Area housing prices stable in face of ongoing recession
Knock on wood: The Anchorage housing market continues to hold steady, even in the face of lurching job loss and economic pain, according to state economists.
Home prices have remained relatively stable, said Neal Fried, an economist with the Alaska Department of Labor and Workforce Development. Sales numbers have remained relatively stable, too, he said. The rental vacancy rate has climbed, according to housing experts, but the number of foreclosures continues to decrease. Overall, they said – so far, so good.
“It’s been sort of an interesting, somewhat surprising, response,” Fried said during a recent interview.
The local housing market’s resilience could be linked to the slow pace of recent new construction, Fried said. The community saw only a moderate number of new homes built over the course of the past decade, he said. He said last year was especially slow.
While scant housing options have triggered long community discussions about new development and affordability, they also offered a silver lining, Fried said: When the state’s ongoing recession hit, there was no massive surplus of unoccupied homes to be sold. That’s helped keep prices steady, he said.
Eagle River homeowner Mari Gallion is one of the many locals pondering putting a home on the market.
After growing up in Eagle River and raising her son there, Gallion said she’s preparing to send her son off to college and move to New York. She’s not doing it for economic reasons, she said.
“I bought this place when they were first being built in 2001,” Gallion said, standing in the driveway of her Eagle River home one Sunday morning in June. “I really love it here, but after suffering two different types of cancer two winters in a row, I’m like, ‘I can’t do another winter.’”
She said she was still deciding what to do with her home, a modest two-bedroom in a quiet subdivision at the edge of Chugach State Park on a street dotted with “for sale” signs.
“I’m not sure yet if I’m going to rent it out or sell it — I get different advice from different people, so I’m still deciding,” she said. “And there’s still a chance it’s not going to happen right now: If I can’t get out of here before the snow flies, I’m going to stick around for another winter and do it in the spring.”
The local housing market isn’t completely free of fluctuation, experts said.
While Anchorage area rental vacancy rates have increased by approximately 1.5 percent from last year, according to state economist Karinne Wiebold, the number of single-family homes available for sale decreased by around 11 percent over the same period. In March, local realtors reported 120 homes for sale in the Chugiak-Eagle River area.
“The lower sale inventory provides some buyer competition, which might be contributing to keeping the sale prices from falling,” Wiebold said.
The differences between the current economic climate and the Alaska recession of the 1980s are striking, economists said. In 1989, the foreclosure rate peaked at more than 10 percent, according to the Alaska Department of Labor and Workforce Development. At the end of 2016, the department reported, the number was 0.6 percent.
The reasons are myriad, Wiebold said. Today’s Alaskans are more embedded than the new, more transient population of the ’80s, she said, and today’s market is influenced by factors ranging from low interest rates to population differences to a consistently slim sales inventory.
“All of this is kind of a cumulative effect – you can’t just say it’s one thing,” she said.
Email Star reporter Kirsten Swann at firstname.lastname@example.org