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Anchorage housing market trends

Difficulties in providing affordable housing to residents in urban areas are not just a problem in the Lower 48, but exists in Alaska too.
Published: Apr. 10, 2022 at 5:14 PM AKDT
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ANCHORAGE, Alaska (KTUU) - Difficulties in providing affordable housing to residents in urban areas are not just a problem in the Lower 48, but exists in Alaska too.

With shortages of homes on the market, low interest rates, higher rent pricing and record-high home sale prices, the housing market in Anchorage has changed dramatically in recent years. Prospective and current homeowners are questioning whether the more affordable prices will return or not.

“You’d think that we don’t have land issues but here in Anchorage of course we do. We’re surrounded by ocean and mountains and there is not a lot of affordable, available, developable land in the Anchorage Bowl that is available to builders and developers and that becomes a problem,” Droege said.

The number of available homes in Anchorage have dwindled below the number of interested homebuyers. Prior to the COVID-19 pandemic, available inventory was measured by month. However, real estate inventory is now being measured by the day. Century 21 Realty Solutions CEO Michael Droege said that the housing market was currently at a 17-day turnaround, meaning if no other homes went on the market, the inventory would run out.

Droege said that land issues are a contributing factor. Anchorage also suffers from a lack of space and supply chain issues, creating further difficulty in building new housing. Rising petroleum costs have also exacerbated the problem, impacting petroleum-based products such as roofing and carpeting.

Homes are remaining on the market for a much shorter period of time, which has also driven up prices from homebuyers who are increasingly determined. State Economist Neal Fried said that the median cost of a single-family home in Anchorage in 2020 was $394,000, which has since jumped to $430,000.

“Last year we built the fewest number of new homes since 1989. 1989 was a long time ago, and our population in 1989 was significantly smaller than what it is today so we aren’t adding a lot of new housing stock into Anchorage’s market. Even state wide we’re not adding a lot of new housing stock,” Fried said.

Fried said that it is impossible to determine if and when the housing market might return to a more typical price range.

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