Home builders bask in rising demand.

• Position: Alaska - Industry Overview

More amicable than markets in several years, residential real estate this year shows marked improvement.

While the national home building industry watches anxiously for signs of recovery, Alaskans who build and sell homes have been whistling recovery all year long. The tunes vary somewhat from region to region, though, and nobody is belting out "Happy Days Are Here Again."

Particularly when they recall recent years, home builders do have something to celebrate. But real estate agents and many economic analysts regard current trends in residential real estate with cautious optimism.

In January, the Building Industry Association of Alaska held a media luncheon to spread the gospel of an Anchorage housing market poised for a season of impressive new growth. The public relations effort was intended to soothe some of the lingering fears of potential buyers about the wisdom of residential investment and assure real estate brokers that, unlike some of the residences built during the last boom, the current crop of new homes offers high quality to buyers.

Hard on the heels of President George Bush's 1992 State of the Union speech -- which produced his proposal to give first-time homebuyers a $5,000 credit for homes built this year -- the mood of the luncheon was definitely upbeat. Although Congress has not enacted the credit and other Bush proposals intended to spur home buying, Alaska industry representatives say most of their hopes for 1992 are being realized. Projections of 600 to 700 new Anchorage homes for the year, reflected in the volume of building permits, appear to be on target.

In June, the Anchorage market consisted of about 18 percent new construction. According to Robin Ward, president of the Building Industry Association of Alaska (BIAA), appraisals on new homes sometimes top valuations of existing housing stock by as much as 10 percent, essentially leading the market upward.

Ward, who is also co-owner of Crown Pointe Inc., an Anchorage development company, says both market segments have been spurred by the lower cost of home loans. "Interest rates are as good as they will be, maybe forever," she notes. Favorable interest rates have spurred Crown Pointe, among others, to build about 40 single-family homes in South Anchorage subdivisions this year.

Fred Ferrara, president and chief appraiser of Alaska Valuation Service Inc. of Anchorage, says residential values stopped dropping in 1989 and have been improving ever since. But he notes that the market has not seen the return of investment buyers. Real estate experts agree that there is little financing available for residential properties that are not owner occupied.

"Housing in Anchorage right now is probably the best buy we're going to have, ever. I think there's a lot of pent-up demand out there," says Ferrara.

This is not to say that money is going to be easy to obtain by the standards of the mid-1980s...