Despite Lack of Inventory, Strong Sales in 2015

Spurred on by lack of inventory, warm weather and the threat of rising interest rates later in the year, local buyers are doing their spring home shopping early. Actual closed residential transactions for January 2015 were 166 compared to 149 in 2014. Last week in Anchorage, after Multiple Listing Service reported 45 pending residential sales and 27 sold, there were only 340 single family homes left for sale. This is an historic low inventory of available properties. Unlike Calgary, Alberta, which has had a 34 percent drop in home values due to the plummeting price of oil, the Anchorage housing market is actually holding steady and experiencing an increase in sales.

The average list price for an Anchorage home in the past six months was $370,335. Available inventory between $350,000 and $399,999 is only 43 homes which equates to a 1.31 month supply. Within this price range, there are 13 Anchorage homes with four bedrooms and a double car garage for sale which is the most sought after configuration. The market is not much better in Eagle River with only 77 homes for sale and six homes with four beds and a double car garage. More home choices are available in Wasilla with 278 homes for sale. Many buyers, frustrated with lack of choices, are forced into the commute from Wasilla to Anchorage, the employment center for Southcentral Alaska.

Unfortunately, Anchorage home buyers can’t look to new construction to find a solution to its housing shortage. Despite promises to improve the permitting and development process by elected officials, the number of Municipality of Anchorage building permits continues to flounder at 300 units or less. In 2014, only 293 single family home permits were issued, the lowest since 2011. In January 2015, there were 15 single family permits issued and six duplex permits. Anchorage needs at least 450 single family permits in 2015 to fulfill the housing needs of the community. The debate between buyer preferences and planners’ vision for the city’s housing needs continues. Buyers have a strong preference for detached single family homes even if the lot size is minimal as an alternative to the long commute from the Valley. City planners, however, prefer more multi-family and vertical construction to fulfill Anchorage’s housing needs, despite the fact that apartment style units don’t have garages long enough for the 70,496 pick-up trucks and storage for the 16,000+ registered snow machines in the MOA.

Yet, according to a recently published Gallup Poll, Alaska is still considered the happiest state in the US, despite its critical lack of housing.