Anchorage’s Housing Market in a Capsule?

On April 7, 2025 there were only 133 single family homes for sale in Anchorage. Twenty-three of the homes had an asking price over $1,000,000 and 52 were below the average sold first quarter value of $512,970. Approximately 4.5 homes sold per day which was only a modest decline of 4.72% compared to 2024. Statistically, the market is stable but that only means the high priced inventory/sales over $1 million plus extremely low inventory remains a problem for move up buyers.

Many of Alaska’s aging boomers would like to sell their million dollar homes. In Anchorage many of those homes were built in the 1980s and early 1990s and are in good condition on 8,000 square foot lots with double and triple car garages—just what the millennials would like to purchase for their growing families. Yet, there is no place for the Alaska boomer to go except to Arizona and the Mat-Su Valley. Anchorage is missing an excellent opportunity to create single family ranch homes on small lots that are desired by aging boomers.

Is Anchorage going to become only a home for the well-to-do and renters who can’t afford to buy a home but don’t want to make the drive to the Valley? According to housing economists, a balanced supply market should have up to six months of inventory and Anchorage has less than one month. We have a severe housing shortage in all but the over $1 million market and new construction alone can’t fix our supply. Our new construction is grappling with 35% inflation and an increase can be expected this spring due to tariffs, as almost all our lumber comes from British Columbia. Of the 6,000 pieces of material that goes into a new home, I can say with almost 100% certainty none of it is manufactured in Alaska. There were only 14 new construction homes in the Anchorage Spring preview last weekend and only one single family entry was below the Anchorage average sales price at $405,000. This Spinell home was on a 3,285 square foot lot with a single car garage, 3 bedrooms, two baths and nicely tucked into 1,193 square feet of living space.

Small lots, single car garages and smaller living square footage is one way to reduce prices. Garages at $100 per square feet are now a luxury whether it is a double, triple or barndominium. Gone are quartz countertops with sparkles, spa bathrooms and custom hoods above six burner stove tops. And just maybe a kitchen table with four chairs from Costco replaces a six cabinet island imported from the lower 48. But these are buyer and builder managed choices to help create affordability.

We need more changes when it comes to residential land development. Smaller lots are just the beginning. Time is money and approvals for development and buildings need to be faster. And that requires zoning changes, loosening platting requirements, perhaps even narrower streets. New construction can’t be built fast enough or at an affordable price point without some financial support and building incentives from local governments. The AHFC’s $10,000 buyer bonus for a new home excavated after January 2, 2025, is a good step forward. But let’s also consider a first time home buyer annual real estate tax reduction. If real estate tax reductions are available to land developers, commercial and multi-family developers why not first time homebuyers? A $400,000 single family home with 5% down can cost has approximately a $3,380 monthly payment. Property taxes are approximately $475 of that monthly payment. The first time home buyer needs a helping hand towards home ownership just as much as the creators of subdivisions and new homes.