Anchorage housing market: stable but held back by consumer caution.

• Author: Richardson, Jeffrey

Potential home buyers in Anchorage are acting like fever patients -- shivering and sweating instead of buying. Bombarded by negative economic news and suffering from a slew of personal and political uncertainties, people who ought to be upgrading are instead watching and waiting, say realtors.

Simply Boring

"If one wanted to use a single adjective to describe this market, it's simply boring," says Connie Yoshimura, president of Fortune Properties. She notes that brokers are having to be more creative in their marketing and diversified in their listing strategies.

Ron Pollock, broker for 2001 Realty, says the buyers are still there, but they enter negotiations with relatively little enthusiasm. "Buyers are still buyers, but they're not committed to the sale. What people read in the paper is their reality. That really undermines the psychology in the community," he explains.

Pollock worries that the low interest rates available in the market now have not tended to push up home values. "My concern is we didn't have prices go up, but we have fabulous interest rates. Take away the interest rates and the prices could have actually declined," he says. Pollock expects that if rates remain low, the market will eventually pick up momentum. If they go back up, the market may actually soften.

Yoshimura isn't sure the low rates are all that helpful and may actually be hurting some potential buyers because savings rates are correspondingly low and may be contributing to a perception of financial loss or feelings of uncertainty. "Jobs help the housing market more than a 6 percent interest rate because you can't buy a house if you don't have a job, regardless of what the interest rate is," says Yoshimura, noting that long-term changes in the state and national job markets are adding to uncertainties and creating a drag on the market.

Brad Stern, vice president of Key Bank of Alaska, notes that "perception is a strong player" in the market. He's not surprised, therefore, that housing starts, projected to be about the same this year as last, are coming in a little below the mark. But he adds that more listings have come on the market as homes have recovered their value.

"Eagle River seems to be having a good year, both in terms of new construction and existing inventory. I see that trend continuing now that the infrastructure has been developed from a transportation aspect," says Stern. In fact, the Eagle River segment of the new home market has been...