Home-buying still strong in months before Ballot Measure 2

Posted: Thursday, October 31, 2002

When Steve and Robin Martin decided earlier this year they had outgrown their house in the Mendenhall Valley, the advantages of a larger, custom-built home near Auke Lake outweighed the threat of a legislative move.

"We like Juneau and we're planning on staying here for a while," Robin Martin said.

Though the value of their home likely would drop if the Legislature moved from Juneau, the couple believed the risk to be a minor factor in their home-buying and -selling situation.

A study released in September by the McDowell Group, a research firm in Juneau, said Juneau residents would suffer from a $1 billion decline in property values if the capital moved from the city.

The Martins put their current house, the first they'd owned in Juneau, on the market in June, closed the deal on building the new house in July, and had a serious offer on their first house by September.

The offer, though, came with a catch: If Ballot Measure 2, which would move the Legislature from Juneau to the Matanuska-Susitna Borough, passes on Nov. 5, the contract would be null and void. The Martins accepted the offer, but kept their house on the market to see if they could close the deal independent of the legislative-move vote. They didn't have to wait long.

"Another buyer came in and didn't care about the legislative move," Robin Martin said. "We told the (first) buyer they had so many days to remove the contingency, and they didn't want to do that, so we took the offer from the new buyer."

The Martins' relative ease in selling their house and their lack of concern for the possible legislative move when building a new one seem to be the norm in the Juneau real estate market this fall, brokers say. While many Juneau residents express anxiety over a possible legislative move, most professionals involved in the buying and selling of homes do not feel the market has been especially impacted in the months preceding the Nov. 5 vote.

"I think the market has been pretty strong and positive," said Eve Reckley, a real estate agent with Powell Realty.

Reckley, who said she is having her best year in the 13 years that she's been a real estate agent in Juneau, is selling homes as fast as she puts them on the market.

"I did anticipate that there would be some reluctance, but I haven't really sensed that," Reckley said.

Jamey Young, vice president for business development at First Bank Alaska, said he thinks there was probably more anxiety about the legislative move when it first became an issue earlier this year.

"I think the more recent polling data has taken an edge off some of those fears," he said.

A poll commissioned in August by the FRANK Committee, a Fairbanks-based group that wants to know the costs of the move, showed that two-thirds of frequent voters said they would vote against Ballot Measure 2.

The lack of hype in Juneau during the months preceding the vote probably had an effect on the market's strength, said Larry Spencer, who owns Spencer Realty in Juneau. He believes the real estate market has been less affected this year than in other years that had capital-move initiatives.

Since Alaska became a state in 1959, Alaskans have voted on five major capital-move initiatives, the two most recent being in 1982, when a measure to move the capital to Willow was defeated, and in 1994, when a move to Wasilla was defeated.

"The amount of media attention to this vote has been far less in the Juneau area than any other vote I've seen," he said. "I think that's gone a long way to preventing capital move angst in this election."

Many in the real estate business agree that any possible downswing in the market caused by the legislative-move vote has been offset by extremely low interest rates designed to lessen the downturn in the overall economy.

"My feeling is if rates weren't as low, if they were the same as what they were a couple of years ago, we would be seeing a lot softer market," Young said.

Debbie Banaszak, who closed a deal on buying a new, larger home in Juneau last week, said having a larger house and buying it at a low interest rate were important enough to her and her family to risk the effects of a possible legislative move.

"I just have faith in Juneau," she said. "Also, recent polls have indicated that if everybody votes, it won't be an issue."

She and her husband, Tim, bought a new house and sold their old one in less than six weeks.

Not everybody in the home buying, building and remodeling market in Juneau has escaped a downturn in business stemming from the possible move, though.

Rich Conneen, a Juneau architect, said 14 of the 20 clients for whom he had planned commercial or residential projects this year have put their projects on hold. Nine of the 14 projects were new or renovated homes.

"Some people mentioned the capital move directly, others didn't give a reason," Conneen said. He believes the move to be behind most of the hesitations his clients have expressed.

"If that capital move wasn't on the issue, I think maybe a residential job or two would have dropped off. ... That's in my norm," he said.

Conneen said he expects half of his clients that put projects on hold to complete them after the election if the ballot initiative is voted down.

Win Gruening, senior vice president for corporate banking at Key Bank and chairman of the Alaska Committee, a Juneau-based anti-move group, said a potential capital move definitely has dampened the economy.

"I certainly have seen over the last year a reluctance to invest a large sum of money," Gruening said. "I know clients who have held off on making decisions on investments and construction because they're unsure about the legislative move. If you're uncertain what's going to happen, you just put off making big decisions."

People probably feel more confident now because of recent polls, but they still need to get out and vote, Gruening said.

Christine Schmid can be reached at cschmid@juneauempire.com.

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