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Letter From the Heart – February 2009

November 30, 2010

As you may already be aware…2008 is over. Whew! Stocks down. Housing down. Confidence down. Shoulders down. Sleeping bags down. Oops got a bit carried away there. Well, while the rest of the country is frowning and down we here in Alaska have some reason to be up with our frowns. Yes the recession will affect us as it will every corner of the globe and we will all feel our share. Steps will be taken at the National as well as State level to address the economic issues we are facing, some of them quite ominous to be sure. That is their expertise and we put them there for exactly that reason.

My expertise however is Real Estate as I know you are aware. My view is that it is good living right here in Anchorage Alaska.(sans the weather). That being said, here are the numbers as of this writing:

There were 2,455 fewer houses sold in 2008. As of now there are 787

residential houses on the market, which is up approximately 11 from a week ago. In all price ranges there are 3.91 months of inventory right now. This means if there were no more houses coming on the market it would take 3.91 months to sell the inventory is available. When there is less than 4 months of inventory the market is leaning towards the seller and more than 6 months, it leans towards the buyer. The interpretation is that we are experiencing a balanced market. In the range below $500,000 it is a balanced market and above it is a buyers market.

With lower interest rates (5.125% as of this writing), it gives a buyer more purchasing power. A buyer is able to purchase a more expensive home for the same house payment. From all indications interest rates are expected to remain around 5% for the foreseeable future.

With a balanced inventory and lower interest rates, now is a good time to purchase a home as well as a good time sell. Within this window one could say you could have your cake and eat it too, but don’t wait as the market is a fickle place…and cake turns stale if left out too long.

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