in the homes shortly. The market has been good here in Eagle River. I’ve been asked several times in recent weeks what is the market doing, and as usual I am happy to say that locally, it is pretty steady. According to the local MLS there were 20 transactions pend last week here in Eagle River. That’s pretty good, and market supply is holding about 10% higher than last year but is not rising higher like it sometimes does as we approach the summer months.

I’ve compared the Anchorage, Mat-Su valley, Eagle River markets to see whats what. How are we doing compared to last year? Remember last year there was a First Time Home Buyers credit available that fueled many sales. In comparing the first 5 months of last year to the first 5 months of this year, the Eagle River market has fared better than the other 2. Our sales volume is up, while their down. Eagle River is a smaller market and the property prices are above many First Time Home Buyers. We are more consistent, which leads to stability.

We like Stability!

Now we hope for a warm summer and lots of sunshine. Interest rates remain low, new construction is picking up; the Eagle River economy is very vibrant!

It appears that there are shoppers out there, about 3 shoppers for every buyer.  Lots of people wanting to buy a home but their afraid to won one.  The buyers are active and we have seen many offers accepted here in Chugiak and Eagle River.  In looking at the total market numbers compared to last year there was 4.5% less home sales in the first three months of 2011.  That seems to be pretty good since last year we had the first time home buyers credit available.  When we get to the end of June we will see what the true market numbers are.

Right now it apears that we are in a slower, but back to normal housing market.  The economy as a whole appears to be doing ok.  New businesses are opening and there is some new construction underway, housing and commercial.  These are good signs for what is to come.  The only discouraging sign is that many home owners are not selling.  This may be either because they cannot because of what they owe, or they would have to spend too much to move up. 

This has increased the number of new homes being built this year in Eagle River.  Builders are optimistic about the housing market and are starting new homes.  The construction lenders are still tight with the lending, so not all builders can move forward but many are.  This is good for our community, which according to the latest census numbers is now 34,982 people strong.  This number is about the same as the estimate from 2005, but very little building has happened in the last 6 years (I think the estimate was too high).

Now is a great time to sell if you can, and there are some great deals out there for buyers.  Interest rates are low although lending conditions are tight.

But, it is ugly out there.  The once brilliantly sparkling snow piles are now dirty brown piles of dirt and snow slowly melting, putting water on the road ways and encasing my car in brown muck.  I make multiple trips to the store for window washer fluid.

In the coming months many organizations will be putting clean up projects together.  Eagle River Rotary will be doing a road clean up project in April, and another clean up day at the Eagle River Nature Center sometime in early May.  Now is a great time to get out in the community and meet your neighbors while picking up the trash that magically appears as the snow piles melt.

Help keep Alaska beautiful, find a project and pitch in.

The message was that Alaska had increased taxes by so much in 2007 that Alaska was no longer a place to develop.  Based on the information they provided it appears that they’re correct.  One excerpt from their handout reads as follows:

• We a NOT competitive compared to other areas
  • When oil prices are $100 a barrel, the total marginal government take in Alaska is 82 percent.  In Alberta, it’s 55 percent.  In the Gulf of Mexico it’s 43 percent.  Alaska is simply not competitive under ACES. (source: Roger Marks)

I have a really hard time with these numbers, but no one gives all the information, so I have included a copy of the tax rate:

The formula for the total tax rate, including the base rate and progressivity is:

0.25 + ((Net per barrel value – $30) X .004)

ACES also contains a 20% tax credit for capital costs, with potential greater credits for exploration depending on location. For example, let’s assume the following:

• 100 barrels sold on the US West Coast
• ANS West Coast price of $50
• Transportation cost (pipeline and marine shipping) of $5
• Upstream (exploration, development, production) costs of $20: $10 capital and $10 operating
• No royalties (for simplification)

The net value of the oil would be:

100 X ($50 — $5 — $20) = $2,500

The per barrel net value would be:

 $2,500 / 100 = $25/bbl

Since this is less than $30/bbl there is no progressivity and only the base tax rate would apply. Thus the tax before credits would be:

.25 X $2,500 = $625

The capital credits would be:

.20 X $10 = $200

The tax net of credits would be:

$625 – $200 = $425

Now let’s say the price of oil goes up to $70.

The net value of the oil would be:

100 X ($70 — $5 — $20) = $4,500

The per barrel net value would be:

$4,500 / 100 = $45/bbl

Since this is more than $30/bbl there would be a progressivity surcharge. The surcharge would be:

($45 — $30) X .004 = .06

Thus 6% would be added to the base tax rate of 25% for a total tax rate of 31%. Thus the tax .31 X $4,500 = $1,395

The capital credits would be: 

.20 X $10 = $200 

The tax net of credits would be:

$1,395 – $200 = $1,195

Now if you can understand all this I am very proud of you.  What I do understand is that as the price of a barrel of oil goes up, so does the tax rate.  Only it is not prorated like our income taxes.  Alaska gave the oil companies a great rate and even a free pass for many years and oil production has dwindled.  Now prices are finely high enough that they can really make money.

Alaska needs a fair share of this wealth, but what is fair.  Talk to your politicians about what you think is fair.  I am no going to say how to fix this, but I do think it is broken.  Don’t misunderstand me though. I think that Alaska should get more then we did before, but maybe not all of it.

As we move towards spring there is more sunshine everyday, and today is no exception. The sun is brilliantly reflecting off the snow. I replaced the battery from my camera with it’s alternate on the charger so that I could take a couple photos. Unfortunately I did not realize that the charger was not plugged in and the new battery I put in the camera was dead. Bummer, no pictures from this outing, maybe next time out.

This is the time of year I like to keep a camera in the car, you never know what you will see. I am reminded on a daily basis why I live in Alaska and work in Eagle River. It is absolutely beautiful.

 Economic times have changed. The real estate marketplace has changed…and so must your home-selling strategy. It’s simple logic, really — but so many sellers just don’t “get it.” You don’t have to be one of the pack. With my Market Smarts for Home Sellers free in this guide I’ll update you on:

• What to expect in a marketplace where buyers are now top dog.
• The biggest blunder today’s home sellers make that keeps the “For Sale” sign in their yard months too long.
• How to avoid the stress and frustration brought by insulting offers from lowballing buyers, long months with strangers trekking through your home and poking through your closets and – the worst possibility of all – the money-draining strain of two mortgage payments.
• The surprising way home sellers unwittingly sabotage selling their home.
• The single most powerful tactic home sellers miss for attracting qualified buyers who’ll find their home a perfect fit.
• The #1 reason bad sales happen to good people.
• How to prevent the buyer-seller tangle from becoming dog-eat-dog so you get your asking price the first time around.

 You can download a copy of this Specail Report for free, Click Here!

The snow is falling today and it reminded me that Mother Nature has a way of making everything beautiful.  As the winter drags on the landscape is drab and gray.  Well thanks to Mother Nature, last night it started snowing, and ‘Whallah’, everything white and pristine again.

Some days we wish life was like that.  When you are selling your home this is an important lesson.  Your home needs a fresh look!  Don’t get me wrong your house is beautiful, but face it you live in it everyday.  I realize you clean up after your self, but when was the last time you dusted, washed the wall corners leading to the kids room, cleaned the light shades, and the most important back-splash behind the stove?

These things seem like no brainers, however when you’re selling your home they may get overlooked.  I know you clean them when you have a party.  My wife loves our home when we have a party, as everything gets cleaned and decluttered.  The home sparkles, although I may not be able to find everything I’m looking for the next couple of days.

The fresh snow reminds me that the one most important thing you can do in selling a home is to paint it.  Give it a fresh look.  Do it right, tape things correctly, take your time, put on multiple coats. 

Do it Right! Just like Mother Nature would!

“Wow, you drive that far EVERYDAY!”  I hear this all the time from people.  A reality in most people everyday life is that they have to commute.  East Coast, West Coast, and in the Midwest, people drive to work.  Some may take mass transit, which does lessen the toll on you, maybe.  I still think the daily grind of getting to and from work is pretty consistent for everyone.  Well not everyone, some lucky people walk to work or ride their bikes.  This blog is not for you!

Its for the rest of us that spend 30-60 minutes on our way to work.

In a Alaska the commute can be quick and other days it can be horrible.  The weather dictates this as well as the moron that just cut off the guy in from of me sending him into the ditch, creating a huge snarl of traffic on the only road linking the Mat-Su Valley and Anchorage.  This is a reality that effects at least 30,000 people a dozen times a year.  Yes, just a dozen times a year.  So its not really that bad, well when it happens it’s that bad.

I think if you commute from anywhere it will take you time.  commute from South Anchorage and it will take you longer to get to downtown than if you live in Eagle River.  The commute from Eagle river is the same as from Wasilla to Eagle River.  I just wish more businesses would relocate their corporate headquarters to Eagle River (BTW, Corporate guru’s, we have land and would love to have you).  So if the difference is just an additional 30 minutes is it worth it. 

Some say the cost is huge, but I would argue its not.  For example 30 minutes at 65 mph in a truck that get 16 mpg ( I hope your car does better) uses 2..03 gallons and costs $7.03 ($3.46 per gallon) each way, $70.28 per week for the additional miles driven each way.  I think most people get better gas mileage than this.  This adds $302 to the monthly commute bill.

If a home in the Mat-Su Valley is $90,000 less does the difference save you any money at the end of each month?  Is the extra space that you get, as most homes are on larger lots (Half acres+ compared to a 1/4 acre or less in Anchorage), worth the difference?  there are more newer homes in the Mat-Su Valley, so the energy costs of these new more modern homes possibly offset the cost of the commute?  Easier access to the trails and rivers of the Mat-Su valley, that can save on your weekend gas bill, so there is a minor trade off, unless you go to Kenai or Seward every weekend than there is an increase.

Current interest rates are 5.125% today, and that additional $90,000 will cost you $490 per month on a 30 year conventional loan.  That is a saving of $182 per month that could go towards a more fuel efficient vehicle, or maybe a new boat?

BTW, this is what I was thinking about on my way in from Wasilla today.

In the Mat-Su Valley homes can be more affordable with a majority of the homes in the $150,000 to $350,000.  The Mat-Su Valley offers larger lots and access to recreational properties that Eagle River and Anchorage do not.  You can click anyone of the links below to see the current homes for sale.

• Wasilla
• Palmer
• Big Lake
• Houston
• Willow
• Talkeetna

The local real estate market continues to chug along with more buyer moving up from the lower 48.  Many of the buyers that I am seeing in the market are military relocating from other bases.  Will these new Alaskans buy or rent.  Many of the inquiries I’ve seen have asked about rental in our area.  This is a trend that has been ongoing for the last 3 years and I believe is driven by the turmoil down south.

The housing market across the country is getting better, however there have been casualties along the way and unfortunately many buyers that are relocating to Alaska have taken losses before they moved here.  I understand that it is very frustrating to lose money that you have invested in your home.  Our parents taught us that his was one of the safest investments we would ever make, but in the last 5 years that changed.

Here in Alaska the market has had its ups and downs.  We’ve seen corrections in valuation, but not to the extent that our neighbors have down south.  There are a few more foreclosures in recent months, and there will be more.  Even here in Alaska there were lending practices that snared a few ill prepared buyers.  For the most part we have seen a slow down in the market.

Last year in the Eagle River area the number of homes sold decreased by approximately 6%, but the average sales price went up.  It varied depending on the price range.  The Anchorage market saw minor increases, as did the Mat-Su Valley.  As we move towards the spring sales season, homes are slowly coming on the market.  Inventory numbers are increasing, but only marginally.  The number of sales are increasing as well.  Three years ago I forecasted that it would take 5 years to fully rebound here in Alaska, and I still stand by that forecast.

There will be a move to quality, and that has been a trend that started about a year ago.  People want more for their money.  New construction will continue to get better.  I believe that Eagle River will see growth from this has the subdivisions in this community continue to grow.  This year should be good, a little better than  last year.  According to ADEC there will be more jobs in Anchorage, and the Mat-Su Valley will also see job growth. 

No boom here just good growth.  Just what we need.

If you have questions about buying or selling a home feel free to call me at 907-360-7471, or visit me on Facebook at www.facebook.com/eric.bushnell/