A Mid-Year Recap and Outlook for 2025

When I first came to Alaska in the l970’s, my boyfriend and I drove up the Alcan and I cried all the way; ate oatmeal cookies, Chinese food and just wanted to know if big planes flew to Alaska cause I wanted to go back to California where I had emigrated to from the University of Iowa. Well, the rest is history. Alaska and Anchorage is my home. And instead of the Alcan, I now drive the Seward highway to Girdwood and Homer, always stopping to and from in Soldotna for coffee (and a snack) and up the Glenn to Palmer and Wasilla. I’ve learned a lot about Alaska in my almost 50 years here and what I know most is that Anchorage is my hometown and always will be.

Anchorage is the most expensive community to own a home with the exception of land and water locked Juneau. The average Anchorage sales price in 2024 was $509,261. Mid-year 2025, the average sales price is $523,199. Year to date appreciation is 2.58%, the lowest in the past five years. One could say, our Anchorage housing market is in a stall. As I have often repeated, it is not the market that dictates an individual’s decision to buy or sell, but the more personal events in one’s life –marriage, birth, death, divorce and job change that creates activity. What does occur, however, is how the value for a home purchase or sale is created based upon factors that Alaska has, little or no control over. Looming over our current residential market are the on again, off again tariff threats which national economists predict could increase the cost of housing from 10 to 30 percent. Should those tariff threats become reality, you can be assured that the cost of a new built, a remodel or home maintenance will increase greater than the rest of the nation because everything that goes into a home in Anchorage, or Alaska, for that matter, will cost more due to the fact that everything is imported from the lower 48 and the world. Trading partners are the lifeline in Alaska housing. The monthly mortgage interest payment is the highest cost of home ownership. A tick up or down can create more buyers or kick first time home buyers off the first rung of the housing ladder.

However, Anchorage’s luxury home market appears immune to tariffs and mortgage rate increases, as well as increases homeowner’s insurance. There were 42 closed sales over $1 million in 2024 and 14 of those were above $1.5million. DeArmoun Road-Potter March had the highest average sales price of $981,583 and Girdwood-Turnagain Arm at $812,444 which value would be higher except for the lack of inventory. South Anchorage whether on the hillside or off 100th appears to have the best opportunity for growth whether residential or retail. Meanwhile, the housing ladder wobbles from the first rung to the muddling middle rung. People buy and sell based upon changes in lifestyle. Aging boomers are returning to Alaska to be near their grandkids. Every buyer wants a backyard for children and their dog. Yet, single women with an average age of 38, who have the majority of the first time home market, want security and a contemporary motif. Out with the brown and in with the Swedish white/beige.

So for the rest of 2025, not much will change unless interest rates take a dive and the threat of tariffs recedes. Otherwise, buyers and sellers will muddle through another six months of buying what they need to have and make the best of the limited new construction market and dealing with home inspections and life/safety repairs on resale houses that average over 40 years old. The good news is, buyers are not maxing out their loan limits and sellers are becoming more flexible in recognizing the age of their home and the need for deferred maintenance repairs and safety upgrades in order to sell their home.