Anchorage metropolitan area housing prices rose 8-9% in 2020
ANCHORAGE, Alaska (KTUU) - Housing prices in the Anchorage metropolitan area, which includes the Matanuska-Susitna Borough, jumped in 2020, according to a U.S. Department of Housing and Urban Development report.
Nearing the end of 2020, there was more demand for homes than what was listed for sale in that area, according to the report.
“We don’t want to say it’s good or bad for the overall economy,” said Sam Young with the department’s Market Analysis Division. “It’s good or bad for certain people within the economy.”
He said it can be good for a homeowner because it boosts equity. However, higher prices can be bad for a buyer.
According to the report, between 2015 and 2018, home prices only went up about 2% annually, and it stayed steady in 2019. However, during the 12 months ending in November 2020, new home prices shot up 9% to an average price of $447,200, according to the report.
“A home price growth that you’re getting a 9%, that means that home prices would double every 11 years, which is a pretty steep increase in home prices,” Young said. “And so that can exacerbate affordability concerns for people who are trying to live in Anchorage.”
Existing home prices also jumped. It went up 8%, bringing the average price to $339,300 by November 2020, according to the report.
But the Anchorage metropolitan area’s rental market conditions were considered balanced by the end of 2020, according to the report.
“So if there’s a steep increase in what people are being asked to pay for rent, that would be indicative of a tight market, which was not happening here,” Young said.
While rent prices in the area slightly decreased at the end of 2020, according to the report, there may have been an extra strain on rentals as university students were moving off campus at the beginning of the pandemic.
“That puts pressure on the apartment market if they don’t have a family nearby or easy access to get home to live there,” Young said.
He also said fewer apartments were built while there was a higher demand, which can lead to more strain on the system.
Between January and September 2020, only 290 new apartment units were completed in the area, according to the report. That’s down from 400 in the same time period a year before.
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