Peninsula real estate market remains solid

Posted: Friday, February 18, 2011

Culturally and geographically, the distance between Alaska and the Lower 48 is vast. And when it comes to the real estate market, the gap is equally yawning.

While the rest of the United States continues to fret and fuss over the burst of the housing bubble, the Central Kenai Peninsula's real estate market chugs forward at its normal pace.

"We don't see the number of foreclosures they are dealing with Outside," said Glenda Feeken, the owner and broker of Re/Max of the Peninsula, "and our prices have held pretty steady."

With 361 homes sold in 2010 as compared to 314 in 2009, and land sales up from 161 to 185 in the same period, it is readily apparent that while the market here might not be booming, its definitely not in a bust phase.

"We are complete polar opposites," said Kari Butler, the CEO of the Kenai Peninsula Association of Realtors, referring to national versus local real estate conditions. "We have less than 2 percent in the market of foreclosures right now. And that's our norm."

Property values in the area are also steady, Butler said, noting that if you bought a house on the central Kenai Peninsula five years ago, the house has seen a 10- to 20-percent increase in value, with the average price of homes here hovering near $190,000.

Yet while the general market has fared the worst of the storm with resilience, certain types of housing were not immune to the ailing economy.

"Higher-ups had a hard time last year," Butler said, referring to houses priced at $400,000 and up. "There weren't a lot of people who could afford that because of the tightening of the bank rates and loans."

Houses on the river suffered especially.

"River houses have been pretty quiet," Feeken said, "and the prices on the river have come down. But when you price at the point of refusal and you're not getting any market response, then you have to come down."

Feeken acknowledged, though, that the upper-end and river markets have shown movement and are bouncing back. And as the economic downturn affected what kind of houses were selling, it also influenced what kinds of people were buying, or not buying those houses.

"Years ago, we had a lot of retirees moving into the market, and a lot of big money from California and elsewhere," said Bill Hutchinson, who has been an associate broker with Freedom Realty for the past 25 years. "But that all changed with the collapse of the real estate market in the Lower 48. Those people stopped investing here."

There are fewer vacation homebuyers because of this, Hutchinson said, but still plenty of people are relocating here from the Lower 48 or moving in from Anchorage or other parts of Alaska. The Central Peninsula Hospital's expansion and the oil industry also continue to draw in specialized employees who then set roots on the Peninsula.

"My people right now are all ages," Feeken said. "It's a little bit of everyone. I have buyers who are from out-of-state coming in with the oil companies, and I have buyers who are relocating from in-state."

All of these different people aggregate to form what most brokers and realtors are calling a pretty solid market.

"We're doing fine," Feeken said. "There's buyers who want to buy, there's sellers who want to sell."

And that's more than the majority of the Lower 48 can say.

Karen Garcia can be reached at karen.garcia@peninsulaclarion.com.



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