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Is there value in the REAL value?

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  • Is there value in the REAL value?

    I live in Alaska and for the past two decades the real-estate industry has been swelling at an alarming rate. Homes that were aquired in the range of 100K-200K with a little TLC, have until recently, were selling for double and triple thier purchase price in little more than six to seven years. Anchorage has reached max capasity and as a result, people are fighting to stake a claim in investment property in the Matanuska Valley (50 miles North).
    However, this has created a problem.....
    In the attempt to move large volume of homes in a short time, builders have tripled thier employees, to in turn, triple prouction. As a result, our very small community has multiplied the amount of vacant single family dwellings by 300%. Now owners who are eager to sell, are doing so at the tax assessed value, rather than appraisal (at a loss of 15-35% from appraised value)
    Reasoning for this is that our Bourogh being primarily rural has no mandatory requirements for biulding permits, so there is no way to tell how many new homes are going up at one time. At this time, lenders are hesitant to lend funds for speculation homes, and people are afraid to buy, for fear of getting into a loan that has potential for going upside down.

    Is this a trend seen anywhere else?

  • #2
    Not sure about the USA, but here in the UK there's a similar sort of movement in the property markets, I should think - basically, working as a brake on the rising house prices to keep supply and demand in check.

    Oh - and welcome to Property Watch.