So we always talk about housing but what about the land needed to build it on?
We have all heard of gold, silver, zinc and lead but there are a host of Rare Earth Elements (REE) such as Terbium, Lanthanum and Neodymium that are critical for radar systems and consumer electronics.
Although China has half of the world’s rare earth elements, Alaska is considered a strong potential source of rare earth also.
As rare as rare earth elements may be, we might also say that any earth is now becoming rare, particularly in Anchorage where buildable lots are few and far between. Those remaining tend to be either in remote Hillside locations, undesirable soil locations or undesirable neighborhoods. Eagle River has a slightly more favorable availability of buildable land.
Let’s take a look:-
Anchorage Residential Single Family Zoning:
If you are looking for an R1 suburban residential lot today, you have only 17 choices on the market ranging from $8,500 at the low end to a lot on Campbell Lake at $545,000.
If you want a larger, 1 to 5 acre lot (mostly Hillside) and zoned R6 or R9 you have 33 choices, but many are a significant winter drive to shopping areas and business districts.
About half of these large lots, all less than $350,000, are not selling right now because new construction costs are outrageous, plus you need a well and septic in most cases (Add on $30,000 to $50,000)
Frankly, some of this rare earth might be worth an investment since prices can be negotiable, but the holding cost of property taxes must be factored in (around $15 per $1,000 value is the mil rate).
Eagle River Residential Single Family Zoning:
While zoning classifications are different in Eagle River, we may say that there are only 5 suburban Eagle River lots for sale under 15,000 square feet and 3 of those are in Powder Ridge.
1 to 5 acre lots in Eagle River (all less than $300,000) are more available – 27 for sale, but you may have a few miles to handle up Hiland Road or down Eagle River Road and access may be steep.
(Note: Lots available are per MLS at time of writing and do not include some that are for sale but not in MLS).
Single Family Development Anchorage and Eagle River:
Subdivision Developers will continue to find tracts to create new residential neighborhoods but the pressure will be on (once building material costs normalize) because of one undeniable fact of life.
Anchorage is bordered by ocean and inlet, mountains and military. In other words, Anchorage is 95% built (at least) and cannot physically grow.
For many years now, wise development heads have been predicting the inevitable push along the Eagle River/Chugiak corridor even if you have to commute to Anchorage. Palmer/Wasilla continue to expand rapidly for the very same reason – somewhat lifestyle choice but more so cost of new home.
Multi – Family Opportunities:
There is available capacity for multi-family construction and many vacant lot opportunities for that as the Municipality wants denser housing to provide for future population expansion.
First Paragraph "It was just a normal day before Dr. David Egilman called me out of the blue on November 28, 2006. The days are short that time of year in Anchorage, Alaska, and it was getting dark by mid-afternoon. Dr. Egilman told me he had been hired as an expert witness by one of the law firms representing patients who had taken Zyprexa and contracted diabetes or other metabolic problems. He wanted to know about documents relating to Zyprexa I might have. In truth, he was feeling me out to see whether I might be willing to subpoena him, so he could legally send me secret documents. These documents revealed the pharmaceutical company Eli Lilly (Lilly) had from the beginning suppressed information showing Zyprexa caused these life-threatening conditions. In addition, they showed Lilly had illegally marketed this powerful and dangerous drug for use in children and the elderly. He wanted me to then send them to Alex Berenson, a reporter for The New York Times with whom he was already working on a Zyprexa exposé." Continue Reading...
Less than a month later The New York Times began a series of front-page stories about the documents subpoenaed by Jim Gottstein, which became known as the Zyprexa Papers. A month to the day after the first of these New York Times articles, Gottstein had been hauled in front of the legendary United States District Court judge, Jack Weinstein, of the Eastern District of New York in Brooklyn. Although Mr. Gottstein believed he obtained the Zyprexa Papers legally, Judge Weinstein decided he had conspired to steal the documents, and Lilly threatened him with criminal contempt charges. The Zyprexa Papers by Jim Gottstein is a riveting first-hand account of what really happened, including new details about how a small group of psychiatric survivors spread the Zyprexa Papers on the Internet untraceably. All of this within a gripping, plain-language explanation of complex legal maneuvering and his battles on behalf of Bill Bigley, the psychiatric patient whose ordeal made possible the exposure of the Zyprexa Papers.
Alaska’s Mental Health Crisis Predates Statehood
Editor's Note: Read about how the Law Project for Psychiatric Rights (PsychRights) and Alaskan Public Interest attorney, Jim Gottstein took on the State of Alaska AND Big Pharma and Won!
I can pull 78 such listings in Anchorage alone at this time, from Duplex through Apartment Block zoned lots.
First Paragraph "It was just a normal day before Dr. David Egilman called me out of the blue on November 28, 2006. The days are short that time of year in Anchorage, Alaska, and it was getting dark by mid-afternoon. Dr. Egilman told me he had been hired as an expert witness by one of the law firms representing patients who had taken Zyprexa and contracted diabetes or other metabolic problems. He wanted to know about documents relating to Zyprexa I might have. In truth, he was feeling me out to see whether I might be willing to subpoena him, so he could legally send me secret documents. These documents revealed the pharmaceutical company Eli Lilly (Lilly) had from the beginning suppressed information showing Zyprexa caused these life-threatening conditions. In addition, they showed Lilly had illegally marketed this powerful and dangerous drug for use in children and the elderly. He wanted me to then send them to Alex Berenson, a reporter for The New York Times with whom he was already working on a Zyprexa exposé." Continue Reading...
Less than a month later The New York Times began a series of front-page stories about the documents subpoenaed by Jim Gottstein, which became known as the Zyprexa Papers. A month to the day after the first of these New York Times articles, Gottstein had been hauled in front of the legendary United States District Court judge, Jack Weinstein, of the Eastern District of New York in Brooklyn. Although Mr. Gottstein believed he obtained the Zyprexa Papers legally, Judge Weinstein decided he had conspired to steal the documents, and Lilly threatened him with criminal contempt charges. The Zyprexa Papers by Jim Gottstein is a riveting first-hand account of what really happened, including new details about how a small group of psychiatric survivors spread the Zyprexa Papers on the Internet untraceably. All of this within a gripping, plain-language explanation of complex legal maneuvering and his battles on behalf of Bill Bigley, the psychiatric patient whose ordeal made possible the exposure of the Zyprexa Papers.
Alaska’s Mental Health Crisis Predates Statehood
Editor's Note: Read about how the Law Project for Psychiatric Rights (PsychRights) and Alaskan Public Interest attorney, Jim Gottstein took on the State of Alaska AND Big Pharma and Won!
Business and Commercial:
We will cover in a later article but the opportunities are limited and shrinking.
Summary:
There are not a lot of lots remaining for Anchorage new homes (single family). The future of such homes is actually in ‘Tear – Downs’.
New single family properties will be built where old structures are no longer viable and, as population and demand increase in the years ahead, buyers will absorb demolition costs ($40,000 to $50,000) for good locations.
As it happens, just last week I facilitated such a sale and the interest was strong enough to pre-empt any MLS listing. Buyer will simply demolish the old structure.
Land Investment:
My good friend, now deceased, Dominic Gospodor, made a fortune investing in Anchorage Bowl land and, although humbly cruising the streets on a bicycle, he was one of the wisest real estate moguls I have known.
Investing in land, especially if it has some rentable structure to cover property taxes, is an excellent use of savings and a hedge against inflation.
Financing your land purchase:
So how do you buy land? The best method, of course, is cash but, if you need to borrow to buy, the first choice is to take equity out of your home with a re-finance. The reason for this is that the interest rate is much lower Most Credit Unions will finance land for 25% down (e.g. Alaska USA) but the interest rate will likely exceed 8% compared to a refinance of your home at less than 6% interest.
You also can try asking the seller to do owner finance if they own the property outright. A last option, but only if you intend to build immediately, is when your contracted builder acquires the lot and you just pay for your completed new construction at closing with a regular home loan.
Conclusion:
I have no hesitation in predicting the escalating value of Anchorage and Eagle River land.
Rare Earth? Get some – you can’t lose.
