Throughout the recent recession many wondered when the housing market would feel the pinch. The price for a single-family home in Alaska has remained stable during the recession that started in 2015. This is mostly likely due to a few different factors. Low interest rates, migration patterns, measured selling and buying, and controlled building were likely part of the reasons for the stable prices. Many of the jobs that were lost were from non-residents, who don’t own homes in Alaska.
Interest rates have remained low over the past three years, which means that houses are more affordable to more people. More people have moved out of Alaska than have moved in. This has helped to keep housing prices low. Buyers and sellers have been moving at a slower pace than usual, which has helped maintain housing prices. Finally, there has not been a huge push to build new housing. New units have stayed slowly decreased in the past three years. There has been less competitive bidding, fewer buyers, and lower sales volume, but less activity hasn’t driven housing prices down.
Overall housing prices have become more affordable, down payments and mortgage insurance continue to be barriers to homeownership. To avoid mortgage insurance a home buyer needs to put down twenty percent, on the average home price in Alaska, this is upwards of $65,000. This is a large amount for most people to be able to afford, even with low interest rates and stable prices. Potential buyers are likely waiting on the sidelines and saving money for a down payment and other expenses.
All of these factors have led to stable housing prices during the current recession. Homes are selling relatively quickly, but there final sale price is often close to the asking price as there are fewer bidding wars as there were in the past.
More details on Alaska’s housing market can be found at the State of Alaska’s website.