Well, according to the July issue of Alaska Economic Trends, the Juneau quarter pounder with cheese at $5.29 is the fourth most expensive burger in the U.S. The Anchorage burger at $5.02 fell out of the top ten and now ranks 11th. Mimicking the burger, Anchorage is also no longer Alaska’s most expensive place to live. It’s Juneau. According to the report for the first quarter 2018, Anchorage’s consumer price index is 134 compared to Juneau’s 145.4. That may not be much consolation for Anchorage’s residents who spend an average of 40.5% of their income on housing. However, there are now sixteen cities that have higher costs of living than anywhere in Alaska, including Seattle, which now ranks sixth in the nation. Anchorage is most comparable in cost of living to Portland, Oregon, a city that is frequently mentioned by local planners as the place to model our future planning after.
So has the Anchorage housing market cooled as a result of Alaska’s recession? That’s what the report says, along with stating the average home price hasn’t changed much at $367,743 and the rental market has softened with increased vacancies. What I would say, however, is that the local housing market has weathered the recession remarkably well with only a 3.2% decline from original list price to closed price. But when the home’s price is adjusted, the home sells for 1.3% of listed price. This adjustment indicates that sellers may still be holding on to an unrealistic expectation of appreciation which has not occurred during the past three years. Prior to that time, however, from 2012 to 2015, appreciation was a cumulative 13.3%. If you purchased during that time, you have equity and can afford to sell. If you’ve bought in the past three years, wait for future appreciation before selling or if you are in a newer condo or home, that area of the rental market is still very desirable.
I would attribute the majority of our decline in value to the thirty-five year plus age of our housing inventory that is now requiring new roofs, mechanical and electrical systems as they reach the end of their life expectancy. Plus, the traditional two-story floor home with both a living and family room on the first floor is not attractive to the millennials’ more casual lifestyle. So in answer to the question ‘has the Anchorage market cooled’? I’d say no more than five degrees with mild temperatures continuing until late fall.
Dwell Realty is proud to announce it is sponsoring a weekly radio show devoted to real estate. The show airs live every Thursday from 2 to 2:30 pm on KENI-AM (650). Call in your questions to Connie each week.