As the last frontier, Alaska has been a land of prosperity, but the credit crunch has begun to take a bite out of Alaska's prosperous times, despite the state still showing employment growth. Housing markets all over the state have begun to see sales figures slip, but not to the extent of other states.
For more than two decades Alaska has seen growth. Employment and incomes have been shooting upward. In Anchorage, the state's largest city home values are still rising, but it won't last much longer for Anchorage or just about any where else in Alaska, according to the Housing Predictor forecast.
The Alaskan economy primarily revolves around two major sectors, oil and tourism, and with the economy going in the dumpster fewer and fewer people will be traveling, which leaves oil to bolster the state. A real estate bust in Alaska could be devastating. Alaska has been through busts before back in the 1980's and they may be in for some lean times again.
The inventory of homes has been growing in Anchorage for more than two years as it's become harder and harder to find a buyer. During the boom Anchorage experienced healthy appreciation, but not the double-digit sort else where, which may be the saving grace for Anchorage. Banks in Alaska are also some of the strongest in the nation with more than $11 billion in reserves, providing plenty of money to loan potential homeowners.
 |
| City |
Forecast |
| Anchorage |
− 6.1% |
| Fairbanks |
− 5.4% |
| Juneau |
− 7.2% |
| Sitka |
− 4.1% |
Native Alaskan corporations are another source of capital that strengthens the state's economy. Many of these companies are strongly capitalized even in the current recession, and they like to invest in local Alaska projects.
Despite an increase in new residents escaping from more urban settings and a growing job base, Anchorage will see more of a slowdown in housing sales in 2009 on the way to a forecast 6.1% in housing deflation for the year.
In Juneau it's been a buyers market for more than a year as home values fall. A surplus of inventory has sent prices south along with a growing number of foreclosures. Sales should remain soft through most of the year as Juneau is forecast to experience further deflation of 7.2% in average home values in 2009.
Like a lot of other markets throughout the nation that have military bases, Fairbanks housing market is holding in there mainly because of strong government loan guarantees and more moderate home prices. Fairbanks will see slower home sales in 2009 on projected deflation of 5.4% through the year's end.
On the remote island of Sitka the housing market never really had a major boom, but sales are softening and should remain that way through 2009 as values fall a moderate 4.1% in 2009 on the average home.
