Cora Carleson...................4

Hey Cora, I know we have talked about this before, but why is the housing inventory so low? I mean, didn’t see a whole bunch of people move into the area, why do we not have enough housing? Signed, Befuddled

Dear Befuddled, What a great question! Believe it or not, Befuddled, there are answers to this question. Let’s go back in time a bit – not far, just a bit, in 2019, the average interest rate for a 30-year mortgage was 4.75%. Which, at the time, was a great rate. But the average rate for 2021? Well, it was 3.11%. That’s a significant difference. Let me show you how that breaks out. In 2019 if you purchased a house for $410,000 at an interest rate of 4.75%, your payment for just principal and interest would be approximately $2138 per month. In 2020, you could buy a house for $500,000 at 3.11% interest rate for approximately the same monthly payment of $2138. That’s a $90,000 difference in home prices! Now, let’s take in the Covid19 factor. I know, we all hate to do this because we’re tired of it, sick of it and want it to go away and never return, but this is how it affected the real estate market. People were asked to work from home. There were those that could and those that could not. Those that could, got home and... they had nowhere to work other than the kitchen table, the bedroom in the corner with a tiny desk, or that funky space under the stairs! People were spending much more time in their homes. Like 24 hours per day! It was no longer a place to cook, relax and sleep. Suddenly, all of us were seeing those gigantic flaws in our homes. We needed a den or an additional bedroom. We needed to upgrade our internet and have an efficient working printer, a quiet place away from the TV and kids and dogs. Now that meetings could be conducted on Zoom, we were no longer required to come to the office. Most people thought of how nice it would be to have a bigger house that would accommodate this new way of working. A nice piece of land, perhaps on a lake, or acreage would be wonderful – and, since you are now home so much, let’s make it great to be home. Now that I don’t have to be close to work, I could live farther out. I could buy a bigger home on a lake, river, or stream. I could even have a horse property! It is much less expensive to buy what I want if I am further away from the commute bubble. Yes, yes... let’s do this!

Well, another problem, the builders weren’t ready. And it’s not their fault. Builders generally love to be busy doing what they do best – building things! But Alaska has had a real problem with skilled labor. We just don’t have enough trades people and it’s been a real problem for years. General contractors use sub-contractors to do framing, electrical, roofing, sheetrock, plumbing, heating – all kinds of things. Think about all the general contractors there are in the area, and all of them are using the same group of sub-contractors to get their job completed. There just aren’t enough to go around.

The other issue is that bankers loan money to builders incrementally. I mean, they have a cap of what they can borrow, like a line of credit. If they have 3 or 4 houses going, they may have used up their line of credit until the house is done and sold. This prevents them from getting over extended, but also prevents them from being able to keep up with the kind of demand we have now.

Another issue... Covid, AGAIN! I think Covid should be a new swear word and every time you say it, you have to put a dollar in a jar! Sorry, I digress, I know, we seem to blame everything on Covid and quite frankly, I wish we could never hear the word again! But because factories, lumber manufacturers, even loggers, have been affected by Covid, there are so many things that are behind in production. Garage doors? Can’t get them. Refrigerators? Scarce as a bull moose during hunting season! All kinds of the craziest things that you just cannot get right now. All this combined creates a huge problem for builders AND the people that want a home built.

So that brings us to... a shortage. People who may want to sell their homes are hesitant because, they may not be able to find one to replace what they have. It’s a real issue. Do I move – do I stay – do I try – I’ll just pray!

There are ways to make it all work, you just need an experienced realtor to guide you through this whole process. We definitely need to be a little creative, and of course prayers help too! Let’s take advantage of these great rates that give you buying power like never before. I am ready to dive into the deep end and get this done for you – call me and we will see what we can do to make all this happen and kick Covid on it’s ear, oh great, now I have to put a dollar in the jar!

Call Cora Today!

Keller Williams Realty Alaska Group Of Wasilla 621 S Knik-Goose Bay Rd Wasilla, AK 99654

www.clcandassoc.com 907.982.5700