Buying or selling a home? Here’s what Anchorage’s flat real estate market means for you

Anchorage's real estate market is flat, with prices remaining the steady over the last year, even as inventory has dropped.

But those facts alone don't really tell the whole story. What they mean to you will differ depending on whether you are buying or selling real estate.

[In Anchorage, fewer single-family homes are for sale and prices are flat]

Here are a few thoughts for homeowners – and homebuyers – when considering the current real estate market.

First, sellers: To compete in a flat real estate market, what can a seller do? First, even though buyers have fewer choices of properties for sale, you still need to put your home in good condition before exposing it to the market.

At a minimum, do a deep cleaning that includes washing the windows inside and out, declutter the interior, and tend to the yard during summer or clear the driveways and walkways during the winter.

If you've been proactive and kept up with those little maintenance items, you will have less to do. If your competition has done a better job, they are more likely to sell sooner.

Think of this as preparing to be the bride on her wedding day; being the star takes a little more time, attention and work than being a bridesmaid.

Next, get feedback from every showing. You want to try to see the house from the buyer's perspective. Some things you will be able to adjust, and some you won't. Just remember that price is the final equalizer, and a lower price can make most objections go away.

Ask your real estate agent for more specifics on what comparable properties are selling for — not just prices, but concessions too. You'll get these types of statistics during your initial listing appointment, but you should keep them updated frequently throughout the process.

Remember the most recent "sold" properties are the ones an appraiser will likely use to confirm the value of your home, if the buyer is financing the purchase. That data will also help you decide if you are willing to sell near those prices, or if you might need to consider another option until the market improves.

If you decide to wait for a better market to sell, you might consider renting out your property. If you live locally and decide to manage your own property as a rental, review Alaska's landlord tenant information website.

If you live somewhere outside Anchorage, be aware that being a long-distance landlord is difficult. Local property management companies usually charge 10 percent of the rental amount, plus other fees.

However, if your potential rental income exceeds your mortgage and expenses, renting your property could be the start of diversifying your investment portfolio.

What about buyers? When selections are limited, what can a buyer do? First, be aware that market time is just one of many market indicators. As an astute seller adjusts to feedback and market conditions, the price and property condition can be retested and generate interest from a new pool of buyers.

This is one of the reasons that properties may sit on the market for some time, and then suddenly see a flurry of activity. That is also why an extended market time may not be an indicator of a desperate seller or that something is wrong with the property. Instead, this may be due to a patient seller, or an unmotivated one.

Next, recheck your qualifications with your local lender. You may qualify for a larger mortgage under new lending guidelines with increased debt-to-income ratios from 33-to-41 to 43-to-50.

The first half of the ratio is for the house-related expenses (mortgage, taxes, insurance, homeowner's dues) divided by your monthly gross. The back-end ratio includes all other long-term debts.

However, a word of caution: Just because you might qualify for a higher loan doesn't mean you should take the maximum amount offered. In general, prudent buyers still should be justifiably leery of overextending and setting themselves up for financial disaster.

We like a more conservative approach using the even older ratios of 28-to-36, because this gives you more money in case of emergencies. Plus, you will have more money for fun and family.

Next, to maximize your buying power, watch the long-term interest rates. If long-term rates for mortgages go up, prospective buyers lose 10 percent of borrowing power for every 1 percent increase in the interest rate.

For example: If you qualify for a $1,520 monthly mortgage payment, you would get a loan amount of $300,000 at an interest rate of 4.5 percent. But if interest rates go up to 5.5 percent, to keep the same payment your loan amount would drop to $270,000.

So even if 2018 inventory remains low and the market stays flat, 2017 may be the year your dollar goes the farthest.