According to the 2021 U.S. census, there are 327,890 occupied housing units in Alaska which amounts to about two people per household. That’s an interesting statistic but what is even more interesting is the age of the housing stock. The median age for a dwelling in Anchorage is 42 years! That’s about the year I started selling residential real estate. Forty years is way past the time of cosmetic obsolescence and falls even past functional obsolescence. It’s when roofs, water heaters, furnaces and sometimes even foundations (especially if they are wood) are past their economic life. But, that’s what we have to sell in today’s market. As a side note, the median age of a Wasilla home is 30 years; Palmer is 37 years.
The MOA May building permit report had 100 single family permits YTD. That’s an increase of fourteen permits from 2021. But, unfortunately, it is not nearly enough. It would take years, maybe even decades, to decrease that median age. Anchorage doesn’t appear to have the will or land to build its’ way out of our lack of housing crisis. To put that median age into perspective, the most popular mortgage is for 30 years. Granted, very few homeowners spend 30 years in their home but as homes age, most values decline, despite remodeling or refreshing.
Urban Alaskans spend approximately 40.6% of their income on housing which doesn’t include increases for utilities. And they are still buying homes, despite that 30 year rate hitting over 5%. June is always a popular month for putting your home on the market and this past June inventory increased by just over 100 units. Sales were up from May 2022 (270 compared to 306) but certainly down from closed June2021 sales of 371. So what to make of this bump down and inventory up. Not much in my opinion, Anchorage will have a housing shortage for a very long time. I have one buyer who is only interested in buying after a home built since 1992 which is when building codes became more aggressive. Then, there are buyers who are not interested in buying a brand new home because they cost at least $100 more per square foot than a resale. I have to remind them that they will have expensive repairs and maintenance in coming years. As well as higher utility bills due to lower building standards.
On the other hand sellers need to realize that maintenance and repairs, remodeling or refreshing, are not costs that will increase the value of your home and that they can’t expect a 100% increase from their expenditures. What they can expect is less time on the market and hopefully multiple offers and a minimum of negotiations for home repairs. And if all this is a little too much to think about on a sunny Wednesday morning, be grateful you live and own, or hope to own, a home in Alaska, where the cost of living is less than Hawaii, New York, California, Massachusetts or Oregon. Alaska has now dropped to 6th place.
As always, thank you for your referrals. Whether considering buying or selling, feel free to give me a call/text and we can discuss the real estate market, 907-229-2703.