Fairbanks, AK Real Estate News

By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
The 4th Quarter Fairbanks Real Estate Market Report is now available. Although we started 2007 off with a bang, we all but ended it with a whimper. Total sales volume for Fairbanks and Interior Alaska shows we were almost 5% under 2006. If not for a 135% jump in volume in January we would have ended on a much worse note. In the past 10 years the only other time we've had a negative end of year showing was in 2002. The number of homes sold was also down; 1192 homes sold resulting in a 9.2% decrease from 2006. Credit that to increased reluctance by buyers to jump into a market where double digit appreciation had all but faded and a tightening credit crunch that simply pushed some buyers out of the market altogether. The good news is that the average sales price increased 5.5% from 2006 t...
Comments 6
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
I've ranted on this subject before with our local board, thus far to no avail. Around the country agents are manipulating MLS data and Fairbanks is certainly no exception. Two of my real estate pet peeves revolve around agents withdrawing their listings and re-entering them back into the Fairbanks MLS in order to reset the days on the market clock to zero. We don't have a CDOM feature, but can pull up property history reports with just a couple of clicks. I'm not sure who this little endeavor is supposed to fool; buyers or other agents. I often wonder if the listing agents that employ this little tactic tell buyers the true DOM or the DOM for the last time a particular property was listed in the MLS. If the goal is to fool agents, I have to wonder how inept the agent doing the manipulat...
Comments 10
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Changes in the market are occurring almost daily. Fairbanks is continuing to feel the pressure of a nationwide housing slowdown. Market activity decreased for the 7th month in a row; we’re down 32.1% in December ’07 as compared to December ’06 and 23.9% from November ‘07. It’s also taking longer to find buyers for the homes currently on the market. Marketing time increased 76% in December from December ’06 to 102 days on the market and 56.9% since November ’07. Interest rates are climbing somewhat as a result of a global credit crisis. With banks incurring heavy loses from delinquent mortgages, bank to bank lending has dramatically slowed. This has resulted in the Federal Reserve auctioning off $40 billion in loans to improve the flow of funds between banks and promising to auction off...
Comments 5
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Earlier this year I predicted the absorption rate for the Fairbanks real estate market would hit the 6-month threshold around the first of the new year. We haven't even celebrated the new year yet and I've alreday been proven wrong. I suppose it had to happen sooner or later. With home sales slowing a little more than expected, we've seen the absorption rate climb at a pretty steady clip. As of today there are 494 homes listed for sale in Fairbanks & North Pole; only 66 sold in the past 30 days, which gives us a 7.4 month average absorption rate. I've broken down the rates for both Fairbanks and North Pole below. Nearly every segment is in a 'buyers market' (6+ months of inventory) with the exception of the 0-150K market in North Pole. Fairbanks Absorption Rates: 0-150K: 6.75 Months 150...
Comments 2
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Remember them? When all you had to do to sell your home was to put a sign in the front yard and within a matter of days multiple buyers were standing on your front porch vying for the chance to outbid each other? Well, that was yesterday. Welcome to today. I sat down this afternoon to look through the MLS for a client with relatively specific needs. As I clicked past listing after listing, I couldn't help but wonder what these folks are thinking. The YTD average marketing time for Fairbanks Alaska real estate is less than 60 days. Only 7.7% of the homes currently for sale are under the yearly DOM average for Fairbanks. In any market, but especially a slowing market, days on the market must be considered when pricing a property. That sounds like an obvious statement I realize, but with 9...
Comments 1
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Years ago we had the opportunity to invest in a global energy fund. At the time we were relatively new to managing our own investments. As a result we tracked the funds movement on what seemed like an hourly basis. At the end of the first year saw a return of almost 61%. Feeling confident we let it ride even after it leveled off. One morning I checked the value and found we had lost 8%... then 11%. By the time I sold everything we 'lost' 14%. Or did we? Looking at the value of our shares when we bought vs when we sold, actually showed our rate of return was almost 57%. Not bad for having withstood the volatility for a little more than a year. The same is true where real estate is concerned. A report on the top 10 worst housing markets in the US would seem to paint a dismal picture of th...
Comments 12
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
While it's true that the US housing market is not as healthy as it was even a year ago, it's important to remember that real estate is local. Overall, Fairbanks Alaska real estate prices, for example, are up 5.1% from 2006. Prices for existing homes are up 6% from 2006. Not every segment of the real estate market is in a decline. Although price is important, it's but one of a multitude of factors that go into most buyers decision making process. Age, condition, location, school district, proximity to work, schools, etc. all come together to make a particular property a 'good deal' or not. When you find the house that feels like home and fits your lifestyle, sit down with your agent and determine fair market value for the property. Negotiation is the name of the game when preparing an of...
Comments 11
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Despite being at the heart of the holiday season, the market continues to march forward. The total number of homes sold rose a bit this week, and along with it, the total sales volume. Two $400K+ homes on the Ridge closed this week, although to get to closing they each took a 20% hit on their initial asking price. Combined marketing time was just shy of two and a half years. My guess is if they had been quicker to respond, they could have mitigated their loss somewhat. Although we saw a slight reduction in the inventory of available homes this week, we saw a significant jump in the absorption rate. This week we're sitting at 6.8 months; that's a sharp increase from 6 weeks ago when we were looking at 4.8 months. A general rule of thumb is that a 6 month absorption rate is considered a ...
Comments 4
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
The Federal Reserve announced today it auctioned off yet another $20 billion to commercial banks at 4.67%, which is slightly lower than the current discount rate of 4.75%. This follows their $20 billion auction on Monday. According to the release, the FED received almost $58 billion in bids for the $20 billion being offered. To date more than 166 commercial banks have vied for the reduced rate funds. The second of four auctions scheduled has drawn so much interest the Fed has announced they will continue pumping money into the system bi-weekly "for as long as necessary to address elevated pressure in short term funding markets." Additional short term loan funds will auctioned of January 14th & 28th. Translation: Banks are hurting. Mortgage loses have cost already cost banks billions of ...
Comments 2
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Well, we've had it pretty easy so far. It took most of the year before we even saw the mercury dip below zero, but old man winter has arrived with a vengance. The past few days have seen temperatures nearing the -50 mark. I love Alaska and thankfully the summers make up for the few bouts of extreme cold we have ever year, but I never like to see the cold set in. I took these pictures in our driveway this afternoon around 1:30. You can see the ice fog hanging in the air in the second photo. It sounds like we're heading for warmer temperatures in the next couple of days... tomorrow it's only supposed to be -26! Time to break out my board shorts and the margarita mix... not.
Comments 21
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
The national news is bombarding us with tales of homeowners in distress. The foreclosure process is never an easy road to travel. What happens, though, when the person being carried down that road isn't a homeowner at all? Many investors bought properties with the hope of holding it for a year or two and selling for a huge profit. After all, the real estate market was on an epic bull run in some areas. With ARM's resetting at significantly higher rates, many are unable to afford their investment properties. Imagine coming home from work today to find a letter taped to your front door telling you the property has gone into foreclosure and that you have to vacate the property. Tenants often have no warning and receive precious little time to find a new home. Alaska law is ambiguous as to ...
Comments 2
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Recently I received an offer from a buyer’s agent for a property in need of more than a little TLC. The sellers were selling the property as-is, and it was priced accordingly. Enter the buyers. One lives out of town due to work, while the other planned to make Fairbanks his home. The buyers apply and are approved via desktop underwriting with a reputable local lender. The only conditions required to close was a satisfactory appraisal and clear title. Just the way I like it. I just found out the buyers have lost their funding. As it turns out the buyer, the one who was not planning to make a move to Fairbanks, at least prior to closing, quit her job. Lenders typically like to know borrowers can repay the loan. Not having a job could make that a little more difficult. Go figure. I was su...
Comments 2
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Pardon me, but can you spot me a trillion or two? Far from being the white knight riding in to rescue suffering homeowners, the much touted mortgage bailout is going to have disastrous consequences. Taken simply at face value, the bail out sounds like a rational response to help millions of homeowners who were tricked by unscrupulous lenders. While it's true many lenders were looking out for their own interests, many of the homeowners facing foreclosure today knew exactly what they were getting into. When buyers sign on the proverbial dotted line at closing, they are signing a legally binding contract obligating them to repay the loan. The majority of the borrowers now in trouble are folks who could not afford the homes they were buying in the first place. Lax lending guidelines allowed...
Comments 5
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Dorothy Purdue of Purdue's Jewelers announced plans to sell her store to embrace retirement with a bang. With her late husband Ralph, Dorothy founded Purdue's Jewelers in 1962. Purdue's is a local favorite; an icon of Fairbanks. The store often looks more like a museum than a jewelry store. After relocating to the Shoppers Forum on Airport Way in 1978, Purdue's has survived the boom and bust economy that was the Fairbanks way of life. After 45 years Dorothy says she is ready to try something new. If you haven't ever been in Purdue's, stop by and see check out their incredible inventory of jewelry and very unique Alaskan made gifts. Be sure to say hello to Dorothy and wish her a very happy retirement.
Comments 0
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Although the spring and summer months are typically the busiest seasons for real estate, homes sell all year. For 2006, winter sales accounted for 40.3% of the total homes sold. If you're thinking of selling your home this winter, there are a few things you should keep in mind. Price it aggressively: Gone are the days where you could nudge the price 3-5% above the comparable sales in your neighborhood and expect a ready, willing and able buyer to come along. Today it's all about competitive pricing. That means setting an asking price that is at least on par with the sold comps, but it could mean going 3-5% under if your market is flooded with homes for sale. Make it Shine: To-do items like de-cluttering the house, having it professionally cleaned, emptying closets and junk drawers and ...
Comments 4
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
The Federal Reserve recently announced a quarter point rate cut in both the target federal funds rate and the discount rate, in part, to provide some buoyancy to the housing market. The additional rate cuts were designed to keep the U.S. economy on track, despite a housing slump and a schizophrenic financial market. Discount rate? Federal funds rate? What's the difference and what does it mean to consumers? Banks have two avenues from which to borrow federally insured funds. The discount rate, which applies to monies borrowed directly from the Federal Reserve, via the twelve regional Federal Reserve Banks, and the federal funds rate, which is the target rate private FDIC member banks charge to lend money to each other. The discount rate is directly controlled by the Federal Reserve and ...
Comments 2
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Ok, so maybe I'm a little on the slow side. No comment, thank you very much. I've been handwriting letters to my mother for years, once a week like clockwork. Who doesn't love getting mail? As long as it's not a bill, I would think most of us. I came across the next greatest thing on Amazon.com this afternoon. How many of us have parents or grandparents that don't use a computer? My mother has one but she swears it's possessed by the devil. I just realized this might be against the AR rules somehow as advertising. If so, someone call tell me and I'll delete this post. For a paltry $149 you can buy the HP Printing Mailbox; essentially a remote printer. You set up an account with "Presto", send an email from your regular email account and it prints wherever the printer is plugged in. How ...
Comments 11
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
Fairbanks Alaska Homebuyers: Do You Have A CLUE? Ever heard of CLUE? No, I don't mean the board game or the thing friends ask if you have. I'm talking about the Comprehensive Loss Underwriting Database. CLUE is a national repository of insurance claim information. Insurers use CLUE reports to determine how likely you are to file a claim against your homeowners or auto insurance policy. CLUE reports are generally reviewed prior to issuing a new insurance policy and before renewing an existing policy. The CLUE database is maintained by ChoiceTrust, an information clearinghouse that has been providing "decision-making technology" since 1977 to insurance companies, as well as local, state and federal government agencies. What does this mean to you? Each time you file a claim, or report a po...
Comments 9
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
We saw some good news this week in that the average days on the market dropped and the overall number of homes sold climbed by 21%. The flip side, however, is that the average sales price dropped slightly and the absorption rate broke the 6 month barrier. It looks like the earlier predictions that we would have an absorption rate of 6 1/2 months might very well come to pass by the end of the year. Notice of Default filings are down a little this week, although overall we're still seeing far too many. 168 Default Notices have been filed so far this year. We're also seeing a growing number of Deed of Trust Modifications being recorded. If you are experiencing trouble making your mortgage, please contact your lender and open a dialogue with them. Locally, interest rates took a slight hike...
Comments 5
By Jesse & Kathy Clifton, Retired
(Jesse Clifton & Associates, REALTORS®)
You’ve done your homework. You know what your future home should look like in terms of what you need and want in a future home. You’ve hired a buyer’s agent to represent you in the purchase. You’re financing is in place so you know what you can afford and what type of mortgage you feel comfortable paying. Now comes the fun part; house shopping. Your Realtor will be an invaluable asset when it comes time to start touring potential homes. We tell clients to bring a notepad and their digital camera so they can make note of the features of each home they like and don’t like. Which house had the main floor master suite? Which house had the big pantry? After touring a few houses, they all seem to run together. It’s important to give your Realtor as much feedback as possible. This gives your R...
Comments 2