The price of buying a home in Alaska jumped almost 9% from 2020 to 2021, according to an economic trends report from the Alaska Department of Labor and Workforce Development.
The report stated that a combination of low interest rates, limited inventory and the increase in prices in 2020 contributed to a tight housing market. In particular, the data showed higher-than-average number of houses closed on, with fewer days on the market and not as many active listings.
The eastern peninsula of Seward, for example, has been struggling with a housing crisis for the past few years — exacerbated by the COVID-19 pandemic and new influx of seasonal employees, as well as a competitive short-term tourism rental market.
The demand for housing in Seward has always outpaced supply, according to previous Clarion reporting, but buying has proven to be more difficult for people lately. Listings in Seward typically drew between two and four offers in 2019, but had been receiving between eight and 15 offers by 2021. Some people put offers down before walking through a home, some closed on houses with cash offers, and others even waived appraisal gaps, the Clarion reported.
Similarly, across the state, the Department of Labor and Workforce Development reported that many houses were selling at the asking price or even higher in 2021. The average price of a single-family home in Anchorage last year was almost $389,000, which represented a near 9% price increase from 2020 and the third-largest hike in almost 30 years.
Although interest rates were low in 2021 — 2.93%, down from 3.16% in 2020 — the report states that signs point to “higher rates in the coming months.” Even so, low interest rates kept housing payments manageable — despite record-high costs.
But, the report states, a rise in wages might make housing seem more affordable than it is. Even though Alaska’s wages grew 7.2% from 2019 to 2020, a lot of jobs were lost over that time as well, mostly in lower-paying industries such as food service and hospitality.
Bethel has been the least affordable area over time, according to the report, because of the high sales prices and lower wages. But recently the area has become more affordable. Because of higher wages, homes in Juneau were more affordable on average than homes in Bethel and Ketchikan.
One of the most affordable living situations is for the people who own homes in the Matanuska-Susitna regions and work in Anchorage. The report states that wages in Anchorage were 32% higher than in the Mat-Su, while houses in the Valley were 18% lower than in Anchorage.
See the full economic trends report at https://labor.alaska.gov/trends/jun22.pdf.
Reach reporter Camille Botello at email@example.com.