‘Starved for new listings’

The lights in the Burns household flip on around 4 a.m. every weekday. While the pot of coffee gurgles in the kitchen, Christina Burns loads packed meals into a reusable tote while her two children sleep upstairs. When the clock strikes 4:20 a.m., the trio loads into Christina’s Subaru and begins the two-and-a-half hour drive to Seward.

Christina is the districtwide librarian for the Kenai Peninsula Borough School District. Her kids — ages 10 and 12 — attend Seward Elementary School and her husband, Henry, is the principal of Seward High School. They relocated to Southcentral Alaska from Fairbanks last summer when Henry was offered his position at Seward High.

Like a lot of other people in Seward, however, the Burns family hit a crucial roadblock as they prepared to relocate: housing.

Henry Burns said their house in Fairbanks sold after being on the market for about two days, but laying roots in Seward proved to be more challenging. The family put about five offers in for homes in Seward — in one case offering $100,000 more than the asking price — with no luck.

For the first two months after arriving in Seward, Burns said his family stayed in Anchorage while he lived in an RV down by the bay. He told members of the Seward Port & Commerce Advisory Board in March that he’s been told that being homeless in Seward is a “rite of passage.”

“Everyone you ask here that’s been here awhile will say that,” Burns said. “They’ll say, ‘I was homeless here, I was living on someone’s couch.’ You know, I’m a professional. I make a nice living and I cannot afford a place here.”

The family ultimately bought a house in east Anchorage. The couple and their two kids commute between Seward and Anchorage every day, unless Burns needs to work late, in which case he has friends who let him stay with them.

The housing shortage, Burns said, has bled into his work life. He said he’s hesitant to hire people because of the housing shortage. Since July 2021, Burns said he’s had seven jobs turned down because of housing. The two people he has hired this year either have lived in Seward before or grew up in Seward.

He’s floated the idea of parking RVs for Seward High School staff in the school bus parking lot for staff to stay in.

“I was thinking outside the box,” he said.

KPBSD Superintendent Clayton Holland has previously said that the district is exploring a partnership with the Alaska Vocational Technical Center through which the district could offer teachers dorm rooms at the school.

Burns said the city’s plans to develop new subdivisions for residential spaces in Seward are great, but they’re long-term solutions to a problem that’s happening right now. He’s from a small town and, having previously worked at a high school with 3,000 students, loves Seward’s tightknit community.

The Burns’ struggle to find housing isn’t unique.

The demand

Demand for housing in Seward has always outpaced supply, but that disparity has grown in the wake of the COVID-19 pandemic. That’s according to Nicole Lawrence, the owner of Seward Properties, who has worked in real estate since 2010. Seward Properties represents more than half of Seward’s housing sales and Lawrence said a lot has changed in the last few years.

There are several challenges unique to Seward that can stand in the way of housing opportunities, such as geography. Seward is surrounded by mountains and set on bedrock, with rivers and floodplains cutting the town in half. At the end of the road is the beginning of the Pacific Ocean.

Lawrence said Seward usually has a reliably cyclical housing market, with about 20 new residential listings popping up first in May and then in July. Those listings are generally able to relieve the market pressure that builds up in the interim.

In 2020, however, a lot of people stayed put. People didn’t want strangers doing walkthroughs in their homes, for example, and there was a lot of uncertainty about what would happen with the market and fears about job security, Lawrence said. The buildup of buyers swelled to double of what it normally was by 2021.

“When residential listings finally came on the market, people felt like they had been starved for new listings,” Lawrence said.

That swell in demand for the same amount of supply is not unique to Seward, though. Lawrence said it’s a phenomenon playing out around the country as demand for housing consistently outpaces supply. For perspective, she said listings in Seward typically garnered between two and four offerings in 2019 — before the COVID-19 pandemic. In 2021, that jumped to between eight and 15 offers on each house.

A deep dive into the current U.S. housing market by The Upshot, the New York Times’ data visualization webpage, reports that the median price for a home in the United States is up by almost 20% over the previous year and that for-sale inventory is at a new low. That report found that while new home construction is increasing, the United States has been underbuilding and it will take years to catch up.

The market in Seward, at least, has adapted to the competition, Lawrence said. Cash offers remain the most attractive, because they’re the fastest and simplest way to close on a house. Cash offers eliminate the need for a listing to be appraised when there is no lender involved.

That lack of oversight by a certified appraiser can allow homes to sell for more than what they would objectively appraise for. Appraisals are unbiased professional opinions of a home’s value that are used whenever a mortgage is used to buy, refinance or sell a property.

Even so, another way buyers are trying to be competitive, Lawrence said, is by waiving the appraisal gap. In those cases, a potential buyer puts in an offer and says they’ll cover the appraisal difference without necessarily knowing what that difference is. That means the buyer is pledging to follow through even if the listing is valued higher than what the listing is selling for.

That way of skirting the appraisal process, however, sometimes means homes are selling for more than they’re worth, which affects the region’s broader housing market.

“The houses aren’t selling for what they’re worth, but they’re becoming worth what they’re selling for,” Lawrence said.

Lawrence said her company has taken steps to try and level the buyer playing field. For example, she said Seward Properties will put a house on the market Monday, but will not begin responding to offers until Friday at 5 p.m. That partially skews data on the average length of time properties generally sit on the market, but she says it makes the process more equitable for people who might not be able to get an offer in at a set time.

“If we didn’t set a deadline, it would become this mad scramble where people feel like they have to get off work that day to go see the house (and) to make an offer within 20 minutes of seeing the house, with no time to think about it,” Lawrence said. “It would just feel more like first come, first served and we feel that that is unfair to buyers. With so little inventory and such high demand, we want every buyer who is interested in the listing to have the opportunity to make an offer.”

The market

So who is actually looking for housing in Seward? Data prepared by Lawrence for Seward’s Port & Commerce Advisory Board show that 75% of people buying homes in Seward are residents who use their home as a primary residence. Nearly half of buyers — 43% — are less than 35 years old.

Between 2019 and 2022, more than half of Seward home buyers already lived in Seward. An additional 25% were people buying property as a second home or investment home, while about 17.6% of buyers relocated to Seward.

Of the 25% of buyers who purchased a second or investment home, roughly one-third of them were already Seward residents. Of all the properties sold in Seward between 2019 and 2022, fewer than five were purchased with the intent of changing the use from a primary residence to a nightly residence.

The rise in short-term rentals, such as those offered through AirBNB and VRBO, has impacted housing markets throughout the United States. In Seward, they’re nothing new. Lawrence estimates her company has managed vacation rentals since about 2016, but said municipal red tape — zoning regulations — is sometimes enough to turn people off to the idea.

Friday, there were 249 vacation rentals in the greater Seward area available to book on the AirBNB website, from Bear Lake to Lowell Point. The rentals ranged in price from around $70 nightly for a few one-bedroom stays to $2,200 per night for a yurt at Bear Glacier Lagoon.

Short-term rentals located within Seward city limits must be zoned correctly and must also have a lodging permit through the city. Those rules don’t apply to short-term rentals located outside of city limits, as the Kenai Peninsula Borough does not have zoning codes.

“You can have a house that’s zoned properly, but if it doesn’t have the right number of parking spots then you can’t do it,” Lawrence said. “… I think a lot of people talk about doing it, but it’s not like it’s happening with every single property in Seward.”

Still, Lawrence said Seward has always been a place where there’s been more demand for housing than supply. That trend has just been exacerbated — by the COVID-19 pandemic, but also by the seasonality of Seward’s workforce and tourism. The city’s year-round population is about 2,800 people, but that roughly doubles during the summer, according to the Seward Chamber of Commerce and Visitor Center. Lawrence said she sold her first home last year to someone whose job is based in Georgia, but has been able to work remotely during the pandemic.

“They love Seward, Alaska, and this is where they chose to be,” Lawrence said. “We think we’re going to see a lot more of that, as people travel to Seward and fall in love with this place, realize that they can work remotely and then choose to call this place home.”

Working toward a solution

As stakeholders grapple with the best way to connect people to housing, Lawrence emphasized a need for more multifamily housing complexes, such as apartment buildings. Most people who move to Seward, she said, prefer to rent before they buy.

Proposals to bring more single-family homes to Seward, she said, such as a proposal to convert Forest Acres Campground into a housing development, will address the lack of supply of available homes and should fill a gap in the buyer market. However, brand-new single family homes are unlikely to address the need for more rentals in Seward, she said.

Besides addressing the gap between supply and demand for residential home sales, Lawrence hopes the city will also open up some land with multifamily zoning to allow more quality, high-density housing options. A good example of a multifamily rental building, she said, is one located near the Seward Post Office, in which every unit is occupied and the building is in good condition.

“That is housing 14 people who work in Seward and need a place to call home,” Lawrence said. The building also allows pets — an amenity that can sometimes be hard to come by.

“A lot of people moving to Seward for jobs end up in multiplexes like this, that we manage,” she said. “If after a few years they decide to call Seward home, then we help them become homeowners.”

Still, housing opportunities on the eastern Kenai Peninsula aren’t necessarily limited to the City of Seward.

Jena Petersen is a real estate agent at Seward Real Estate Company who has been selling homes in Seward and Moose Pass — a town of about 315 people located about 35 minutes from Seward — for nearly 10 years. She’s originally from Valdez but has lived with her husband in Seward since she was in high school. Like Lawrence, Petersen said lack of housing inventory is a challenge.

There were 11 homes for sale in Seward on Friday on the Alaska Multiple Listing Service — a real estate advertising and listing service company. The properties varied: with a one-bed, one-bathroom, 560-square-foot place pending at $199,500, to the higher end, with a two-bedroom, two-bathroom, 880-square-foot cabin with four land parcels in Johnstone Bay listed at $1.4 million.

Petersen said she estimates the housing market in Moose Pass is generally about 10% less expensive than in Seward. There were two places for sale in Moose Pass on Friday through the Alaska Multiple Listing Service — a 907-square-foot one bed and one bathroom for $199,000, and a 1,372-square-foot two bed and one bathroom for $236,000.

“There aren’t a lot of options,” Petersen said. “Somebody comes into my office and (says), ‘Well I’d like to look at some two- or three-bedroom homes and I want an acre of property and a garage.’ I don’t have it.”

Petersen and her husband own multiple properties in Seward, including their family home and an AirBNB rental. Her husband is a contractor and has built two long-term rental apartment complexes in town as a way to bring more housing to the area.

“We wanted to provide something,” Petersen said. “We saw a need. It was there.”

Like Lawrence, Petersen said she’s seen a recent spike in the number of offers put on a home — houses that used to sit on the market for a month now go within a week. Clients sometimes don’t even want to walk through a home before putting in an offer, she said.

Petersen said people sometimes “hit the week” just right, but otherwise have to wait for more properties to become available. Once a house does become available though, she said buyers need to act fast.

“If something comes on the market, you definitely need to be decisive,” Petersen said. “Basically, if you’re going to make an offer on that house, there’s no more going home and talking about it for five or six days. It just doesn’t happen.”

She said the solution isn’t always to simply build more houses, though.

Building is cost prohibitive for a lot of clients looking to own a home, Petersen said. Even for people who can afford to purchase lots in Seward, she said accessing water, sewer and electricity to the properties can be arduous.

“That’s a big hindrance to people, you might get your property for a low price, but there’s a high cost to have those utilities installed,” she said.

But the city is working to address utility access. Among the proposals currently being pursued by the City of Seward is the creation of a master plan for utility expansion.

Petersen said she’d like to see the Kenai Peninsula Borough open more land for development on the eastern peninsula, which she said would make “a big difference.”

“We have these beautiful mountains that we love, but there’s only so much ground that we can work with,” she said.

Kenai Peninsula Borough Land Management Officer Marcus Mueller said Friday that the borough is aware of Seward’s housing problem and has a meeting scheduled next week with city leaders to talk about the problem. There are a few ways the borough could open more land on the eastern peninsula, but some of Seward’s unique qualities make it “tricky,” he said.

For one, the area doesn’t have an advisory planning commission. Advisory planning commissions are meant to give residents other ways to participate in land use activities proposed for their community, according to the borough’s webpage about advisory planning commissions.

There are also several factors that go into making a piece of land viable, such as soil quality and whether or not the parcel lies in an area prone to flooding. Others include whether or not the area can be accessed via roads and whether development is economically feasible.

“I think that if there was an obvious parcel of land for the borough to work on, it would have already happened,” Mueller said.

When it comes to short-term rentals, Mueller said the borough has zoning powers but has not exercised those powers as it relates to short-term rentals, and currently doesn’t have any plans to. He hopes that out of next week’s meeting with city leaders comes the identification of a few pieces of land that could be suitable for development.

At the city level, proposals currently in the works include the development of a subdivision between Hemlock Avenue and Bike Park, the conversion of the site of the city’s Public Works Facility for residential purposes and exploration of whether it would be viable to develop homes on the Seward Marine Industrial Center bench.

The Hemlock Subdivision proposal would put 40 single-family homes on lots of 6,000 square feet between Hemlock Avenue and Bike Park beginning in 2023. The Seward City Council has already approved a resolution allowing an engineering firm to examine the viability of the SMIC bench, where preliminary work indicates there are 250 acres of developable property, Lowell wrote.

In the meantime, though, full-time residents are making do with what’s available. For Henry and Christina Burns, that means moving on — again.

“We’ve got three more weeks of school,” Burns said. “My wife is not coming back next year for the district. She’s gonna get a job in Anchorage, my kids will go to Anchorage schools and then I will get a one bedroom, one bath here in Seward, probably around September, when all the tourists go away.”

His new position as principal of Seward High School is one on his bucket list, but still, he said he’s not sure how long he will be able to live apart from his family in Anchorage. He and Christina want to do what’s best for their kids.

“This is a lifelong dream of mine to become a principal,” Burns said. “I’ll probably be here maybe two or three more years and then, you know, go from there,” he said.

Reach reporters Ashlyn O’Hara and Camille Botello at ashlyn.ohara@peninsulaclarion.com and camille.botello@peninsulaclarion.com.