Real estate reality

MAT-SU — As foreclosure rates continue to remain high nationwide, some local real estate professionals say the Mat-Su Valley is less affected by the slumping market that’s gripped much of the Lower 48.

Kathryn Clark, the 2008 president-elect for the Valley Board of Realtors, said the Mat-Su housing market is experiencing a decline in its real estate market, but not enough to panic over.

“I don’t think it’s as doom and gloom as some people think it is,” Clark said.

As of Friday in 2007, 1,158 existing homes were sold in the Mat-Su Borough, she said. This is a slight drop from 2006, when 1,183 existing homes were sold — a difference of 2 percent.

While the sale of existing homes has been static, the hardest hit area of the local real estate market has been new housing starts, Clark said. This year’s new housing sales dipped from 524 in 2006 to 376 this year, a 28.2 percent drop.

While the market isn’t booming, property values continue to rise, she said. The median sale price of those structures has increased by 3.3 percent, from $193,900 in 2006 to $200,300 for 2007.

Aside from fewer people in the market for new homes, Clark said builders are also being more careful to not flood the market with a large number of newly built homes for which there is no demand.

“The building industry has been hit hard, but you can see that builders are checking themselves,” she said.

Born and raised in Alaska, Clark has seen a wide range of economic situations come and go, she said. While some may think the state’s economy in some areas is heavily linked to what is happening in the Lower 48, Alaska’s real estate market seems to follow its own path.

One of the main issues that has led to numerous foreclosures is issuing sub-prime rate mortgages, Clark said, adding it also has led to more foreclosures in the Valley as well, but not at the high rate as in the Lower 48. Overall, Alaska has one of the lowest foreclosure rates in the nation.

Jeff Clements, president of the Mat-Su Home Builders Association, said he can’t predict the future of the housing market, but believes the industry in the Valley is in good shape and has a strong future.

“I’m not going to venture too far out there because I don’t have a crystal ball,” Clements said. “I am pretty optimistic about our economy though, but that’s just my opinion.”

Along with being president of the Mat-Su Home Builders Association, Clements and his wife, Susan, own Great Northern Homes and Construction, a company that specializes in new home construction and remodels.

Clements said he believes the Valley market and local economy has slowed, but is stable. After several years of increasing home sales and new home construction, the market is simply returning to a normalized condition, he said.

“Personally, I think the slow-down is good for the housing market,” he said, adding the drop in local new home construction can be a deceiving statistic because the market for remodeling existing homes has been strong throughout 2007.

The Valley continues to grow at a pace faster than any other area of the state, which is good news for the local real estate market, Clark said. “Realtors will have to work even harder.”

Contact Chris Gillow at chris.gillow@frontiersman.com or 352-2284.