Somehow Juneau has upended the law of supply and demand.
The city’s population is up, home sales are up and home prices are at an all time high. However the supply of new home starts missed the demand by 70 percent between 2010 and 2012.
City and Borough of Juneau Lands and Resources Manager Heather Marlow presented information from the Juneau Economic Development Council’s 2012 Juneau Housing Needs Assessment to the CBJ Lands Committee on Monday.
“The research I’ve done that goes back to the 50s,” Marlow said, “And we’ve never had an adequate housing supply.”
More homes sold in the first nine months of 2012 than all of 2011. And when a homeowner put a home on the market in 2012 it sold an average of 38 days faster than the nearly three months found in 2011.
“You want to have a 6 months supply to give people choice with location, price and type,” Marlow said.
Average Juneau home prices climbed around $40,000 from $248,000 in 2010 to over $288,000 over the first nine months of 2012. Developers would have had to complete 343 housing units over the previous three years to meet housing demand.
“In that time we created approximately 90 dwelling units,” Heather Marlow CBJ lands department manager said. “And that is not looking at net demand.”
Juneau added 400 families during that time, she said.
Developers completed 36 single family homes in 2012 along with one multi-family unit, eight small subdivisions and one subdivision the city considers large.
A healthy community has a for-sale and rental vacancy rate of 5 percent, Marlow said. Across all types of homes Juneau has a 1.25 community average vacancy rate. For-sale homes alone have only a 0.8 percent vacancy rate.Juneau’s housing market could be ripe for developers, according to the housing assessment from 2012.
Juneau needs 200 two-bedroom dwelling units that rent at the fair market price of around $1,150 per month.
In addition, developers need to build out 515 single family homes at the $350,000 to $377,000 range.