Real estate market flattens

Juneau home prices drop 5.6 percent, with more for sale

Posted: Monday, October 22, 2007

Residential real estate list prices in Juneau have dropped 5.6 percent since last October, according to data from a service that tracks home sales.

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Also, more homes are on the market, and they are taking almost a month longer to sell.

Greg Wagner, president of the Southeast Alaska Board of Realtors, said Juneau's real estate market is not unhealthy, and savvy buyers may be able to find good values because prices are a little lower and there's more properties from which to choose.

"It's flat. It's slow," he said. "But we are still selling homes."

Residential Real Estate

(2006, 2007, Change)

Average list price: $334, 163 $315, 478 -5.6 %

Average days on the market: 86, 115, +33.7%

Jan.-Sept. number of sales: 336, 277, -17.6%

Oct. number of homes for sale: 170, 225, +32.35%

Source: Kay Parker, Southeast Alaska MLS coordinator

The average list price in October 2006 was $334,163, while the average list price this month is $315,478, according to the Southeast Alaska Multiple Listing Service.

The number of sales between January and September declined 17.6 percent this year compared to last, multiple listing service numbers show. Homes also are taking about 29 days longer to sell than this time last year, from 86 days to 115.

Albert McDonnell put his 950-square-foot, two-bedroom condominium on the market for the whole month of August, but not one person came to look at it, he said. He asked for a price similar to other condos that had sold recently in the complex.

McDonnell thought there just weren't that many people looking to buy.

"Just looking around, there's 'For Sale' signs everywhere, and since I wasn't forced to sell, I'm not moving away and I can still afford it, I decided not to join the stampede of people trying to sell," McDonnell said.

The numbers mean home-sellers in Juneau will have to bargain with buyers a little more aggressively, real estate agents said.

"They might accept more of the closing costs as an incentive, offering allowances or carpets and roofs," Wagner said. Sellers also might offer to pay for more of the closing costs or required repairs.

"Some maybe bought when the market was very high, their circumstances have changed, and now they are looking to sell and it's not the same market conditions as they bought in," Wagner said.

Prices have declined because of higher interest rates and because they were overinflated at one time, said Errol Champion, associate real estate broker at Coldwell Banker. Higher interest rates mean buyers must purchase less house for the same amount of money.

"As interest rates climb, more of that disposal money has to go to the lender, which means they have to buy a lesser home. The other thing is everybody got caught up in this horrific escalation. When the realization set in, there were too many (home prices) that were too high," Champion said.

Appraisers were automatically adding 0.5 percent per month to values of homes in 2005 and early 2006, a practice that didn't stop until a year ago, he said.

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