INSIDE REAL ESTATE: Single-family starts down in Anchorage
Anchorage single-family building permits still lag behind last year’s with a total of only 95 new homes permitted through June 2017 compared to 106 in 2016.
However, the good news is a total of 300 new housing units have been permitted compared to 208 in 2016 thanks to a big boost in multi-family development earlier this year.
Overall, however, total new construction activity at $282.6 million is down $10 million, which is only a 5 percent drop from 2016, a surprisingly low dip. Commercial construction continues to outpace residential by almost 30 percent.
Other highlights of the mid- year permit summary show a 25 percent increase in new elevator permits with 105 issued which is perhaps a nod to our aging boomer population. And as can be expected, structural and electrical permits have fallen proportionate to the continued slide of single-family permits.
Huffman Timbers, Resolution Pointe and WestGate are Anchorage’s most popular new home communities with 10, 9 and 6 permits respectively (Dwell Realty, owned by the author, holds the listings for Huffman Timbers, WestGate and Resolution Pointe).
However, one has to wonder when these lots are absorbed where the next new residential development will emerge. Huffman Timbers has only 20-plus lots left; Resolution Pointe less than a handful of lots priced less than $150,000 and WestGate is an attached townhouse style condo community on R2A lots.
The need for small single-family lots continues despite the unit small lot subdivision ordinance designed for primarily downtown and Fairview infill and the proposed accessory dwelling unit still in draft by the Anchorage Economic Development Corp. subcommittee on housing which will add rental housing but fails to address ownership opportunities.
Troy Davis, who builds in Eagle River, has pulled 16 single-family permits so far this year. Following closely behind is Spinell Homes with 15 and Hultquist with 13. Hagmeier Homes has 5 permits as does a new builder, MGJ.
Crown Pointe and Merit have four each and you have to wonder how any of the remaining builders can even stay in business with less than a handful of permits. What is most interesting, however, is that owner/builders continue to capture a significant number of permits at 15.
This builder group, which are not licensed as general contractors and do not have residential endorsements, build primarily on individual and isolated lots on the Hillside and in Eagle River. Their permit value is slightly lower than the average single-family value of $423,289 that does not include any value for the lot.
So “if you build it, it will sell” is probably the best way to describe the new home market as long as the builder is smart about design and amenities so that their product competes well with aging resale properties. That’s most likely true whether it’s a new condo built to five-star energy standards with solid surface countertops and laminate flooring or an $800,000 plus luxury home on the Hillside.