11 Jan 2023 Seward Real Estate Market Review
Overall, home sales were down across the state of Alaska with 14% less listings and 25% less homes sold. The average home sales price in the state did go up 4% but the overall volume of residential properties sold was down 23%. Less homes sold this past year is due to a lack of inventory as opposed to a lack of buyers.
This trend is similar to what the rest of the United States is experiencing. While home values are still going up year after year because of low inventory, the rate at which homes are selling has slowed down and there have been less buyers making offer. With residential mortgage rates rising as high as 7.57% in October, many buyers put the brakes on buying.
Looking further at four major cities on the Kenai Peninsula, all of these locations saw a decrease in active listings and sold listings in 2023 as compared to the previous year. Kenai, Soldotna and Homer had 20-27% less sold homes this year.
Seward experienced the most significant decrease in sold homes in 2023, of 37%. This represents a decrease from the average 43 homes sold annually in Seward to just 24 in 2023. That is the lowest amount of sold homes in Seward in more than ten years.
The majority of the homes sold in Seward were in the $350,000 – $450,000 range which aligns with the historic average home price in Seward over the past few years.
Because Seward had the most significant decrease in homes sold, the days on market for houses decreased, average home priced increased, and the total sold volume was most similar to the previous year, as compared to other cities on the Kenai Peninsula.
Decreasing demand due to higher interest rates has effectively slowed down the market to a more manageable pace. For the time being, the stressful days in 2021 and 2022 of having to make an offer within 24 hours of seeing a property and competing against 10 other buyers is on pause. However, Seward is a location with severely limited inventory and significantly more demand for homes than availability so it is likely that home values will continue to rise at their average 5% per year, even if sales slow down.
Over the past few years we have seen some scary predictions of a potential real estate market crash but that is unlikely. While mortgage rates are higher than they’ve been in many years, many economists predict that the rates will start to go down over the next year, which will bring demand back up. Overall, there is still a relatively low supply of home listings, which keeps buying competitive and home prices steady in our local market.