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A Mid-Year Market Update for Interior Alaska

We’ve got an extensive real estate market update for you today. Here are all the numbers you should know.

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I’ve got a lot of great information to share about a few different markets here in Alaska today. For the quick hits, if you go to our home page and scroll down a bit, you’ll see them. There are stats for the Fairbanks, Anchorage, North Pole, and Mat Su Valley markets on there. If you want a deeper dive, click on the “more” tab on the top of the page, where we post our weekly market trend reports. I reference them a lot in our radio show, so I invite you to download them and follow along on our next episode. 

Here are a few statistics I want to highlight specifically in the Fairbanks market as of September 3rd:
  • 186 active listings
  • Average days on market is 73
  • Average list price is $241,695
  • 101 listings under contract (pending)
  • Average sold price is $250,438
  • An average list-to-sale ratio of 98.6% 
  • 3.4 months of inventory, which puts us in a balanced market
  • The pending ratio, which shows us how quickly listed homes are going under contract, is at 35.2%

The discrepancy between homes that sold quickly and homes that didn’t is clear. It usually comes down to pricing the home right, conditioning it right, and marketing it right. Time is money, and the statistics show that. Overall, we’ve got a balanced market in Fairbanks trending toward sellers. With a pending ratio of 35.2%, I call this an active market.

Fairbanks is a very active market right now.

The North Pole market is very similar. Here are some of the numbers we’re seeing there:
  • 137 active listings
  • Average days on market is 67
  • 70 homes under contract (pending)
  • 98.8% list-to-sale ratio 
  • Average sold price is $236,344
  • Four months of inventory
  • A 33.8% pending ratio

Finally, I want to talk about the trends we’ve been seeing across the entire market. As far as units sold goes, we dropped a little from 101 to 96, but that's not too much to be concerned with. We saw a jump in the median price, from $221,695 to $226,325.

Obviously, we’ve gone through a lot of information. The crazy thing is that we have barely scratched the surface. If you have any questions or would like to have these numbers explained in further detail, we’d be happy to help. Give us a call or send us an email today and we’ll be here to help.

How We Helped Laura Buy a New House

"First of all, they sold my house very quickly at a fair price. They did all the legwork so I really was able to go to work and focus on what I needed to focus on in my life. They helped me buy a new house and they managed to coordinate both the sale and the purchase of my new house all on the same day. On one occasion Greg Merdes came out at 26 below zero to find the waste vents for our septic system because my husband was unable to do it. And so Greg borrowed his equipment from someone, came out, dug around, and found the waste vents and marked them on his own time and on a Sunday at 26 below zero. He did not have to do that." 

Oh No, My VA Appraisal Came in Low!

Low appraisals are bad news for everyone, but the process is a little bit more complicated for veterans. Luckily, you do have a few options.

Looking to buy in Alaska?  Get a full home search
 Looking to sell in Alaska? Get a free Home Price Evaluation

What do you do when your VA appraisal comes in low? 

Low appraisals are the bane of my existence. First, though, it’s important that you know about the Tidewater Initiative. 

Your lender or buyer’s agent will let you know when the appraiser invokes tidewater. This has nothing to do with floodplains or your ability to purchase the home. The Tidewater Initiative simply means that the appraiser believes they will come in low on the report. Through the Tidewater Initiative, you will know ahead of time. The agent then has 72 hours to provide additional comps in order to help the home come in at the agreed-upon value.

Once the appraiser completes their report, they’ll submit it to the VA. The VA will underwrite the appraisal and issue your notice of value, or N.O.V. That’s when we know what the value is and what kind of financing the veteran can obtain. If the notice of value is lower than the contracted purchase price, then we have a problem because a VA loan needs 100% financing.

At this point in time, your agent can request a reconsideration of value. There is a formal process for this, but basically the reconsideration of value checks to see if the appraiser made any mistakes or miscalculations. After all, appraisers are human and humans make mistakes. Realtors put information into the MLS and it’s up to the appraiser to decipher it; mistakes can be made. 

Your agent can request a reconsideration of value.

During the reconsideration of value, we may also find other comparables in the report that weren’t initially used to justify the purchase price. 

There are no guarantees that the reconsideration of value will actually work. You need solid evidence to support the case. I’ve done a few of these successfully, and the biggest one was a $10,000 upswing. I had to find photos, comparable sales, and have the buyer write a letter. It can be a lot of work to get those reconsiderations through. 

If the reconsideration fails, you are stuck with three options: 
  1. Ask the seller to lower the purchase price. As the buyer, you are protected by the VA loan. You can get out of the deal and get your earnest money back if the seller doesn’t agree to lower the price, which kind of forces the seller’s hand. 
  2. Make up the difference in cash. You and the seller can meet in the middle or you can make up the difference on your own. If you are able to put up to 5% down, you can lower your VA funding fee.
  3. You can walk away from the deal. Unfortunately, you may have lost some time, energy, and money on things like inspections during this transaction. On the bright side, your earnest money is protected. 
A low VA appraisal can be a disastrous surprise, so make sure you work with an agent who is trained in VA loans and can perform a market analysis prior to making an offer on the home. Your agent should also know the reconsideration process. 

If you have any other questions about this process, just give me a call or send me an email. I would be happy to help you!