Anchorage Housing Costs

It’s no secret that housing nationwide represents the largest share of consumer spending and Anchorage residents are no different.  According to the U.S. Department of Labor, Anchorage residents spend a whopping 41.3% of their income on housing, making it the most expensive place in Alaska to live.  However, it is still slightly less than the national percentage of 41.9%. According to the same reports, it should come as no surprise that we spend about 1 percent more on recreation (why we live here) and transportation (it’s a big state) than lower 48 residents and l.2% less on education (we should do better) and communication but overall, we’re not much different than other U.S. communities, even though we like to think we are.

In 2010 the average state wide price for a single family home was $282,000 but Anchorage topped even the ‘no road’ communities of Juneau and Kodiak at $328,000.  The cost of a single family home was lowest in Bethel at $225,000.  Mat-Su Borough was below the statewide average at $240,000 and the Kenai Peninsula was the second lowest in the state with an average sales price of $229,000. This confirms what most of us in the local real estate business know that if you want a home with more square footage and a larger lot, head to the Valley or south to the Kenai.

The most recent data available shows that in Anchorage it takes 1.44 wage earners to buy the average priced house.  However, for an Anchorage worker who buys a Mat-Su house it takes only 1.11 wage earners.    However, since Mat-Su Borough wages are lower, it takes 1.47 local Mat-Su wage earners to buy the average priced home.  Housing is cheaper in the Valley but so are wages.  Anchorage workers who live in the Valley either have more every day time to commute, don’t need to commute as often, i.e. slope workers, airline pilots or have more flexible daily hours to avoid the rush hour traffic.

Not factored into the average cost of housing is the cost of utilities in Anchorage which is actually 5.7% less than the average U.S.city due to our affordable natural gas. But, who knows how long we’re going to be able to make that claim due to the dwindling supply of natural gas in Cook Inlet.  Unfortunately, other Alaskan communities have 32 to 93% higher cost for utilities than the average U.S. city.  There’s no doubt that for some consumer items, Alaskans pay a premium. .Alaskans have some of the highest food costs in the nation, similar to New York City’s Brooklyn and Queens boroughs but still less expensive than our favorite place to vacation:  Honolulu, Hawaii.

But Anchorage and Alaskan residents should still count themselves lucky not to be living in Manhattan (the most expensive U.S. city to live) where a 2,400 square foot, four bedroom, two bath home on an 8,000 square foot lot sold for $1,123,144 on average versus $423,830 in Anchorage in 2010.  And a two bedroom unfurnished apartment in Anchorage rented for $1,107 compared to a Manhattan apartment average of  $2,776 per month and without the view of the Chugach Range!

So even though it costs a little bit more to live here compared to other U.S. communities, I count myself lucky every day to breathe clean air and eat wild salmon, knowing our state is one of the wealthiest in the nation.