By Tom Morphet
Sales of homes have slowed, and orders
for new homes have fallen since the middle of last year, a drop realtors and builders say
reflects the national mortgage crisis and stock market decline.
Home values are holding, and the next three months will
determine if that continues, said realtors Jim Studley and Glenda Gilbert. But for
builders, the downturn has already come.
Tony Malone has built log and frame homes here since 2002,
averaging about two homes a year. “I saw a big shift last summer. A lot of my clients
wanted to hold off a year, or they terminated.” Most of them were retirement-age
couples from the Lower 48 and Juneau, he said.
Now Malone is doing more remodels and renovations, and
considering taking his business to Juneau. “If there’s not a market here, we may
be able to fill gaps in Juneau. Basically, we’ll go anywhere in Southeast we can find
a market.”
The story is similar for Dave Stickler, a builder here since
1984 who, like Malone, has been putting up two homes per year. “The pulse is looking
pretty faint. I don’t have anything on the books. To be honest, it’s a little
nerve-wracking, the lack of inquiries.”
Stickler figures that retiring baby-boomers, who make up the
bulk of his clients, now have half or less money than they had before the national economy
went bust. “People want to retire here, but in the real world, you need to find a way
to pay for it all.”
Boroughwide, real estate sales last year dropped to $10 million
from $12 million in 2007, Studley said. Sales totaled $8 million in 2006. About 90 percent
of sales are residential, he said.
Borough figures show a total 107 land and property sales in
2008, a five-year low and considerable drop from a peak of 153 in 2006. Borough figures
show transactions jumped from 67 in 2003 to 113 in 2004 and climbed steadily until 2006.
Sales dropped to 113 in 2007.
Building permits hit a five-year high of 100 in 2008, but part
of the number is due to inclusion of utility work for permits for the first time, said
borough staffers. The borough issued 71 permits in 2007, 72 in 2006, 54 in 2005 and 62 in
2004.
Realtor Studley
said the hit he’s seeing isn’t across the board. “Raw land with waterfront
is still desirable, plus large acreage with highway frontage (but) overall, people are
more conservative. There’s not a flood of buyers like we’ve had in the past.”
Another shift is out-of-town customers looking to buy on the
contingency of selling homes elsewhere, rather than on the equity of their homes, Studley
said.
Chamber of Commerce manager Joan Carlson said the number of
inquiries from people interested in living in Haines dropped to about 225 last year from
250 in 2007, a 10 percent dip. She’s received only about a dozen inquiries so far
this year, she said, though noting the majority tends to come in spring and summer.
Studley and Gilbert said half or more of their sales here are to
Alaskans retiring from elsewhere, including ones escaping colder, busier places like
Anchorage and Fairbanks.
Gilbert said banks and appraisers started tightening up in early
2008, and two properties have been lost to foreclosure since then. “Banks are being
extra cautious about what’s being said and done. They’re being watched. Their
practices are being scrutinized,” she said.
Properties also are staying on the market longer, she said.
“It’s got to be a good product now to move fast.”
If and how far prices will fall is difficult to project, Gilbert
said. “It depends. Most sellers in our market are not desperate. You don’t see a
lot of unoccupied places. Down south, people will move on and leave a place empty. You’re
not seeing that here right now.”
But Alaskans aren’t immune to the recession, Gilbert said.
“State workers had a lot of money in stocks and they’re scared. That has hurt
our migration. They’re looking at their portfolios and realizing they’re going
to have to work longer. It’s out of their control.”
Although the local market will take a hit, it won’t be as
deep as elsewhere, Gilbert predicted. “There are people who grew up here who want to
come back no matter what, and people who will retire here, no matter what. It will just
take a little longer,” she said.
Lumberyard owner Chip Lende said last summer was an average one
for him, but he’s seeing especially slow winter business and expects that will
continue. Expectations of the real estate market grew unrealistic in recent years, he
said, and he expects a leveling out.
“I think it will have an impact on the building trades, but
I like to think we have a buffer. People who really want to live here will find a way to
do so, or will be replaced by somebody who does.”
Haines has survived a lot of downturns, including timber and
cruise ships, said Lende, who served more than a decade in local government. “We’ve
been through enough rounds of that, I think we can say there’s an inertial stability
here. When something goes down, something else goes up. Or, in walks a movie.”
Studley said commercial sales have been particularly slow, and
commercial properties have lost value. “It may take years to sell a commercial
building.”
“Haines has a
reputation as anti-growth. That’s an unfortunate stigma because I think not everyone
thinks that way. It would be better if there was a friendlier atmosphere. People in Haines
are very opinionated in what you want and they make that known. If you don’t want
growth, you won’t get growth.”
Studley said he expected Haines would continue to grow
incrementally, due in part to anticipated projects including highway and harbor
improvements, and other government spending. “That will pull us through a two-year
period, but after that, if we don’t pull out of (the recession) with the rest of the
country, we could be in trouble.”
The most vulnerable prospective buyers in the market are
middle-income earners buying existing homes, Studley said. Those are people who have seen
a loss of equity in their homes as well as losses in assets due to the drop of the stock
market.
In the past, some of those buyers have scooped up $200,000 homes
here that need work. Interest in those homes has declined, Studley said, as buyers who may
have been stretching their finances to get a home and fix it up are no longer assured of a
return on their investment.
Studley said he doesn’t believe the number of properties for
sale in Haines has changed significantly in the past few years. The median home price in
Haines is $260,000, he said.
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