I spent last weekend in the Valley visiting new home communities in the Mat-Su Spring Preview of Homes. The last time I was in the Valley, I came within a few inches of hitting a moose crossing the Knik Goose Bay Road in the dead of night so I was glad to see the KGB road improvements under way. I’m not a total stranger to the Valley. For several years, I owned a second home on the North Shore of Big Lake. But that was when you stopped at Blockbuster to rent your movies and before Fred Meyer’s became the ‘Whole Foods’ of the Valley.
The Mat-Su Borough has 16.165 million acres of land and according to the U.S. Census Bureau’s 2018 American Community Survey 103,464 residents. That compares to 1.244 million acres of MOA land and a population of 291,538. The Mat-Su has 156 acres per resident compared to the MOA’s 4.26. The availability of land for residential development equates to larger lots and lower home prices. Most homesites in the Valley are at least an half acre to an acre. The ‘Valley’ acre is just shy of a acre. These lots with private well and septic systems average in cost between $55,000 to $65,000. Half acre lots have public water or community water systems with individual septics. These lot values are approximately $75,000 less than Anchorage’s. In addition, newly developed lots in Anchorage with all utilities have a much smaller footprint, ranging from 6,000 to 10,000 square feet. Many of Anchorage’s hillside ‘in-fill’ lots have soil conditions that make any development extremely expensive in addition to the higher asking price.
The lower cost of a homesite makes for a better priced home in this market. In the Spring Preview of Homes, I visited an 1,800 square foot ranch with a triple car garage on an acre lot with a window framed view of Pioneer Peak for $371,000. In Anchorage, that same home would cost $200,000 more! A two story 2,146 home with a triple car garage was priced at $381,387. A similar home in an Anchorage community with all public utilities would be over $525,000.
One added cost to an Anchorage home is the time it takes to build a home or a subdivision. Multiple inspections create delays which in turn costs interest on borrowed funds at commercial rates, sometimes as high as 6.5%. The MOA also pushes off the extension and costs of off-site roads and utilities on to private developers which increases the cost of a lot.
According to the December 2019 issue of Alaska Economic Trends, nearly a third of Mat-Su residents drive to Anchorage each day, about an hour and a half round trip for most. They earn a higher wage in Anchorage and are able to live on a larger lot in a home with more square footage. The downsize is they spend approximately 7.5 hours per week or almost one full work day in their car.