adn.com | Money : Housing hard times hit builder and his clients

adn.com Money : Housing hard times hit builder and his clients

HOUSING MARKET WOBBLES
Baker's troubles seem to coincide with a slowdown in the local housing market.

Home sales have dropped, builders are seeking fewer construction permits, and homeowners are having to wait longer to sell their properties.

Foreclosures also have surged as some homeowners struggle to make mortgage payments.

But builders and other players insist the sky isn't falling for the local real estate market.

They say the Anchorage area isn't experiencing anything like the collapse of the late 1980s, when home construction far outstripped demand, prices crashed and many builders, bankers and property owners found themselves hopelessly under water.

They also say the Alaska housing market has remained fairly isolated from the Lower 48 housing depression brought about in part by easy loans to home buyers with weak credit.

Dan Fauske, who heads the Alaska Housing Finance Corp., a state lending agency, contends the local market is sound, though not what it was a couple of years back.

"It's actually, in my estimation, a pretty good buyer's market," he said.

Still, Fauske and others said it's not surprising the downturn could nail some builders such as Baker's Discovery after a string of bullish building seasons.

"Last year, people were pretty much in denial that nongrowth was happening," said Chuck Spinelli, owner of Spinell Homes, one of the area's largest home builders. "Everybody thought that by spring and summer of last year, this little hiccup bubble would be over and we'd be on the fast track again. By fall, everybody realized it didn't happen and there were some harsh realities showing through."

The whole local housing industry has tightened up for leaner times, he said.

Spinelli said he normally builds and sells 150 homes a year on average. But that slowed to 88 homes last year, he said.

"Nobody is out there lending money on speculative building the way they were a year and a half ago," he said.