Spring’s Housing Market Takes a Difficult Turn

As a result of the covid-19 pandemic, 2020 will be forever remembered due to Alaska’s closed schools and businesses and the resulting upheaval of lifestyles and professional and financial disruption.  Every Alaskan community and citizen reacted differently to the pandemic restrictions and yet, despite the financial and economic upheaval caused by the pandemic, Alaska’s per capital income rose by 3%.  According to Alaska Economic Trends, ‘two thirds of income comes from what people earn at their jobs or through self-employment and the remainder comes from dividends and interest earnings as well as government checks.

Coming on the heels of a three-year recession, the $47 billion increase in income has undoubtedly played a major role in jump starting the housing market. Coupled with historic low interest rates and the individual income increase, the first quarter of 2021 appears to continue the record-breaking housing sprint.   And all you need to do is talk to frustrated buyers to understand it is a sprint to the closing table

Even during the recession, local economists called for a minimum of 400 housing starts in Anchorage, but less than 200 single family home permits were issued for each of the past three years, creating an historic housing shortage.  So just how short is the housing inventory? Take this quiz to find out. 

1. How many single family homes were for sale last week between $350,000 to $400,000?

A. 10 B. 21

C. 28 D. 37

2. If you were looking for a 4 bedroom, two bath home with a double car garage in District 20 (southwest Anchorage) with an average sales price of $350,000 to $400,000 how many would be available?

A. 10 B. 15

C. 1 D. None

3. If you were looking for the same home in District 30 (southeast Anchorage) how many would be available?

A. 8 B. 18

C. 1 D. None

4. Has the number of residential sales sold in the first quarter of 2021 increased or decreased from the first quarter 2020?

A. Increased by 15%

B. Decreased 8%

C. Stayed about the same

5. From 2020 until today, have condo values increased or decreased?

A. Increased by 5.58%

B. Decreased by 3%

C. Stayed about the same

6. As reported in MLS, how many million-dollar homes sold in 2020?

A. 13 B. 23

C. 33 D. 47

7. The housing shortage is not just in the MOA. For example, when comparing March 2020 to 2021 single family inventory in the Mat Su Borough what has been the decrease in inventory?

A. 12% B. 23%

C. 37% D. 50%

8. The average Mat-Su sales price is $317,324 compared to Anchorage’s at $399,434.

The Mat-Su price has increased by what percentage since 2020?

A. 5% B. 12% C. 15%

9. The Anchorage price has increased by what percentage?

A. 6.52% B. 16%

C. Stayed the same

10. The Kenai Peninsula Borough has had what decline in residential active inventory when comparing March 2020 to 2021?

A. 10% B. 25% C. 50%

Alaska’s housing shortage begins with a lack of residential land that can be developed at a reasonable cost for utility extensions and road access.   Ninety percent of Alaska land is owned by federal and state governmental entities and Alaska Native Corporations. Of the 365 million acres, only .9 million acres is privately owned.  More land needs to be available for residential development which will in turn increase our housing stock and home ownership.

Answer Key: 1. A  2. C   3. C   4. A   5. A   6. D   7. D   8. C   9. A   10. C