Thursday, 18 December 2008
I received a phone call yesterday afternoon from someone who is concerned about the recent price reductions and wished that I would share actual sales because it can appear at times as though the Girdwood real estate market is falling like a rock. I'd love to share sales, but Alaska is a non-disclosure state; this means that we have to get both a Buyer's and a Seller's permission to share sales data. Although we get this permission for our transactions so that we can produce our 'Just Sold' postcards, we do not get this permission for transactions in which we are not involved.
So how's the market? Let me give you a quick recap without a lot of statistics. We typically see 70 - 80 transactions a year in Girdwood and this year we'll see 50 - 60 transactions, so volume is down. The market really has to be looked at by segment (home, condo, land, etc), price point, and location to measure what is happening with prices. Overall it appears as though prices are flat, but we are still seeing significant demand in some areas. The upper end home market has really softened since last year. Land sales have slowed unless it is a highly desirable lot. Condos at the Resort base sell quickly, but only if they are priced well and thoroughly marketed.
The one common denominator is price. The market has become very price sensitive. Where you could just about put any price on any property and at least expect an offer a couple of years ago, today you've got to be priced right where it will sell in order to even get any interest.
So what about all these price reductions? Obviously, price reductions are the result of the price being too high and this can occur for a number of reasons: 1) The Licensee may have misinterpreted the market when generating the price. 2) The Seller initially insisted on too high of a price. 3) The market (segment, price point, and location) changed. 4) The Seller's motivation changed. 5) The marketing is ineffective and is not reaching real Buyers.
Don't hesitate to comment, e-mail, or call if you'd like to talk more about what is happening in our real estate market.
