Buyer Special Report

Nail By Nail:
How To Build A New Home

We'll help you investigate and learn about a home loan:

• The best home loan programs for new homes.
• The lowest closing costs and lowest interest rates on new home loans.
• You'll learn exactly how home loans work and how much you can afford.
• You'll be "pro-approved" for a new home loan by the lender of your choice.

How much do I want to allocate to land and the home itself?

• Example: If you qualify for a $250,000 home including lot, you might choose to allocate $60,000 for a lot and $190,000 to the home.
• We will then provide you with all of the information on every lot available for $60,000 and under in the areas that you want to live.

Then, it's on to floor plans. Here's what's next:

• We'll provide you with access to sample floor plans to stimulate your imagination.
• We'll help you narrow down the general style and size of home to fit your budget.
• We'll get preliminary quotes from builders to give you a general idea of the cost of the plans you like.

Securing the land: when you tell us which building site that you like, we'll:

• Help you prepare an offer that will allow you to "tie-up" the land you want for under $2,000.
• Present the offer to the owner on your behalf.
• Negotiate in your best interests to help you get the best buy.

Fit your house to your land – we'll help you:

• Customize the final plans of your new home to fit your land.
• Obtain final prices from the builder.
• Obtain final loan approval for your construction loan and permanent home loan.
• Prepare and sign the home construction contract with your builder.

Begin Construction!!

Home construction hammered by cost

FORECAST: Rising material prices, less land curtail Anchorage building, but demand for housing is still high.

By PAULA DOBBYN, Anchorage Daily News Published: March 22, 2006

Anchorage home-builders forecast a significant drop in the number of new homes to be built in the city this year compared with 2005, but real estate values are expected to remain strong.

Some 550 single-family homes are expected to go up in 2006, nearly 19 percent fewer than the 675 built last year, the Anchorage Home Builders Association projected Tuesday.

Builders and Realtors blamed the decline on land shortages coupled with higher costs for materials, labor and various types of insurance, including workers' compensation and general liability.

As a result, developers are building fewer homes or ones with smaller footprints because land is tight and increasingly costly, said Bob Hayes, an Anchorage real estate appraiser.

In light of that, more people seem to be forgoing new homes in favor of remodeling or tacking on additions, especially in Midtown and downtown neighborhoods close to job centers, Hayes said. Those parts of town exude "a young Seattle atmosphere," he said.

Seattle is hemmed in by lakes while Anchorage growth is limited by the mountains and Cook Inlet, Hayes said. Neighborhoods where commute times are short or where people can walk to work are becoming increasingly attractive.

While construction of new single-family homes may drop this year, the number of remodeling permits issued will jump by as much as 35 percent, the association forecasts.

It's a continuing trend; remodeling permits rose about 23 percent last year, the association reported.

As buildable land disappears in Anchorage, residents will become more amenable to seeing mid- to high-rise buildings go up, Hayes predicted.

With construction down and mortgage interest rates edging up, sales of new single-family homes have cooled recently and 2006 is turning out to be the slowest market since 2000, said Pat Baker, a broker with Northern Trust Real Estate.

The Alaska Multiple Listing Service, which tracks properties on the market, showed 137 new single-family homes available for sale in February. That's way down from the 395 available during the same period in 2001. For new condos, there were 144 listed this February compared to 351 in February 2003.

"There's a real tightening of the market," Baker said.

But demand remains strong. It takes only about a month to sell a home priced at $250,000 or less.

"Anything under $200,000 flies out the door," said Baker.

"We simply do not have the product to sell," she added.

The price of Anchorage real estate continues to climb.

The average sale price of an Anchorage home at the end of last month was $315,000. In 2005, the number was $302,300, and the prior year it was $291,000. By contrast, the median home in 1995 sold for $147,500.

"The demand for homes in Anchorage will likely remain robust, but finding that home won't be easy," said Ray Hickel, president of the home-builders association.

The price spike for new homes is partly being fueled by higher material costs, a trend that is expected to continue throughout 2006.

Prices for Sheetrock and plywood are skyrocketing and the materials are getting hard to come by, in part because of the flurry of post-hurricane reconstruction activity in New Orleans and the Gulf Coast, said builder Eric Schach, owner of Alaskan Homecrafters Inc.

"Plywood has increased by almost 100 percent," he said.

The cost of construction materials is outpacing overall consumer and producer prices by a wide margin, said Ken Simonson, chief economist for The Associated General Contractors of America.

Land prices are also on the rise.

A 9,000-square-foot lot in Anchorage's Sand Lake gravel pit sold for about $89,000 this time last year but today sells for $135,000, the association reported. A one-acre lot on the Hillside costs about $200,000.

Daily News reporter Paula Dobbyn can be reached at pdobbyn@adn.com or 257-4317.