So, is it a good time to buy?  My answer would be an emphatic, yes!  My response is heavily weighted by mortgage interest trends. 

Just in case you haven’t been following them, today’s 30-year conventional mortgage rate was at 4.25%.  The VA and FHA rates were the same, 4.25%.  We haven’t seen rates this low in 40 years.  Why, your parents probably can’t recall when rates were this low!  So, why are folks waiting to buy?  Hoping for a decrease in prices?  Is that logic sound?  Let me provide an example from which you can draw your own conclusions.

Let’s say you bought a $325,000 dollar home, the average for Eagle River.  And for the purpose of illustration, you got a $300,000 loan.  If prices went down, and the house dropped 10% next year, you would lose $32,500.  If you got a loan for that same home, today, your principle and interest payment would be $1,476.  If interest rates go up next year to 6% (We cannot really predict where interest rates will be next year, but 6 % is a reasonable possibility) then your payment would be $1,799.  The payment difference is $323 each month.  That’s as much as a car payment!  Over 30 years that difference is $116,280!  Can you afford that?  Wouldn’t it be better to be putting that into your retirement fund? 

If that makes you feel like it is time to buy or sell a home in Alaska, I am available to assist you in exploring the possibilities.  Or, for more information on homes for sale in Eagle River, Alaska, click here.

Gorgeous home remodeled in 2009. Beautiful granite countertops, induction cooktop, stainless steel appliances and accents in Kitchen  (Featured in "Alaska's Best Kitchens). Spacious and open layout. Built-in storage in master and family room. Large bedrooms and bonus loft.

Eagle River is in what some Alaskan’s call the “banana belt,” a reference to its warmer climate (when compared to Fairbanks).  Average temperatures in the summer range between 50 and 75 degrees Fahrenheit and in the winter between 0 and 30.  Extremes in summer reach 85 and in winter, 25 below.  Our secret to comfort, though, is our low humidity.  Once acclimated, you can play golf in shirtsleeves in the summer at 60 degrees, and you won’t need  much more than a sweater until we get into the 30’s.  In fact, sourdoughs (those who have lived in Alaska for more than a few years) dress in layers throughout the winter and bring out their heavy stuff at about 0.   These temperatures seldom require air conditioning, so most of our homes have none—but of course a good heater is quite important, and a cozy fireplace is useable about 8 months of the year.

It might surprise you that “hurricane force” winds are common here.  Depending on the front that is moving across our mountain ranges, primarily the Chugach, today’s 50-MPH breeze is an every month occurrence.  We get 80-MPH winds 6 or 7 times a year.  That fact invites a close inspection of any home you are considering, to ensure the roof has 100-MPH shingles. 

It has been a particularly rainy Summer, with very few sunny days since about the 4^th of July.  (It’s all good—the fish still bite in the rain.)  July usually has less rain than August, often causing alarm at the dryness of the local hillsides and some concerns about wildfires both in the city and throughout the State.  But this year, the clouds provide a different vision of the mountains and the inlet, every day.  My awe at our views continues, with something different to notice, daily.  I marvel at the Creation! 

 But what about precipitation in the winter?  Yes, we get it—and some years lots of it.  Expect to see snow (affectionately known as “termination dust”) (go on, ask me, Why?) on the mountains beginning in mid-September.  And from about the end of October until the middle of April, you are likely to have snow in your yard.  Some days it will cause you to get up early to shovel your driveway, and some days you’ll work on it when you get home from work—or better yet, have the kids shovel it when they get home from school, because it is fairly certain that they went to school, even if it was snowing.  It takes a pretty heavy snow storm to close schools here.  I cannot recall even one snow day last year, and I do recall several days when I had to remove 8 inches of snow from my driveway.  That makes a snow-blower a very important tool in one’s shed.

All this snow gives some plausibility to the jocular phrase, “Alaska has 4 seasons—June, July, August and Winter!”  Alaskans revel in them all!

All of the above is written from personal experience and has absolutely no basis in researched scientific records.  But, I am certainly willing to share my experience(s) living in Alaska with you.  And I am certainly available to help you buy or sell a home in Alaska.  For more information on homes for sale in Eagle River, Alaska, click here.

Lower hillside living in this large Lindahl-Cedar home with 4 bedrooms in main home and one bedroom and a large office downstairs in MIL apartment. Main kitchen has breakfast bar and pantry. Main house has loft and large rock fireplace. MIL has fireplace too. Both units currently rented.

Superb home with exceptional master suite, remodeled kitchen, spacious rec room w/wet bar, dishwasher and fireplace. Perfect for entertaining, even the pool table stays. Great decks and yard. 1 car garage converted to shop. New roof in July 2010.

Lovely lower level home which is Ramp-Accessible! Lots of Light. Patio opens from living room and bedroom to lawn. Close to shopping and trails. Covered parking space included.

Updated, stand alone Independence Park home. Reverse floor plan with kitchen and great room w/fireplace upstairs. Home theater projector and screen stay with the right offer, as does the hot tub on the back deck downstairs. 2 RV parking places in HOA lot are available for $2500 on SBOS. New carpet throughout in May 2010. Lovely home in excellent condition.

Fantastic Gourmet Kitchen designed by a professional cook. Custom Alderwood cabinets, granite countertops, G.E. Monogram 6-burner stove, griddle, extra large oven and warming oven. Bosch dishwasher, under counter wine refrigerator, double sinks. Large master suite with beautiful views of the inlet! Huge walk-in closet with window, very large bath with champagne tub for two, large shower with jets on the wall, custom glass sinks and imported Italian tile on floor! Vaulted ceilings, sound system throughout, laundry room upstairs, lots of can lights in ceilings. Imported Italian floor tile, eco-friendly carpet, wood floor in great room, custom eco-paint. Lots of windows, office or theatre room, full bath, very big mud room on lower level. Oversized three-car garage with large workshop and Premier coating on the garage floor. Real copper overhang on windows, lots of flowers in summer. A true show-place.

So far this year sales prices have been steady; the average sales price year-to-date is approximately $323,000, which represents a slight increase (less than 1%) over 2009.

For more information on homes for sale in Eagle River, Alaska please be sure to visit http://www.HomesOfAlaska.com



Eligible first-time home buyers can receive up to an $8,000 tax credit, while eligible repeat buyers can receive up to $6,500. A first-time home buyer is defined as someone who has not owned a principle residence in the last 3 years. Repeat buyers must have owned their current home for 5 consecutive years out of the last 8 years at the time of closing on the new home. For both first-time and repeat buyers, the home being purchased must be used as a principle residence. Income limits also apply; to ensure eligibility buyers should speak to their tax professional as well as their REALTOR.

Tips for Buyers:

1. Don’t procrastinate: To have any chance at finding a home and having an offer accepted by the end of April, buyers will want to wade into the home buying process right away. The immediate steps include making a final list of desired home attributes, scouting favorite neighborhoods and areas, contacting a bank for mortgage pre-approval and beginning the home search process. Home buyers who have a house to sell need to act NOW and should price it aggressively to generate interest and a sale in time to close on their new house by the June 30th deadline.

2. Don’t count on another extension: The tax credits won’t be available forever. To guarantee you can take advantage of it, act now.

3. Mind the interest rates: Interest rates are low right now, hovering around 5%. Anyone considering a home purchase in 2010 should do it now to take advantage of the cheaper cost of borrowed money in addition to the tax credits if they qualify.

For more information on the Tax Credit or to get started with the home-buying process, please contact me right away and I will be happy to assist you. If you have a house that you will also be selling, I would be happy to provide you with a market analysis showing the value of your current home.

For a complimentary Tax Credit Fact Sheet, please email me at roger@homesofalaska.com

Best Regards,
Roger

Extension of the First Time Home Buyer Tax Credit, as well as the expansion of the program to qualified repeat buyers, is expected to entice more buyers into the market. This in turn should keep housing inventories low in Eagle River throughout the winter and into spring. To learn more about the Home Buyer Tax Credit, please see my previous blog post.

Until next time…

Best Regards,

Roger

Under the new law, qualified first-time and repeat buyers have until April 30, 2010 to enter into a binding contract, and until June 30^th to close to be eligible for their respective tax credit. A first-time home buyer is considered a buyer who has not owned a principle residence within the last 3 years. Eligible repeat and move-up buyers must have resided in the principle residence they are selling for at least 5 out of the previous 8 years.

The new law also raises the income limits, allowing more people to take advantage of the tax credits. Eligible buyers with incomes up to $125,000 for singles and  $225,00 for couples will qualify for the full tax credit.

For more information about the new tax credit law, please contact me and I will be happy to assist you.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.