Housing market heating up

  • Monday, March 31, 2014 10:36pm
  • News

In his 20 years in real estate, Redoubt Realty owner Dale Bagley has never seen a more active winter.

Bagley, the President of the Kenai Peninsula Association of Realtors, said based on the rising number of homebuyers during the usually slow winter months, he expects a busy spring and summer for the central peninsula market. After a dismal start to 2013, home sales from October to December rose and that momentum has carried through the winter into March, he said.

“New people coming into the market have generated sales,” he said. “It doesn’t matter what sector they work in. When the economic engine is doing good, money spreads through the community and has a big-time ripple effect.”

Bagley, who also sits on the Kenai Peninsula Borough Assembly, said the three main drivers of the peninsula economy are oil and gas, commercial fishing and tourism. One big factor in the residential market is the recreational component — people want homes on the Kenai River.

Overall the entire central peninsula market is doing well and it cannot be attributed to the Alaska Pipeline Project only, he said. New jobs with Hilcorp Energy and Cook Inlet Energy along with the expansion of the Central Peninsula Hospital are reasons why more people are moving into the area.

A new Alaska homeowners study produced by NerdWallet, a San Francisco based consumer advocacy group, listed Nikiski and Kalifornsky in the top 10 best conditions to buy homes in the state. The article used three factors to determine which places have the most to offer homeowners: home availability, affordability and city growth.

Nikiski ranked sixth on the list with an overall score of 63.6 for homeowners, while Kalifornsky was ranked eighth with a score of 62.3. Haines topped the list with an overall scored of 70.4 percent.

NerdWallet analyst Maggie Smith, the article’s author, said recent data from the 2012 U.S. Census was used to crunch the numbers. The overall score was determined after calculating homeownership rate, median monthly homeowner costs, household income, home value and the population growth from 2010 to 2012.

“The metrics tell potential buyers is who is living in the community and the investment in the town,” she said. “We are seeing in these energy states places where jobs are generally good for home ownership.”

Nikiski’s 85 percent homeownership rate and median home value of $165,200 were two reasons the area placed high on the list, she said.

Bagley said not to put too much stock in the list and described the rankings as “weird.” While the average home price in Nikiski is affordable, it is not the top market in the area, he said.

Kalifornsky and Sterling have experienced the most growth because people are looking for homes along the Kenai River, he said. While Nikiski is close for workers in the oil fields, K-Beach is by far the hottest area in the real estate market, a popular destination for recreational purposes, he said.

According to the 2010 U.S. Census, Kalifornsky is the most populated area at 7,850. Kenai is second with 7,100 people and Sterling third with 5,617. After Homer, Nikiski is fifth with a population of 4,493.

Smith said the population growth in Nikiski from 2010-2012 actually decreased by 0.3 percent, but overall affordability and household income scored high on the list. In the case for Kalifornsky, the population grew by 4.6 percent between 2010 and 2012 and is one of the more affordable places on the list, with monthly homeowner costs representing 24.4 percent of median monthly household income.

Smith said Haines topped the list for Alaska home areas because of a massive population growth of 53 percent between 2010 and 2012. Willow placed second with a homeownership rate of 94.2 percent. Sterling ranked 16th with the average home value of $242,300.

Redoubt Realty specializes in house, land, recreational, commercial and multi-family sales in the central peninsula from Glam Gulch to Sterling, Bagley said. The regional average home sales price is $212,893, he said. The median home price rose dramatically from $185,000 in 2011 to $200,000 in 2012 but was down to $198,250 last year.

Bagley said a possible explanation for the list would be the low interest rates in 2012, which resulted in people in the area selling their homes for nicer ones for the same payments, generating a lot of home inventory and a high list of sales.

Redoubt Realty has five homes listed in the Nikiski area and six homes for sale on the Kenai River, while the rental market is getting tighter, he said.

While it is difficult to speculate what the summer holds for the real estate market, if the start of the year is any indication, Bagley said he expects a lot of potential homebuyers with more people on the peninsula during the tourist season.

“Anyone you talk to, people are extremely optimistic about the future,” he said. “People are buying and selling homes to live, work and play here.”

To view the homeowner study go to: http://www.nerdwallet.com/blog/cities/best-places-homeownership-alaska/

Reach Dan Balmer at daniel.balmer@peninsulaclarion.com.

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