Somehow Juneau has upended the law of supply and demand.
The city’s population is up, home sales are up and home prices are at an all time high. However the supply of new home starts missed the demand by 70 percent between 2010 and 2012.
City and Borough of Juneau Lands and Resources Manager Heather Marlow presented information from the Juneau Economic Development Council’s 2012 Juneau Housing Needs Assessment to the CBJ Lands Committee on Monday.
“The research I’ve done that goes back to the 50s,” Marlow said, “And we’ve never had an adequate housing supply.”
More homes sold in the first nine months of 2012 than all of 2011. And when a homeowner put a home on the market in 2012 it sold an average of 38 days faster than the nearly three months found in 2011.
“You want to have a 6 months supply to give people choice with location, price and type,” Marlow said.
Average Juneau home prices climbed around $40,000 from $248,000 in 2010 to over $288,000 over the first nine months of 2012.
Developers would have had to complete 343 housing units over the previous three years to meet housing demand.
“In that time we created approximately 90 dwelling units,” Heather Marlow CBJ lands department manager said. “And that is not looking at net demand.”
Juneau added 400 families during that time, she said.
Developers completed 36 single family homes in 2012 along with one multi-family unit, eight small subdivisions and one subdivision the city considers large.
A healthy community has a for-sale and rental vacancy rate of 5 percent, Marlow said. Across all types of homes Juneau has a 1.25 community average vacancy rate. For-sale homes alone have only a 0.8 percent vacancy rate.
Juneau’s housing market could be ripe for developers, according to the housing assessment from 2012.
Juneau needs 200 two-bedroom dwelling units that rent at the fair market price of around $1,150 per month.
In addition, developers need to build out 515 single family homes at the $350,000 to $377,000 range.
Marlow said Juneau’s housing need has been exacerbated since 2010.
“If nothing is done, if we keep on going on the same trend we are going to have an even more acute housing problem,” Marlow said.
The CBJ Lands Committee is scheduled to meet next on Feb. 4.
The city has tentatively scheduled a housing forum for Feb. 27 at the University of Alaska Southeast campus.
• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.
Comments (16)
Add comment"healthy"
If the Juneau market has been constrained since the 50's, and yet Juneau appears to have thrived, is perhaps the definition of "healthy" a bit different up here than down south? How does our housing situation compare to other Alaskan communities, or the state as a whole?
515 single-family homes...where is there land for all of them? Back side of Douglas?
Exactly the right question:
Exactly. Who decides what "healthy" is? Developers, real estate agents, city bureaucrats? Juneau has consistently the among the lowest unemployment in the state. Not surprising people want to live here.
heres an idea
The developers build USCG housing, which is a garanteed market, with realistic returns on invesment. It would open up a lot of rentals and real estate..
Move the Capitol
Let's see what another proposed Move campaign does to this real estate market. Supply needs always be low in order to maintain price stability in this unstable political environment. Who would be willing to buy a house in a market of normal supply when 3,000 homeowners could immediately see their jobs transfered to Anchorage in a political coup?
This is a high-risk market for real estate because of the perpetual Move campaign and the high prices of houses reflects that risk.
My thoughts
A second channel crossing with development out at the north end of Douglas Island and/or development of the "bench road" above the N. Douglas highway would be a good start. What ever happend to the bench road idea? It was talked about a while back, but I haven't heard anything since.
Seems like the CBJ had a fair amount of land at Pedersen Hill too. Close to the Valley and with established bus service along Glacier Hwy.
"Housing prices jumped $40K
"Housing prices jumped $40K in two years".......That's just too good of a return on YOUR risky investment. So cbj has to step in and fix it so the "return" goes to them and to the developers!
Where was the government when
Where was the government when Wall Street stock jumped 400% in 2 years?
Why is it ok for private industry to see their investment grow but not ok for the public?
I think CBJ needs to back off and allow the "market" to work.
Sell land to individuals that want to hire a contractor to build a home but leave the developers out of this, they are doing just fine.
Flooding the market with new homes will hurt the housing market in Juneau. What happens when the capital moves or the debate comes back? Will CBJ make everyone whole?
GJSMITH for Mayor! This
GJSMITH for Mayor!
This person has an understanding of the real problem with housing in Juneau.
Supply and demand
I don't see any information in the article that Juneau has "upended the law of supply and demand" It seems to be working the same way it always has.
banksters
watch out for the banksters, they want you to borrow on your equity....bye , bye , house
Good market for sellers, bad
Good market for sellers, bad for buyers. That's why it's not a balanced market. Those that profit from sales commissions, loans, tax collections are thriving. First time home buyers should probably keep renting as no place is immune to price corrections.
Average Juneau home prices
"Average Juneau home prices climbed"
Ok, lets hear how profits climbed for builders, bankers etc...
homes are investments
- In addition, developers
- In addition, developers need to build out 515 single family homes -
I would like to know where the 515 people are now? Is this guesswork, speculation?
and then there are the folks
and then there are the folks like grim that do nothing but spin spin & spin
What about the other "little" issue
While a capital move is very bad mojo for Juneau the real nightmare is declining north slope oil production and the unknown point when there will be insufficient volume to operate the Trans Alaska pipeline. The exodus from Juneau and the rest of the state from this economic holocaust would be completely unprecedented. Unfortunately with no new net-gains in production and declining volumes of 4% per year this reality is inevitable. The bottom line is that Alaska's boom and bust economy is still very much a reality and over-building on the part of developers and over-investing in real estate on the part of banks and individuals is a fools game.
I just love the anti-drilling crowd in this town who also sit behind a desk in the State Office Building. Where exactly do they think 80% of their paycheck comes from? Without our oil income a huge percentage of State positions and many of the additional private sector jobs they create in Juneau will evaporate and our economy along with it's burgeoning population will plummet back to the "good 'ol days" when we were a sleepy mining and fishing town that also happened to be the state capital. Of course there's always tourism... lol
Nicest wishes!
Nicest wishes from primary europe :-) I invite you to my blog round casino online kasyna bonusy